A Customs Broker cannot be held liable for fraudulent exports based solely on the statement of an employee (G-card holder) when documentary evidence, specifically Shipping Bills, indicates that the exports were carried out by the exporters themselves on a self-basis.

Per : RAJEEV TANDON :

The appellant, a Customs Broker Firm, aggrieved with the Order-in-Original No.01/TECH/CBLR/2024 dated 15.07.2024 has filed the impugned appeal, assailing the same.

Vide the impugned order, the ld.Commissioner has revoked the Customs Broker License No.1/CHA/2015 (CBLMS No.2015PTNA10017) and Parent Policy Section EDI Lic. No.AADCD8123DCH001 of the appellant in violation of the conditions prescribed under Regulation 10 of the CBLR 2018. The ld.Commissioner has also imposed a penalty of Rs.50,000/- on the appellant vide the impugned order.

The Offence Report dated 25.10.2023 placed on record points out to an unprecedented surge in export of certain commodities like tiles, automobile parts from India to Nepal vide LCS Bhimnagar. The investigations conducted alleged revelation of fraudulent export thereof aimed at defrauding Government exchequer. It is the case of the Revenue that upon verification of the invoices and the e-way Bills, it was noticed that no such vehicles carrying the said goods actually moved towards LCS Bhimnagar or ever crossed into Nepal. The report further goes on to state that one Shri Ganga Singh, G-Card Holder is the pivotal person behind the said fraudulent exports and claims that he had digitally made the IRN invoices in question related to said fraudulent exports. It is on the basis of the statement dated 10.10.2023 of this Ganga Singh (G-Card Holder), that he conducted the business of Customs on behalf of M/s. Dutta Clearing Agent Pvt.Ltd. (the appellant Customs Broker). His statement also refers to and accepts the digital uploading of the invoices and the KYC documents of the exporters in e-Sanchit allegedly on the basis of fake/manufactured documents. It is noticed from the case records and the impugned Offence Report that the authorities have expressly stated “Shri Ganga Singh, G-Card Holder of M/s. Dutta Clearing Agent Pvt.Ltd., CHA violated the Customs Act to defraud the Government exchequer”.

It is on the strength of the aforesaid allegation and the statement of Shri Ganga Singh that the Revenue have come upon heavily on the appellant and charged him for violation of the provisions of the CBLR 2018 in terms of the Regulation 10(d), 10(e), 10(i), 10(n) and 10(q) of the same.

The appellants have essentially placed two-fold arguments before us –

(a) that the appellant was nowhere the Customs Broker handling the aforesaid export shipments and

(b) questioned the non-adherence to the timelines prescribed for conduct of enquiry as stipulated in terms of Section 17 of the said Regulations, prescribing timelines in terms of sub-section 5 and sub-section 7 thereof.

In arguments before us the appellant has completely disassociated himself with the impugned shipments and by way of records as placed before us copies of Shipping Bills as per list below clearly stating that the CHA concerned with the said shipments were the party themselves. List of such Shipping Bills enclosed to the records is as under :-

For records, a copy of first page of one of these Shipping Bills is scanned hereinbelow :

The aforesaid act of export/attempted export – as “himself”, being a factual contention cannot be merely dismissed based on a solitary statement of the alleged employee Shri Ganga Singh. The fact that the CHA is involved and concerned with the present shipments is required to be determined on the basis of credible documentary evidence, and there can be no better proof than the Shipping Bill itself. Given that the appellant Customs Broker was not involved with the exports, as shipment made “By himself” i.e. on self-basis, nor there being any documentary evidence to suggest otherwise, the finding that the firm breached Regulation 10(d), (e), (