The Delhi CESTAT has held that suspension of a customs broker’s license is quite a proportionate penalty for facilitating fraudulent exports.
There was an investigation report dated 28.07.2020 prepared by Nhava Sheva Preventive Unit (NSPU), Mumbai against an exporter M/s Fine Overseas to have fraudulently availed IGST drawback and refund by using bogus manufacturing registration, GST invoice, where no GST duty was being paid to the exchequer but inadmissible refund was being claimed, on the basis of the said bogus invoices which were being disbursed equally to the FOB value of the shipping bill.
Pursuant to a specific intelligence received by NSPU Mumbai about the specific exporter M/s Fine Overseas. When NSPU, Mumbai wrote a letter dated 18.1.2019 to CGST, Meerut requesting to conduct verifications and search at the office premises of the said exporter and also to serve the summons to the Director of the exporter asking him to appear before the NSPU, Mumbai.
The Meerut Commissionerate vide letter dated 04.02.2019 responded that the exporter, M/s Fine Overseas, was not found existing at the given address and on inquiry about the said addressee, nobody could tell about the present whereabouts. Resultantly, the summons could not be served. The report was sufficient evidence proving the non-existence of the exporter at the address declared in IEC.
The Mumbai licence was also revoked vide order no. 15/202021 CBS dated 07.09.2020 and pursuant to the said order the Delhi Commissionerate also vide Order No. 73/2020 dated 15.09.2020 had suspended the CB licence No. 33/2017.
Subsequently, vide Order-in-Original No. 83 dated 05.10.2020 the said suspension has been revoked and the same was reviewed vide the aforementioned review order.
Pursuant to the order, the appeal has been filed by the Department with the prayer for setting aside the said Order-in-Original dated 05.10.2020.
The respondent Customs Broker has also filed the Cross Objections in this appeal on 16 March, 2020 praying for the dismissal of the Department’s appeal.
The CESTAT held that merely the violation of Regulation 10(n) but a case of fraud committed by CB and fraud vitiates everything. The cardinal principal which is enshrined in section 17 of the Limitation Act is that fraud nullifies everything.
Commissioner, Customs (Airport & General)New Customs House-New V/S M/S Aradhya Export Import Consultants Pvt. Ltd.