The Chennai CESTAT held that the department has failed to establish that the appellants have connived or abetted in the overvaluation of goods and attempted export of the same. There is no iota of evidence to establish that appellants/customs brokers had falsified any documents.
On 10.06.2019 acting on specific intelligence that fake/ substandard “Air Inlet Automobile spare parts were being attempted to be exported by classifying the same under CTH 84212300 (as declared in shipping bill) and over invoicing the value as Rs. 3,46,95,519/- (declared value as FOB) by M/s Swiss Global, vikaspuri Delhi, (hereafter referred as Exporter), the officers attached to Air Cargo Complex (ACC) and Air Intelligence unit, Airport Trichy, visited the premises at Airport and noted that the said exporter had filed five shipping bills dated 09.06.2019 as free shipping bills claiming MEIS benefits through the Customs Broker (1st appellant herein). Examination was carried out in the presence of the representatives of the appellant and it revealed that the cargo proposed to be exported under the shipping bills were substandard materials.
It appeared that the exporter had intentionally inflated the actual value in order to claim ineligible MEIS benefits and undue benefit by way of IGST refund. The export cargo was detained and investigation was initiated.
The E-way Bill showed that, the same was generated on 10.06.2019, whereas, the cargo reached the point of export (Air cargo, Trichy) on 09.06.2019 itself. A copy of the invoice dated 24.05.2019 issued by supplier of the goods was also submitted by the Customs Broker, by which it came to light that though supplier and buyer were located in Delhi, the IGST was paid instead of CGST/SGST which was not proper.
The Exporter was called upon by letter dated 14.06.2019 to submit their explanation as to the inflated pricing along with necessary document. In turn the exporter vide letter dated 19.06.2019 totally denied the observations made by department and requested for permission to take back the cargo, as the buyer in Hong Kong was reluctant to receive the shipment due to delay. On perusal of the postal letter, it revealed that the letter was dispatched from Postal Circle Trichy, though the sender’s address was mentioned as Delhi.
The appellant contended that it firm is the authorized Customs Broker having the parent licence issued from Trivandrum Customs Commissionerate. As the work load at Cochin was more, the appellant shifted their administrative office to Cochin. They were also operating in Customs stations in Cochin, Mumbai Trichy, Tuticorin & Chennai. For smooth functioning of each branch, branch managers are appointed. The activities at Trichy were handled by Branch Manager, Shri Sabeer Ahamed Sayeed. He was responsible to ensure compliance of statutory requirements while undertaking import/export activities. He is an authorized ‘H’ card holder under Customs Brokers Licensing Regulations (CBLR, 2018) to attend to Customs related work.
The tribunal held that the ingredients of section 114A stands unestablished. Moreover, the invocation of sub-section (3) of section 147 against these appellant is totally erroneous.
M/s. Cochin Air Cargo Clearing House V/s Commissioner of Customs (Preventive), Tiruchirappalli [Customs Appeal No. 40220 of 2021]