By TIOL News Service

AHMEDABAD, NOV 19, 2014: THE Commissioner of Customs, Kandla revoked the Customs broker licence issued to the appellant and forfeited the security deposit of the appellant.

It is alleged in the enquiry conducted against the appellant that they had misdeclared the imported vessel by declaring it as Seismic Research Vessel and claimed benefit of exemption from whole of Customs duty under Notification No.21/2002-Cus (Sr.No.354). Inasmuch as after investigation it was found that the said vessel is correctly classifiable as Seismic Survey Vessel and liable to Customs duty as benefit of exemption notification 21/2002-Cus was not available. The duty which allegedly escaped payment is approximately Rs.9.25 Crores. Suffice to say that after enquiry the Customs broker was alleged to have colluded in the evasion of duty and the licence came to be revoked.

Very much aggrieved by this revocation, the appellant is before the CESTAT and submitted that the appellant has filed documents like invoice issued by the shippers, packing list, registration of vessel with Indian Registrar of Shipping, letter certifying the vessel in question as Seismic Research Vessel along with the Bill of Entry filed with the authorities. It is submitted that perusal of the said documents will indicate that everyone i.e. importer and the seller understood the vessel as a Seismic Research Vessel. That the findings recorded by the Commissioner of Customs are incorrect and revocation of the licence is totally disproportionate action as there was no negligence, carelessness or failure to follow obligations in this case. Reliance is placed inter alia on the Delhi HC decision in Ashiana Cargo Services - 2014-TIOL-1042-HC-DEL-CUS.

The AR justified the order of the Commissioner.

The Bench observed -

++ On factual matrix, we find that the appellant has filed the Bill of Entry with the authorities for clearance of imported vessel M.V. Geo Hind Sagar. On perusal of the documents which were filed by the appellant with the authorities along with the Bill of Entry, we find that invoice, packing list, every other document indicate M.V. Geo Hind Sagar as a self-propelling Seismographic Research Vessel. We find that the appellant is placing reliance on the Letter No.8834398/2010051935, dt.13.05.2010 of Indian Register of Shipping, Powai, Mumbai wherein IRASH has specifically informed the office of the Customs (Import) Mumbai that the survey of the vessel was undertaken by Indian Register of Shipping …of Mumbai on 12.05.2010 at your request and with the consent of owner vide Report No.BOM/10/S/077 which specifies characteristics of Seismographic Research Vessel. Based on the report, it is hereby concluded that the vessel is visited with all required characteristics thereof or otherwise of Seismographic Research Vessel.

++ It can be seen from the certificate of Registrar of Indian Ships, it categorically registers the ship M.V. Geo Hind Sagar as Seismographic Research ship. We are at a loss to understand when Government of India certifies and registers the vessel M.V. Geo Hind Sagar as research ship, how the other wing of Government of India, Department of Revenue understands the same vessel as a Seismographic survey vessel.

++ We find that the appellant, who is a CB, cannot be faulted with or cannot be charged with negligence or carelessness and failure to discharge the obligation cast upon him when he filed all the documents that indicate the imported vessel being Seismographic Research Vessel. Filing of such documents with the authorities has been admitted by the adjudicating authority.

++ When on such categorical acceptance of the fact that the appellant herein has discharged his duty as a Customs Broker by filing all the related documents, declaring the vessel as Seismographic Research Vessel, the change in classification after investigation, in our view, cannot be attributed to malafide or mensrea of the Customs Broker. Our above view is fortified by the… judgment of their Lordships in the case of Ashiana Cargo Services 2014-TIOL-1042-HC-DEL-CUS.

Holding that the order of the adjudicating authority revoking the CB licence of the appellant is absolutely unwarranted and the said order is unsustainable from any angle, the same was set aside and the Commissioner of Customs, Kandla was directed to restore the CB licence to the appellant forthwith.

The appeal was allowed.

In passing: Registrar, Register… Recognising the necessity for a leading maritime nation such as India to have it's own classification society, the Government of India constituted a Steering Committee (known as Mudaliar Committee) whose recommendation for formation of an Indian classification society was accepted by the Government of India in 1974. Thus, in March 1975, Indian Register of Shipping was established as a public limited company under section 25 of the Indian Companies Act, 1956.

(See 2014-TIOL-2301-CESTAT-AHM)