Case Law Details
Pigeon International Vs Commissioner of Customs (CESTAT Bangalore)
The case of Pigeon International vs Commissioner of Customs revolves around the revocation of Pigeon International’s courier license by the Commissioner of Customs, Bangalore. Allegations of mis-declaration and procedural violations led to the initiation of proceedings against Pigeon International. However, the appellant contends that it did not engage in any illegal activities and presents evidence to support its claim.
Detailed Analysis: The appellant, Pigeon International, argues that it did not commit any illegality as alleged. Evidence presented includes letters from the importer, Ms. Kajal Thakur, confirming their knowledge of the imports and payment of duties and penalties. The appellant asserts that the proceedings against Ms. Thakur were dropped, and therefore, the present proceeding should be barred under Section 28(6)(i) of the Customs Act, 1962.
Furthermore, Pigeon International contests the allegations of fabrication of documents and non-compliance with KYC norms. It argues that there was no admissible evidence to support these claims and emphasizes the right to cross-examination in quasi-judicial proceedings.
On the other hand, the Commissioner of Customs argues that there were gross mis-declarations in the import process, including violations of KYC norms and unauthorized filing of courier bills of entry. The Commissioner asserts that Pigeon International contravened various regulations and failed to fulfill its obligations as an authorized courier.
Conclusion: After careful consideration of the arguments and evidence presented by both parties, the tribunal partially allows the appeal. It sets aside the revocation of Pigeon International’s courier license and reduces the penalty imposed under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010.
However, the penalty imposed under Section 117 of the Customs Act, 1962 is set aside, and the remaining penalty under Regulation 14 is reduced. The tribunal acknowledges the procedural lapses but deems them insufficient to warrant the severe penalties imposed initially.
FULL TEXT OF THE CESTAT BANGALORE ORDER
M/s. Pigeon International appellant is an authorized courier agent holding courier license issued by Cochin Customs Commissionerate, thereafter, the license was extended to Bangalore Air Port.
2. The brief facts are alleging that the appellant had abetted M/s. K T Technologies, New Delhi to import mobile parts through Bengaluru Airport by mis-declaring the value, proceedings were initiated and adjudication authority as per the impugned order revoked the Courier license, enforced the bond and bank guarantee. In addition, a penalty Rs.50,000/- each was imposed on the appellant under Regulation 14 of Courier Import and Export (Electronic Declaration and processing) Regulations, 2010 and under Section 117 of the Customs Act, 1962. Aggrieved by said order present appeal is filed.
3. When the appeal came up for hearing, Learned Counsel for the appellant submits that the Appellant has not committed any illegality as alleged. Learned Counsel also drew our attention to letter dated 02.12.2021 and 03.01.2023, where the importer Ms. Kajal Thakur, proprietress of M/s. K.T. Technologies submits that due to difficulty to understand the statement, a statement was recorded earlier to the effect that the shipment does not pertain to her. She further confirmed that they only had imported the goods and took assistance from the appellant and others. They have paid due amount to overseas supplier and admitting the alleged illegality, they have agreed to pay differential duty with penalty for the release of goods. Learned Counsel further submits that the respondent accepted the same and on payment of duty and penalty on 11.01.2022, proceedings against the importer Ms. Kajal Thakur, proprietress of M/s. K.T. Technologies and others are set aside. The Learned Counsel further submits that as per Section 28(6)(i) of the Customs Act, 1962, such proceedings deem to be conclusive on such person or other person. Thus, the present proceeding is barred as per the said provision. In support, Learned Counsel produced the copies of the relevant pages of Order-in-Original No.157/2023-2024 dated 10.01.2024, wherein the adjudication authority dropped the proceedings initiated under section 28(6)(i) of the Customs Act,1962 against the importer as well as the clearing agent.
4. Learned counsel for the Appellant further submits that though it is alleged that G-card holder had fabricated documents, there is no admissible evidence to that effect. As per the impugned order, it is alleged that the bill of entry was filed without complying with the KYC norms. However, as per the statement recorded from the importer Ms. Kajal Thakur, she has admitted that they had full knowledge regarding the import and they only made payment to the consignor. Moreover, accepting the said contention, Customs authority released the goods to the importer on payment of duty and penalty as per section 28(6)(i) of the Customs Act, 1962.
5. Learned Counsel further submits that though the adjudication authority relied on the statements recorded from the importer initially and Shri Elias, it is alleged that Shri Elias abetted her. However, in spite of requesting cross examination no opportunity was extended as per the regulation 13A(4) of the Courier Import and Export (Electronic Declaration and processing) Regulations, 2010. Learned Counsel drew our attention to the judgement of the Hon’ble Supreme Court the case of A K Roy Vs. Union of India reported in (1982) 1 SCC 271, wherein it is held that right to cross examination is a natural right even in quasi-judicial proceedings. The Learned Counsel further reiterated the grounds of appeal and submits that the proceedings against the appellant is illegal and unsustainable. Learned counsel also relied on the decisions of the Tribunal.
1) N. S. Mahesh Vs. Commisisoner Of Customs -2018(363) E.L.T. 644 (Tri.-Bang.)
2) Skypak Service Specialists, Ltd., Vs. CC, Mumbai -2002 (149) E.L.T. 1464 (Tri.-Mumbai)
3) Aramex India Pvt., Ltd., Vs. CC (Airport), Mumbai -2017(357) E.L.T. 420 (Tri.-Mumbai)
6. The Learned AR reiterated the finding and drew our attention to the findings in the impugned order and submits that there was a gross mis-declaration in the classification, description, quantity, duty etc. in the bills of entries filed for the said consignments, which were intercepted. The shipments were not only filed without proper KYC verifications and authorization of the importer, but were delivered to Mr. Elias, which is in total violation of the extant legal provisions and the KYC norms. Learned AR further submits that Shri Mujeeb K T, proprietor of M/s. Pigeon International admitted that he has not received any authorization for filing the subject Courier bills of entry from Ms. Kajal Thakur, proprietor of M/s K T Technologies and that the CBEs were filed on “trust” placed on Shri M. Elias, thus, M/s. Pigeon International has contravened the provisions of Regulation 12(i) of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. Learned AR further submits that the appellant M/s Pigeon International and co-accused, M/s Orbit Trans Express & Freight pvt. Ltd. had filed the CBEs and had facilitated the import of the shipments of M/s K T Technologies in contravention of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, which they are duty bound to comply. Moreover, appellant has not fulfilled the obligations under Regulation 12 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 and have also not fulfilled the commitments that they undertook in the bonds executed by them, when they were issued license to operate as an Authorized Courier. Further, they failed to adhere to the Regulations and the terms and conditions of the bond. Learned AR further submits that Shri. Mujeeb K T, proprietor of M/s. Pigeon international has also admitted that Shri M. Elias had filed the subject Bills. However, Shri. Mitaighar Elias is not a person entitled to file electronic declarations, for clearance of imported or export goods, as is required under Regulation 8 or Regulation 19 of the Customs brokers Licensing Regulations, 2013 and not duly authorized under Section 146 of Customs Act, 1962. Also, Shri. Mitaighar Elias was appointed by Shri Mujeeb K. T. as an executive for clearance and not in capacity of Customs Broker. Thus, M/s. Pigeon International has contravened the provisions of Regulation 12(ii) of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010.
7. Heard both sides and perused the records.
8. We find that the proceedings under Section 28(6)(i) of the Customs Act, 1962, were set aside. Section 28(6)(i) of Customs Act, 1962 reads “that the duty with interest and penalty has been paid in full, then, the proceedings in respect of such person or other persons to whom the notice is employed under subsection (1) or sub- section (4), shall, without prejudice to the provisions of sections 135, 135A and 140 be deemed to be conclusive as to the matters stated therein. Thus, from the section, itself it is clear that without prejudice to the provisions of sections 135, 135A and 140 of the Customs Act, 1962, proceedings are to be conclusive in respect of such person or other persons to whom the notice is served. There is no power vested on adjudication authority to accept the closure of the case under Section 28(6) and not to grant any “immunity” to other persons to whom notice is issued.
9. Further, from the Showcase notice available on record, it is not understood whether the Showcase is issued under the provisions of Custom Act, 1962 or under the provisions of Courier Imports and Exports (Electronic Declaration and processing) Regulations, 2010. In the present appeal, unlike the other proceedings, against very same SCN, in addition to the penalty imposed under Courier Imports and Exports (Electronic Declaration and processing) Regulations, 2010, there was a proposal to impose penalty on the appellant under Section 117 of the Customs Act, 1962. Both the proceedings are separate and reason for invoking penal provisions under the Courier Regulation and Section 117 of the Customs Act, 1962 together is not understood. Thus, once proceedings against the importer is dropped by invoking Section 28(6)(1) of the Customs Act, 1962, penalty of Rs. 50,000/- imposed on appellant under Section 117 of the Customs Act, 1962 is unsustainable, specially in such a case, where Adjudication authority concluded the proceedings against the importer under Section 28(6)(1) of the Customs Act 1962. With regard to imposition of penalty on Customs Broker, their omission/commission will not attract penalty as their acts are in capacity of facilitator of the customs transactions and they are bound to facilitate the authorized clearance work of importer/exporter. Therefore, the Customs Broker is only facilitating the customs transaction on behalf of principal, (importer/exporter). Therefore, the absence of mens-rea, penalty is not imposable, otherwise all the customs transaction will come to halt, if penalty is imposed on the Customs Broker for the omissions /commissions of exporter/importer.
10. Regarding alleged violation on merit, as per the evidence available on the record, proceedings initiated against the appellant is based on the initial statement recorded from the importer Ms. Kajal Thakur, proprietress of M/s. K.T. Technologies where in she has stated that; she was not aware about the import; there existed no GSTIN or IEC in her name, etc. Also, she denied any knowledge of the said two consignments pertaining to bills of entry CBEXIII BLR 2021-2022 1509 13415 and CBEXIII BLR 2021-2022 1509 13413 filed in the name of M/s K. T. Technologies, which were subsequently seized by CIU. However, as evident from the Paragraph 22 of the impugned order, same Ms. Kajal Thakur, proprietress M/s K T Technologies vide her letter dated 02.12.2021 claimed the ownership of the goods seized and requested release of the shipment. It may be noted that inspite of giving such a finding, adjudication authority accepted the request of Ms. Kajal Thakur made vide letter dated 02.12.2021 and 03.01.2022 and released the goods on payment of duty and penalty on 11.01.2022. Thus, the allegation regarding fraud on the Government using a dummy and bogus importer is unsustainable. Regarding violation of the Regulation 12(i) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, said allegation is made on the ground that proprietor of the appellant has not received any authorization for filing the courier bills of entire, it is admitted that same was obtained by appellant’s executive Shri M. Elias. In the absence of any provision which mandate receipt of KYC by customs broker authorized under section 146 of Customs Act,1962, violation of the Regulation 12(i) is unsustainable.
11. Regarding violation of the Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, as per para 47 of the impugned order the appellant appointed Shri M. Elias as an executive and not authorized him as customs broker under section 146 of Customs Act,1962. Thus, in the absence of any evidence regarding authorization of Shri M. Elias as customs broker under section 146 of Customs Act,1962 to carry out the activities of the courier agent, violation of the Regulation 12(ii) is sustainable as held by the adjudicating authority.
12. Regarding violation of the Regulation 12(iii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, as per para 48 of the impugned order it is alleged that the appellant had resorted to subletting the license as associated courier, however there is no admissible evidence to that effect. The proprietor of the firm only stated that during Covid period, they have appointed Shri M. Elias as an executive due to his inability to carry out activities in Bangalore, which cannot be considered as subletting and to allege violation of the Regulation 12(iii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 is not tenable.
13. Regarding violation of the Regulation 12(iv),(v) & (vi) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, the adjudicating authority held that the delivery address of the importer is in Delhi and he has not verified the identity of the client by using reliable, independent document. Considering the finding in ibid, paras, customs authority, who had initially made allegation that the appellant assisted Shri M. Elias to commit fraud on the Government using a dummy and bogus importer later accepted the letter of the importer and released the goods after adjudication to the very same importer cannot turn around and conclude that the import is made in the name of a bogus importer. Moreover, even as per the allegation of the revenue, there is no import of prohibited/restricted goods and there is no allegation that the appellant was aware about the alleged violation of undervaluation. As held in the matter of Skypak Service Specialists Ltd (supra), even if the executive of the appellant is involved in the alleged illegal import, in the absence of any knowledge regarding such illegality, appellant cannot be held responsible for his misdemeanour. Appellant never knew that his staff was involved in such affairs and nothing was brought to appellant’s notice at any stage. This only shows that there may be lack of proper supervision, which attract provisions of Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. The employees may be guilty of misdemeanour of smuggling personally and it cannot be stretched further to hold that the appellant also is liable for action for violation of the Act/Regulation in the circumstances of the case.
14. Considering the above facts and circumstances of the case, only conclusion can be drawn is that there was omission on the part of appellant to engage the executive Shri M. Elias as authorized person to file courier bills of entry as per Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. However considering the situation that prevailed during post-covid period, the appellant might have failed to comply with said provision and same cannot be reason to invoke harsh proceedings including revocation of courier license and enforcement of bond and bank guarantee executed in connection with registration/license as an authorized courier. We find that for such venial omission, appropriate penalty under the provisions of Regulation 12(ii) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, would suffice.
15. We find that as regards the penalty under Regulation Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, considering the revocation of the Courier license, since September 2023, a lenient view can be taken. Thus, the penalty imposed on the appellant under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 is reduced to Rs. 25,000/-.
16. In the result the impugned order is modified and appeal is partially allowed by setting aside revocation of Courier License and enforcement of Bond and Bank Guarantee executed in connection with the Registration/Issue of Courier License. In view of the discussion at Para 9 (supra), penalty imposed on the appellant under Section 117 of the Customs Act, 1962 is set aside. The penalty imposed on the appellant under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 is reduced to Rs. 25,000/-(Rupees Twenty Five Thousand only)
(Order Pronounced in Open court on 30.04.2024)
Author Bio
