Skytrain Services C-... v. Commissioner Of Cust...

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Enforcement Rules, 2007 (IPR Rules hereinafter). Thus, the goods infringing IPR Rules were also found in the consignment. The Authorised Representative of these brands i.e. M/s. React India Pvt. Ltd., Lajpat Nagar, New Delhi was called upon to verify the noticed IPR infringement about the aforesaid products. M/s. React India Pvt. Ltd. after necessary inspection submitted their Technical Analysis Report vide letter No. 180004IN dated 13.01.2018 certifying that the products of Samsung brand found in the consignment under the impugned Bill of Entry were counterfeited and necessary actions in accordance of IPR Rules was accordingly prayed. Accordingly, the goods of the impugned Bill of Entry were seized. However, those were handed over for the safe custody to Shri Chaman Kumar Verma, the Authorised Representative/ G-Card Holder of the appellant, the CB/CHA, who was present at the time of checking of goods, after drawing representative samples of each item for further investigation.

2. The proprietor of M/s. Arun Enterprises, Shri Mohan Kumar Jha vide letter dated 22.12.2017 requested for warehousing of the aforesaid goods under Section 49 of Customs Act, 1962 on the ground of bearing heavy demurrage charges. The Space Availability Certificate No. 072 dated 22.12.2017 issued by M/s. All-ways Logistics India Pvt. Ltd., the public bonded warehouse, was annexed with the said letter. Permission accordingly was granted by the Assistant Commissioner of Customs (Preventive) vide their letter No. 24150-24153 dated 27.12.2017 to warehouse the seized goods in M/s. All-Ways Logistics Warehouse. The said warehouse was visited by officers of Customs Preventive on 16.04.2018 to physically verify the goods imported vide impugned Bill of Entry and

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it came to their notice that the goods imported by M/s. Arun Enterprises vide Bill of Entry No. 4470298 dated 19.12.2017 were never warehoused in the warehouse of M/s. All-ways Logistics India Pvt. Ltd. It was informed by the warehouse to the inspecting officers that despite issuance of the space certificate to the importer for warehousing the impugned goods none approached. Hence, they contacted the concerned person i.e., importer through e-mail. The copy of the said e-mail was also given to the visiting officers who submitted his report dated 16.04.2018. It was perused that the said e-mail was sent to Shri Aakash Sharma. The documents as were provided by the Assistant Commissioner, Import Shed vide letter dated 18.04.2018 including gate pass revealed that 99 packages having weight of 3178 Kgs. under the impugned Bill of Entry was issued on 28.12.2017 at 16:12:17. Signature of said Shri Aakash Sharma alongwith the vehicle number DL1LT2858 was found on gate pass at the place of consignee.

3. During further investigation, Department noticed, especially from the statement of Shri Niyaz Khan, the team leader of warehouse, M/s. All-ways Logistics India Pvt. Ltd. that though the aforesaid vehicle reached the warehouse on 04.01.2018 but since the vehicle was found to not to be sealed with the Customs seal, the goods were refused to be off loaded and warehoused. Shri Jatin Bakshi, the owner of vehicle No. DL1LT2858 by which the goods under impugned Bill of Entry were transported from Air Cargo Complex it revealed that the goods thereafter were taken to a godown at Mahipalpur behind Apra Automobiles owned by Mr. Ramu Chettry. All the 99 packets were unloaded there and kept at that godown. Those packets were opened one by one and goods inside

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the cartons were transferred in gunny bags and thereafter the said 99 packets were fllled with bricks and stones got packed in original packages. Those bags got again loaded in the same vehicle No. DL1LT2858 with the instruction to the driver for taking the same to M/s. All-ways Logistics India Pvt. Ltd. But after the subsequent refusal of Shri Niyaz Khan for taking those bags into the warehouse that all the bags were brought back to Mahipalpur godown of Shri Ramu Chhetry. The bricks and stones were removed and the bags/ packets got destroyed.

4. The office address of importer M/s. Arun Enterprises was verified alongwith the address of its proprietor Shri Manoj Kumar Jha. Both the addresses were found false. Statements of Shri Aakash Sharma, Shri Chaman Kumar Verma, Shri Rajesh Kumar- driver of vehicle No. DL1LT2858 in which were loaded the goods from the Customs area to be taken to M/s. All-ways Logistics India Pvt. Ltd. and of Shri Ramu Chhetry, the actual recipient of the imported goods having his godown at Mahipalpur, Delhi behind Apra Automobiles were recorded. Finally, the statement of Shri Rajnish Kumar, proprietor of M/s. Skytrain was also recorded. The Department concluded that Shri Raman Kumar Jha had taken IEC in the name of M/s. Arun Enterprises, the proprietor, Shri Manohar Kumar Jha whereof was his brother-in-law. He in connivance with Shri Chaman Kumar Verma, the Authorised Representative/ G-Card Holder of the appellant/ Custom Broker and Shri Aakash Sharma the associate of G-Card holder and Shri Rajnish Kumar, the proprietor of appellant/ Custom Broker had got cleared the goods of Shri Ramu Chhetry imported vide the impugned Bill of Entry but in the name of M/s. Arun Enterprises and on the pretext of the permission of

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warehousing the seized goods under Section 49 of the Customs Act and have committed the Act of mis-declaration as far as the quantity and the quality of goods are concerned and have also violated the IPR Rules. As such, the appellant has violated the provisions of CBLR, 2013/2018. Those seized goods could never reach the said warehouse rather were stolen from the carrier of goods in gross violation of Customs Act and by hatching a conspiracy with other persons.

5. Based thereupon the show cause notice No. 19/MK/2018 dated 23.07.2018 was served to the appellant. The enquiry report thereof was submitted on 16.10.2018 recommending revocation of licence, the forfeiture of part or whole of the security and the imposition of penalty upon the appellant. The said entire proposal and the recommendation of the enquiry report were confirmed vide the Order of Commissioner of Customs (Airport & General) vide Order No. 01/MK dated 10.01.2019. Being aggrieved, the present Appeal has been filed.

6. We have heard Ms. B.S. Goyal & Mr. Shaveer Ahmed learned Advocates for the appellant and Mr. Rakesh Kumar, learned Authorised Representative for the Department.

7. It is submitted on behalf of the appellant that Mr. Rajnish Sharma is the proprietor of the appellant who is holding Custom Broker License since the year 1987 and that the license is valid upto 21.12.2026. There has been no single instance of blame on the impugned CB/CHA. The present case of Customs is based upon Bill of Entry No. 4470298 dated 19.12.2017 containing 99 packages of mobile accessories which was filed by importer M/s. Arun

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Enterprises, the proprietor whereof is Shri Manohar Kumar Jha. On the basis of allegations for the goods to be under-valued and infringement of IPR Rules that the entire consignment was seized under Section 110 of Customs Act, 1962 vide the Panchnama dated 20.12.2017. However, the copy of such Panchnama was never given to the appellant nor the customs Broker was ever informed about the alleged violation and even the seizure of the goods. It is alleged that in the gross violation of established norms and procedures, the Customs Authorities on the Application filed by the importer under Section 49 of Customs Act on 22.12.2017 granted permission for the seized goods to be warehoused at M/s. All-ways Logistics India Pvt. Ltd. and the authorities had handed over the goods under seizure to one Shri Aakash Sharma. It is impressed upon that he said Shri Aakash Sharma is neither the employee of the CHA nor is its agent. CHA was otherwise not to take care of seized goods. Apparently, no such authority was given to the appellant by the Customs Authority. It is suddenly after four months on 16.04.2018 that Shri Niyaz Khan from warehouse authority informed Customs (Preventive) about not receiving the goods from the importer despite issuance of Space Availability Certificate. But no enquiry was got conducted from said Shri Niyaz Khan about not informing the authorities concerned on 04.01.2018 itself. With respect to deviation and disappearance of goods after the seizure of the same by the Customs Authorities, the CHA had no role to play. Nothing has been attributed to the CHA/ appellant even in the enquiry report.

8. The valuation of the goods as far as the false declaration thereof is concerned, the appellant is impressed to have no

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knowledge especially in the absence of any material on record to that effect. Learned Counsel has emphasised sub-para 8 under 'Discussion and Finding' at page 53 of the Final Order where the inquiry officer has observed that there is no evidence to establish the role of Shri Rajnish Sharma, proprietor of CB/CHA in the above said violations. The involvement of Shri Aakash Sharma alongwith Shri Raman Kumar Jha, brother-in-law of the importer has clearly been observed by the inquiry officer. With respect to the confessional statement of his G-Card holder, Shri Chaman Kumar Verma as was recorded post his arrest on 24.05.2018, it is submitted that the statements were coerced, hence cannot be relied upon. It is further submitted that Customs Authorities have failed not only to inform the appellant/CHA about the mis-declaration of the goods or the seizure thereof or even about handing over of the seized goods to Shri Aakash Sharma and the manner in which the goods were released despite being seized under Section 110 of the Customs Act.

9. It is further been argued that there is no room for doubt that the Customs Authorities themselves connived and were hand-in- gloves with Shri Aakash Sharma and Shri Raman Kumar Jha. No doubt CHA had a responsibility of failing to monitor the whole transaction but once the goods were seized under Section 110 same became the property of the Customs which could not be handed over to any one not even to the CHA. Hence, the events post seizure cannot be attributed to CHA's failure to observe any of the obligations of CBLR Regulations. The appellant has relied upon

Flacon Air Cargo & Travels Pvt. Ltd. Vs. C.C., New Delhi

reported in 2002 (141) E.L.T. 284 and Kunal Travels Vs. C.C.

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(I&G) reported in 2017 (354) E.L.T. 447. Admittedly, appellant/CHA did not apply for release of goods. With these submissions the inferences drawn in inquiry report as well as the Order under challenge are prayed to be set aside. Appeal is accordingly prayed to be allowed.

10. While rebutting these arguments it is submitted that apparently and admittedly at the time of examination of the goods imported vide the impugned Bill of Entry and the subsequent seizure, the G-Card holder of the appellant/CHA was present in person. In his statement dated 20.12.2017 he has acknowledged Shri Aakash Sharma to be his associate/employee. Said Shri Aakash Sharma in his statement dated 19.04.2018 and 24.04.2018 has acknowledged that he has been working in association with appellant/CB. The Department has impressed upon a letter of the appellant written to the Superintendent of Customs (Preventive), New Customs House, IGI Airport, New Delhi as was received by the Department on 18.04.2013 wherein the appellant has acknowledged that the consignment of M/s. Arun Enterprises against the Bill of Entry No. 4470298 dated 19.12.2017 was allowed to be sent to public bonded warehouse namely M/s. All-ways Logistics India Pvt. Ltd. Mr. Aakash Sharma is acknowledged to be the person authorised by the appellant and is mentioned to have been handed over with the shipment to be taken to the warehouse with Mr. Niyaz Khan as the concerned in-charge there. However, on checking the cargo in the warehouse, the shipment was not found. The intervention was requested by the appellant from the Customs Authorities. It is impressed upon that the said letter is sufficient to highlight the involvement of the CHA in the entire transaction and is

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also sufficient to prove that CHA had all the knowledge of alleged mis-declaration and the infringement of IPR Rules. He knowingly was the party for diversion of the seized goods to the godown of Shri Ramu Chhetry, the actual beneficiary instead the same being deposited to the public bonded warehouse as per the permission under Section 49 of the Customs Act. Finally, relying upon the decision of Supreme Court in the case of Commissioner of Customs Vs. KM Ganatra and Co. reported in 2016-TIOL-13- S.C.-Cus the Authorised Representative has impressed upon no infirmity in the Order under challenge wherein the violation of the obligations on the part of CHA have duly been observed against the appellant. Order accordingly is prayed to be upheld Appeal is prayed to be dismissed.

11. After hearing both the parties and perusing the entire record we observe and opine as follows:

11.1 The admitted facts in the present case are:-

(i) Mobile accessories got imported by M/s. Arun Enterprises, the Proprietor thereof is Shri Manohar Kumar Jha, vide Bill of Entry No. 4470298 dated 19.12.2017.

(ii) The said Bill of entry and the consignment thereof was intercepted on the basis of information for the goods being mis-declared, under-valued and are infringing Intellectual Property Rights.

(iii) The goods were seized vide panchnama dated

20.12.2017.

(iv) At the time of examination of goods and the impugned panchnama, and the delivery thereof the G-Card holder of the

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appellant namely Shri Chaman Kumar Verma was present in person.

(v) On the request of the importer, the seized goods were allowed to be warehoused in public bonded warehouse, i.e. M/s. All-ways Logistics India Pvt. Ltd. on 22.12.2017.

(vi) The goods never got warehoused and this fact was not taken care of till the expiry of four months i.e. 16.04.2018, nor was ever got verified nor even was informed to the Customs by the appellant or his G-Card holder.

(vii) The appellant was granted license to act as Custom Broker in the year 1987 which is valid till 21.12.2026.

12. The question for adjudication is as to:

12.1 Whether the Custom Broker can be held responsible for the alleged mis-delcaration and under valuation of goods, for infringement of Intellectual Property Rights due to the mobile accessories of Samsun brand to also be present in the consignment and also for the alleged diversion of the goods.

12.2 For the purpose, foremost, we need to first appreciate the obligations as have been imposed upon the Customs Brokers by the Customs Broker License Regulation 2013/2018. We observe that the same are mentioned under Regulation 14 thereof which reads as follows:

""14. Obligations of Customs House Agent. - A Customs House Agent shall :

(a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as Customs House Agent and produce such authorisation whenever required by an Assistant Commissioner of Customs or Deputy Commissioner of Customs;

(b) transact business in the Customs Station either personally or through an employee duly approved by the Assistant Commissioner

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of Customs or Deputy Commissioner of Customs, designated by the Commissioner;

(c) not represent a client before an officer of Customs in any matter to which he, as officer of the Department of Customs gave personal consideration, or as to the facts of which he gained knowledge, while in Government service;

(d) advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Assistant Commissioner of Customs or Deputy Commissioner of Customs;

(e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;

(f) not withhold information relating to clearance of cargo or baggage issued by the Commissioner of Customs from a client who is entitled to such information;

(g) promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debt or obligations owing to the Government and promptly account to his client for funds received for him from the Government or received from him in excess of Governmental or other charges payable in respect of the clearance of cargo or baggage on behalf of the client;

(h) not procure or attempt to procure directly or indirectly, information from the Government records or other Government sources of any kind to which access is not granted by proper officer;

(i) not attempt to influence the conduct of any official of the Customs Station in any matter pending before such official or his subordinates by the use of threat, false accusation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing of value;

(j) not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Customs House Agent which is sought or may be sought by the Commissioner;

(k) maintain records and accounts in such form and manner as may be directed from time to time by an Assistant Commissioner of Customs or Deputy Commissioner of Customs and submit them for inspection to the said Assistant Commissioner of Customs or Deputy Commissioner of Customs or an officer authorised by him whenever required;

(l) ensure that all documents prepared or presented by him or on his behalf are strictly in accordance with orders relating thereto;

(m) ensure that all documents, such as bills of entry and shipping bills delivered in the Customs Station by him show the name of the importer or exporter, as the case may be, and the name of the Custom House Agent, prominently at the top of such documents;

(n) in the event of the licence granted to him being lost, immediately report the fact to the Commissioner;

(o) ensure that he discharges his duties as Customs House Agent with utmost speed and efficiency and without avoidable delay; and

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(p) not charge for his services as Customs House Agent in excess of the rates approved by the Commissioner from time to time under Regulation 25."

Regulation 19 provides for maintenance and inspection of accounts. We have referred to the said Regulation as it casts number of obligations on the Customs House Agent."

12.3 The perusal makes it clear that the CHA is created as a link between Customs Authorities and the importers with an object of facilitating the clearances at Customs as the Custom procedures are complicated. The CHA is thus supposed to safeguard the interests of both the Customs as well as the importers. Hon'ble Supreme Court in KM Ganatra and Co. (supra) case while relying upon the decision of Mumbai Tribunal in the case of Noble Agency Vs. Commissioner of Customs, Mumbai reported in

2002 (142) E.L.T. 84 has held as follows:

"The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations...."

12.4 It becomes clear from the above provisions and the decision of the Hon'ble Apex Court that CHA is not supposed to be a formal agent either of Custom House or of the importer. But the utmost due diligence in ascertaining the correctness of the information related to clearance of cargo is the CHA's duty. He not only is supposed to advise the importer/exporter about the relevant provisions of law and the mandate of true compliance thereof but is also responsible to inform the Department if any violation of the provisions of the Customs Act appears to or have been committed

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by his client at the time of the clearances. We have no difference of opinion from the case law as cited by the appellant that the revocation of license is a grave punishment and should not be imposed against the principle of proportionality. There is no dispute about the settled law that CHA is not an inspector to weigh the genuineness of the transaction. It is merely a processing agent of documents with respect to clearance of goods through the Custom House either himself or through his authorized personnel. Penalty as that of revocation of license cannot be imposed upon the CHA in absence of any active or passive facilitation by the appellant.

13. To appreciate the extent of due diligence on part of the CB/appellant or of any active or passive involvement of the appellant herein, so as to adjudicate the question as framed above, we hereby revert to the record of this case. Admittedly, the authorized representative of appellant i.e. his G-Card holder namely Shri Chaman Kumar Verma was present in the Customs House area at the time the goods were seized and the panchnama dated 20.12.2017 was prepared. The goods were handed over for safe custody to the CELEBI/ the authorized representative. The G-Card holder of the appellant, Shri Chaman Kumar Verma, in his statement, as was recorded on 20.12.2017 and even subsequently on 20.04.2018, acknowledged him to be working with the appellant since 2010 and looking after the filing of Bill of Entry for clearance of goods landed in ACC (Import), New Delhi. Shri Rajnish Kumar, proprietor of the appellant is stated to have the knowledge of Bill of Entry No. 4470298 dated 19.12.2017 and that the said Bill of Entry was filed after getting proper authorization from importer M/s. Arun Enterprises, Shri Manohar Kumar Jha, the proprietor thereof. The

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KYC of this importer was examined, not only that even the goods under said Bill of Entry are acknowledged to be examined in presence of said G-Card holder. He also acknowledged to have visited the office of importer several times. However, this acknowledgment about visiting the office stands contradicted from a report by the Department about M/s. Arun Enterprises to be dummy Company, found non-existent at the given address and the proprietor thereof Shri Manohar Kumar Jha as well as his residential address being also fake. This report, with no evidence to the contrary, is sufficient for us to form an opinion that the Custom Broker/ the appellant and his G-Card holder had sufficient knowledge about the importer being fake. It stands established that the Custom Broker at least had failed in observing due diligence about verifying the antecedents as far as KYC of the importer. Same definitely amounts to violation of Regulation 11(e)/ 14(e) of CBLR 2013/2018.

14. No doubt, the request for warehousing the seized goods under Section 49 of Customs Act, 1962 was made by the importer but after the grant of the permission, since the goods were given in the safe custody of CELEBI/Shri Aakash Sharma in presence of G-Card Holder of the appellant the subsequent movement thereof is not possible without the knowledge and the consent of the said G-Card holder who was the authorized representative of the appellant and the appellant is bound by his acts and conducts. The said permission of warehousing was granted on the basis of Space Availability Certificate given by the public bonded warehouse namely M/s. All-ways Logistics India Pvt. Ltd. It is on record that the said

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certificate was submitted by G-Card holder of the appellant. It is also on record that on the physical examination of the said warehouse on 16.04.2018 specifically about the goods imported vide the impugned Bill of Entry filed by M/s. Arun Enterprises it was found that the goods had never reached the warehousing despite that the OTL seal No. 035263 was issued to the vehicle in which the said goods were loaded for warehousing. The in-charge of said warehouse is observed to have denied to off load the goods at warehouse due to said seal being doubtful.

15. The other document as was submitted by the Assistant Commissioner, Import Shed vide letter No. VIII(12)ACC dated 18.04.2018 was the gate pass as was issued on 28.12.2017 at

16.12 for release of 99 packages weighing 3178 Kgs of goods as were mentioned in the impugned Bill of Entry. The gate pass bears the signature of one Shri Aakash Sharma endorsed at the place of consignee. The said Shri Aakash Sharma is acknowledged to be the associate of Shri Chaman Kumar Verma. Though the appellant has taken the stand that he has no knowledge about any person known as Shri Aakash Sharma and any act done by Shri Aakash Sharma and that the liability cannot be fastened upon the appellant, but the appeal record is found to have a letter written by the appellant/ CHA to the Superintendent of Customs (Preventive) as was received by them on 18.04.2018 informing about the shipment of M/s. Arun Enterprises under the impugned Bill of Entry to the warehouse. It has specifically been mentioned in the said letter that the person of the CHA/appellant namely Shri Aakash Sharm handed over the shipment to the warehouse which was received by Shri Niyaz Khan. This acknowledgment about Shri Aakash Sharma is sufficient to

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falsify the contention of the appellant about having no knowledge of the issue involved but to corroborate the statement of Shri Niyaz Khan. The warehouse had contacted the concerned person though email. It was revealed from the record that those e-mails were sent to Shri Aakash Sharma at e-mail address:

akashsharma21101991&gmail.com.

16. Further, this letter clarifies that since the date of seizure the facts were in the notice of the authorized representative of the appellant as well as the appellant himself but no efforts were taken by the appellant to either advise the importer about the safe and proper delivery of the goods permitted to be warehoused in the warehouse of M/s. All-ways Logistics India Pvt. Ltd. in time nor the violation thereof was brought to the notice of the Customs Department. The concealment of the fact that Shri Aakash Sharma was an associate of the appellant who was involved in the entire incident from the non deposition of seized consignment in the warehouse to diversion/ stealing of the seized good clearly amounts to breach of the duty burdened upon the CHA under 11(d) and 11(f) of CBLR, 2013. There is an apparent delay since December 2017 till April 2018 when appellant for the first time informed the Department vide the aforesaid letter. There is no explanation on the part of the appellant for remaining silent for a period of almost four months which amounts to the failure on his part to discharge his duty as custom agent without any avoidable delay.

17. Now coming to the statement of Shri Aakash Sharma who is acknowledged to be the associate of Shri Chaman Kumar Verma and

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the person of the Custom Broker, as per Custom Broker himself. We observe the following admissions:

(i) He assisted Shri Chaman Kumar Verma in all proceedings including obtaining the permission from Assistant Commissioner, Import Shed for warehousing.

(ii) On 28.12.2017 he got the gate pass for delivery of said goods and got issued customs seal by seal issuing authority after making entry of seal No. in the register (this gate pass issuance and the delivery stands corroborated from the documents as was given by Commissioner, Import Shed vide letter No. VIII(12) dated

18.04.2018).

(iii) After he was allowed to take the delivery of goods he got loaded 99 packages of the consignment in a truck No. DL1LT2858 and got the truck sealed with the customs seal as was issued to him (This stands corroborated from the statement of Shri Jatin Bakshi, the owner of this truck and its driver, Shri Rajnish Kumar)

(iv) The consignment reached M/s. All-ways Logistics India Pvt. Ltd. at 12am on 28.12.2017 however, the team leader of warehouse Shri Niyaz Khan was contacted at 11:30 am on 29.12.2017 the next day and got the consignment unloaded and deposited to the warehouse but the records of the warehouse had no receipt of any such consignment on 29.12.2017.

18. However, we observe from record that:

(i) Shri Aakash Sharma admitted to have no such document/evidence as may prove that the consignment of impugned Bill of Entry was received by M/s. All-ways Logistics India Pvt. Warehouse. It is apparent from record that even Shri Chaman Kumar Verma could not produce any evidence for getting the goods

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warehoused despite he assured for producing the same. The factum of goods to have never reached to M/s. All-ways also gets corroborated from the statement of Shri Jatin Bakshi who was the owner of the truck No. DL1LT2858 by which the goods under impugned Bill of Entry were transported from Air Cargo Complex. He had acknowledged that his services were hired by Shri Aakash Sharma from ACC (Import) to M/s. All-ways Logistics warehouse at Dhoolsiras. However, the goods were not taken to the warehouse but were diverted to the parking space of transporter itself at Mahipalpur, behind Raddison Hotel. The truck remained parked with the loaded goods from 28.12.2017 to 30.12.2017 on which date the goods were diverted to godown behind Apra Automobiles at Mahipalpur and got unloaded there. The driver of the truck, Shri Rajnish Kumar corroborated the statement of Shri Jatin Bakshi. The statement of Shri Niyaz Khan, team leader of M/s. All-ways Logistic Pvt. Ltd. warehouse further corroborates non-receipt of the impugned goods at the said warehouse. He stated that goods reached the warehouse only on 04.01.2018 at 4:30 pm however, on the basis of doubt qua the seal that he refused to off-load the goods. The goods were again brought to the warehouse on 05.01.2018 at 12:30 pm. On inspection, Shri Niyaz Khan found bricks and stones packed in the cartons. Since he had seen the receipt in respect of the warehousing of the goods as was submitted by the G-Card holder of Custom Broker/appellant, he could identify the another receipt to be forged. Resultantly, he refused to warehouse the fake/bogus consignment.

(ii) Shri Aakash Sharma who was assisting the said G-Card holder of the appellant has acknowledged for the entire transaction, since

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the seizure of goods till those goods were diverted to a godown at Mahipalpur behind Apra Automobiles owned by Shri Ramu Chhetry who actually was the buyer of the impugned goods as were purchased from Shri Raman Jha a friend of Shri Chaman Kumar Verma.

(iii) Shri Raman Kumar Jha only had taken the IEC No. 0516959310 in the name of M/s. Arun Enterprises and inducted Shri Manohar Kumar Jha his brother-in-law as the fake proprietor of M/s. Arun Enterprises. He only used the services of M/s. Skytrain Services and provided all KYC to the CB/appellant. It is on his instruction only that the goods were diverted to the godown of Shri Ramu Chhetry.

19. Involvement of Shri Ramu Chhetry and Shri Raman Kumar Jha stands corroborated from the documents proving the transfer of Rs.10 Lakhs from the bank account of Shri Ramu Chhetry at Yes Bank to the bank account of Shri Raman Kumar Jha in Axis Bank on 22.05.2018. The said is an amount equivalent to the amount of duties and penalties in respect of current case. Shri Raman Kumar Jha acknowledged Shri Chaman Kumar Verma to be his friend assisting him in getting clearances of the goods. He corroborated that Shri Ramu Chhetry approached him for clearances of goods i.e. mobile accessories purchased by him in China. It is also stated that the entire fact of obtaining the fake IEC in the name of M/s. Arun Enterprises with his brother-in-law as the proprietor thereof, the goods in the consignment to be mis-declared and under-valued and to also have infringed the Intellectual Property Rights were in the notice of Shri Chaman Kumar Verma as well. Mr. Raman Jha also corroborated the factum of goods being diverted from the ACC

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(Import) to the godown of Shri Ramu Chhetry instead of M/s. All- ways Logistics India Pvt. Ltd. where the mobile accessories were removed from the 99 packages as were sent from the Customs to be warehoused and those packages being re-filled with stones and bricks to be transported to M/s. All-ways Logistics India Pvt. Ltd. and were subsequently being refused to be warehoused by the person in-charge thereof, i.e., Shri Niyaz Khan.

20. From the entire above discussion it stands clear that there is sufficient oral evidence in the form of statements of all concerned, that too in corroboration, about the consignment received vide the impugned Bill of Entry to contain mis-declared and under-valued mobile accessories and to also have the mobile accessories of Samsung brand infringing the Intellectual Property Rights which despite seizure and the permission of being warehoused under Section 49 of Customs Act, 1962 were diverted to the premises of the actual purchaser of the consignment, Mr. Ramu Chettry with the connivance of the G-card holder of the appellant and his associate. The said oral evidence is receiving due corroboration from the documents as well, as were submitted by the Assistant Commissioner, Import Shed. The physical verification of M/s. All- ways Logistics India Pvt. Ltd. reveals that the consignment was not found warehoused in the premises on 16.04.2018. Nexus between Shri Chaman Kumar Verma, Shri Aakash Sharma, Shri Ramu Chhetry and Shri Raman Kumar Jha stands well established upon the record.

21. Admittedly, Shri Chaman Kumar Verma is the G-Card holder of the appellant who was physically and actually involved in the

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entire series of acts. Apparently and admittedly his activities had never been objected by the appellant nor ever had been questioned nor even been informed to the competent authorities. The appellant is otherwise bound by the act of his G-Card holder. Otherwise also, without the knowledge of the Custom Broker, the goods could not have been diverted. He is equally bound by the act of his authorised representative/agent. Keeping in view the same and the observation of Hon'ble Supreme Court in KM Ganatra & Co.

(supra) case about the important duties of the CHA and the amount of due diligence as is required to be observed on their part, we are of the firm opinion that CHA has violated the obligations imposed upon him under CBLR, 2013/2018. The above observations are sufficient to hold that the violation of relevant Regulations is so grave that principle of proportionality is not opined to have been compromised as is impressed upon by the appellant. The failure thereof invites the penalty as that of revocation of license.

22. The facts and circumstances of the case as discussed above are sufficient to reflect the gravity of illegality committed which was not possible had the Custom Broker verified antecedent correctness of IEC Code no., identity of the importer herein and its functioning at the declared address by way of using reliable, independent, authentic documents, data or information. Thus, there is apparent violation of Regulation 11(n) of CBLR, 2013 as well as Regulation 79 of CBLR, 2013 holds the Custom Broker responsible for all acts or omissions of his employee during their employment as he is under the burdened duty to exercise such supervision as may be necessary to ensure the proper conduct of his employees in the transaction of the business. In view thereof, we are of the opinion

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that the Adjudicating Authority below has committed no error while holding that the Custom Broker Firm/the appellant has failed in compliance to their responsibilities cast upon them as per the Regulations 10(d) (e) (n) and 13 and 12 of CBLR, 2018 and thereby revoking its license forfeiting the security deposit.

23. While arriving at the given conclusion we are further of the opinion that for the illegality committed in the present case though the mensrea was with the G-Card holder of the appellant binding the appellant as well, his friend Shri Aakash Sharma, the actual purchaser of the impugned consignment, Shri Ramu Chhetry but the way goods have been diverted from ACC (Import) Customs Area to the godown of said Shri Ramu Chhetry, the same was not possible without connivance or at least grave negligence of the seizing officer in dealing with the seized goods. We find that whenever the goods are seized for violation of any of the provisions of the Customs Act, ownership of such seized goods temporarily rests with the government and therefore it is sacred duty of the seizing officer to ensure safety and proper storage of seized goods. The Board has issued guidelines for handling and storage of valuable goods that are seized/confiscated by the Department from its F. No. 394/97/2015-CUS(AS) dated 01.12.2015 and on many occasions we find that the officers concerned have behaved in handling such matters in violation of above mentioned institutions. Since the act committed is in sheer violation of Customs Act, 1962 and CBEC guidelines and instructions and is otherwise an act of grave illegality, we hereby order that an inquiry to be conducted by the Department so as to investigate, as to how the seized goods went out of the custody of the department and then to fix the

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responsibility of the officer/official who were on duty at the time of interception, seizure and clearances of the goods. The officer involved in granting the permission under Section 49 of the Customs Act be also enquired to check the element of connivance, if any, apparent on his part to facilitate the above observed illegal act.

24. The copy of this order to be sent to Chief Commissioner(Customs), concerned, for the purpose with the directions that the enquiry report be placed before us on or before the last day of the third month from the date of this Order.

25. With these findings and directions, as above, we uphold the order under challenge. The Appeal accordingly stands dismissed. [Order pronounced in the open Court on 20.09.2019]

(C. L. MAHAR)

MEMBER (TECHNICAL)

(RACHNA GUPTA)

MEMBER (JUDICIAL)

DJ