Saturday, November 27 2021

The Customs, Excise and Taxes on Services Appeals Tribunal (CESTAT), Delhi Bench, ruled that the Customs Commissioner erred in revoking the customs broker’s license, forfeiting the security deposit and imposing a penalty.

An infraction report with a show cause notice was submitted by the Assistant Director, Tax Intelligence Branch to the Commissioner, citing that some importers were abusing the duty-free import authorization by importing popcorn and stating the same than maize-maize under code CP 10059000 and thus benefiting from the unjustified advantages of the DFIA.

Upon careful examination of the database, it was found that an importer by the name of M / s Encanterra Traders Pvt. Ltd. had imported the said goods by filing two entry invoices at the Chennai seaport in which the goods were declared as a variety of corn popcorn and therefore the DFIA benefit was granted in the amount of Rs. 42,56,540 / -.

It was further noticed that the traders of Encanterra also imported the goods to ICD, Tughlakabad and Nhava Sheva port and thus claimed benefits of Rs. 65,67,614 / – and Rs. 26 11 520 /- respectively. The goods in these two ports were also declared as “variety of corn popcorn” in the customs notification dated April 1, 2015.

During the scrutiny, it was also found that Encanterra traders had exported “popcorn gluten protein concentrate” under DFIA from ICD Tughlakabad through six shipping invoices and the export clearance work was facilitated by a customs broker called M / s Transpeed Logistics International Private Limited, who is the appellant in this appeal.

The Commissioner of Customs, by order dated October 30, 2018, suspended the appellant’s license with immediate effect under section 16 (1) of the Customs Brokers Licensing Regulations, 2018. The aforementioned suspension order was subsequently confirmed by the Commissioner of Customs. by order dated November 22, 2018. This order was challenged by the appellant by filing an appeal from customs to the Tribunal. The appeal was allowed and the stay order dated November 22, 2018 was quashed by order dated June 19, 2019.

The appellant, M / s Transpeed Logistics Pvt. Ltd. challenged the order of July 5, 2019 issued by the Commissioner of Customs (Airport and General) revoking the appellant’s customs broker license, also forfeiting the security deposit and imposing a penalty.

The coram headed by President Judge Dilip Gupta noted that the KYC documents were submitted by the appellant and that the verification was undertaken by Anil, an employee who had appointed the directors. Communications with Encanterra traders were also made by post. Self-certified Pan Card, Director’s Aadhar Card, and Company Pan Card had been submitted by letter dated September 10, 2018. Physical verification of the premises as stated above was not required to be carried out. . The Commissioner therefore erred in concluding that the appellant had failed to ensure compliance with the provisions of Regulation 10 (n) of the 2018 Regulation.

Consequently, CESTAT has ruled that it is not possible to maintain the order issued by the Commissioner.

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