Suresh N.

Nivatkar

BEFORE THE COMMISSIONER OF CUSTOMS (IMPORT), AIR CARGO COMPLEX, SAHAR, MUMBAI,

In the matter of:

Sub:- SCN No. SD/INT/APU/MISC-24/2015//SD/INTAPU/04/2015-16 ACC dated 17/02/2017 issued by

Commissioner Customs (Prey), Mumbai to M/s. Flower Impex- reg.

Ref:- F. No. S/3-Misc-40/16-17 Adj (I) ACC

Issued to:
Shri Surendra Singh Kishan Singh Shekhawat,
Proprietor of Sapan Traders
Ahmadabad-382325

(Noticee No. 3)

Sir,
Sub: Submission in the above Show Cause Notice

MOST RESPECTFULLY SHEWETH

1. I am the Authorized Representative of Shri Surendra Singh Kishan Singh Shekhawat, proprietor of Sapan
Traders, Ahmadabad-382325, Noticee No.3. Under instructions from my client, I have to address your Honour
as follows:

2. Shri Surendra Singh Kishan Singh Shekhawat, proprietor of Sapan Traders, Ahmadabad — 382325,
Noticee No.3 is in receipt of the subject Show Cause Notice (SCN) dated 17/02/2017. By the said SCN, the
Noticee has been asked to show cause as to why penalty should not be imposed upon him under Section 117
of the Customs Act, 1962.

3. The show cause notice is based on the premises that in his Statement dated 21/09/2016 the Noticee
has admitted to have deposited money in the bank account No. 60166484597 of M/s Flower Impex, and that
his firm is engaged in activity of cheque discounting and money lending. Thus, he has aided and abetted Shri
Mayur Mehta and Shri Pankaj Tiwari in the illegal importation of goods cleared under 243 B/E and thereby
evading SAD © 4% amounting to Rs. 58,30,402/- (Rs. Fifty eight lakh thirty thousand four hundred two only).

4. It is humbly submitted that the activity of cheque discounting carried out by the Noticee is legally
permitted by the Reserve Bank of India under banking regulations including Non Banking Financial Institutes.
Though the Noticee firm was not holding any Registration Certificate from the RBI; it could amount to violation
of banking regulation. However, there is absolutely nothing illegal in it from provisions of Customs Act, 1962.

5. In the impugned SCN dated 17/02/2017 there is nothing to substantiate allegation that the Noticee has
aided and abetted Shri Mayur Mehta and Shri Pankaj Tiwari in the illegal importation of goods cleared under
243 B/E.
6. It is humbly submitted that allegation of aiding and abetting are serious in nature and they cannot be
saddled in casual manner. There has to be knowledge and consent of the Noticee to invite penal action. Aiding
and abetting can be alleged when there is committed breach of covenant or when the Noticee has acted in
breach of some fiduciary duty or has in any way violated principles of equity and conscience.

7. It is humbly submitted that the expression "sufficiency of evidence" postulates existence of some
evidence which links the Noticee with the violation alleged against him. Evidence, however, voluminous it may
be, which is neither relevant in a broad sense nor establishes any nexus between the alleged violation and the
Noticee, is no evidence in law. These are the observations of Hon. Supreme Court in their pronouncement
dated 16/08/2002 in Appeal (civil) 5055 of 2002 filed by Sher Bahadur vs Uol. Thus, whatever, evidence is there
on record against the main Noticee, the importer; so long as there is no nexus between such evidence and the
Noticee is established, proposed penal action is without any foundation.

8. It is further submitted that the Noticee has not acted in deliberate defiance of law. In Hindustan Steel Vs
State of Orissa — (1978) 2 ELT J159 (SC) the Supreme Court held that penalty can only be levied in cases where
the Noticee has acted 'deliberately in defiance of law' or is 'guilty of conduct contumacious or dishonest' or
'acted in conscious disregard of its obligation'. Penalty need not be imposed when there is a technical breach
of the provisions or where breach flows from a bona fide belief that the offender is not liable to act in the
manner prescribed by the statute. Penalty is not to be imposed merely because it is lawful to do so. Imposition
of penalty is a matter of discretion to be exercised judicially and on consideration of all relevant circumstances.
The relevant extract of the judicial precedent has been reproduced below:

Quote

An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal
proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in
defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its
obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be
imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised
judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the
authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a
technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that
the offender is not liable to act in the manner prescribed by the statute.

9. Under these circumstances, it is humbly entreated to dropped the penal proceedings under Section 117 of
the Customs Act, 1962 against the Noticee. For this act of kindness the Noticee shall be deeply obliged.

Dated 23/10/2018 Yours sincerely,

 AFFIDAVIT

I, Khanjan Thakkar, son of Jagdishbhai Thakkar, age: adult having permanent account number (PAN) as
ATTPK3236E resident of C-39, Ishwar Nagar society, Mani Nagar, Ahmedabad, hereby confirm following facts to
be true and correct to the best of my knowledge and belief and declare the same on oath:

1. I have engaged Sanjaykumar Ravjibhai Kachrola, son of Ravjibhai Bechar Kachrola, age: adult having
permanent account number (PAN) as ANBPK5185C resident of Subhashnagar, Rawapar Road, Morbi, Rajkot —
363641 to arrange fund transfer through RTGS to the accounts of Ws. Flower Impex, Mumbai and Mfs. Indiana
House Trading, Mumbai from time to time.

2. I have paid the sum, intended to be transferred to bank accounts of M/s. Flower Impex, Mumbai and
M/s. Indiana House Trading, Mumbai, to Mr. Sanjaykumar Kachrola in cash.

3. I have instructed Mr. Sanjaykumar Kachrola to use the aforesaid money for the purpose of making
transfer the same to the bank accounts of M/s. Flower Impex, Mumbai and Ws. Indiana House Trading,
Mumbai.

4. I confirm and declare that whatever fund transferred by Mr. Sanjay kumar Kachrola in the bank
accounts of M/s. Flower Impex and M/s. Indiana House Trading are paid by me and on my instruction only the
same have been arranged to be transferred the bank accounts of aforesaid firms by Mr. Sanjay kumar Kachrola.

5. I know that at present inquiry and investigation is being conducted against Mr. Sanjay kumar Kachrola
by Customs Authority, Air Preventive Unit, MI Division, Mumbai .and in this connection he has been issued
summons u/s. 108 of the Customs Act, 1962.

6. I know that this affidavit is meant to present before the Customs and other competent authority as an
evidence to establish the source of fund and other relevant information and explanation in respect of transfer
of funds to aforesaid firms.

7. I also undertake to appear before Customs authority and any other competent authority as and when
required to confirm/ re-confirm aforesaid content and also to provide any other information/ explanations/
evidences in connection with the aforesaid inquiry, to the extent in my possession and knowledge.

I declare all the above facts to be true and correct to the best of my knowledge and belief and I declare the
same on oath.

Place: Ahmedabad

Date: 30/10/2016
(Khanjan Thakkar)
December 27, 2017

The Pr. Commissioner of Customs (III),

Air Cargo Complex (Import)
Adjudication Cell
Sahar, Andheri (East)
Mumbai - 400 099

Hon'ble Sir

Subject: SCN No. SD/INT/APU/MISC-24/2015//SD/INT/APU/04/2015-16/ACC dated 17/02/2017 issued

by APU, ACC to M/s. Flower Impex and others

With reference to the above and in respect of the show-cause notice for levy of penalty u/s. 117 of the
Customs Act the undersigned most respectfully submits that -

1. I have not helped anyone in aiding and abetting in fraudulent import of goods in the name of M/s.
Indiana House Trading.

2. I have remitted the fund through my banking channel as per my regular business practice after
receiving commission from the party. This is my regular business which I am doing for several years. Thus the
captioned transaction of remittance on account of Indian House Trading was also such transaction, which I
have done with compete bonafide and without having any knowledge of its being use of fraudulent/malafide
purpose.

3. I was not aware of the fact that the money transacted through my bank account was purported to be
used for fraudulent or malafide use.

4. I had done the transaction in normal business transaction and with complete bonafide.

5. I personally did not know Flower Impex or Indian House Trading. I have been approached by Mr. Sanjay
Kachrola, whose affidavit confirming the same has been submitted.

6. I had also co-operated in the proceedings before the Custom department and also appeared as and
when required and furnished all necessary details along with documentary evidence to support the
same.

7. I undertake to co-operate to the best extent if any information, explanation is required from me in
future.

8. I have also given my statement on oath and therein also I have furnished all true details and whatever
questions have been asked I have furnished reply without hiding any facts.

9. I never had intention to aid the person in abetting in fraudulent import of goods.

10. In this connection I also rely upon my statement and details furnished during the course of recording of
my statement to establish that I had not aided anyone and also the fact that I was doing the thing
under bonafide belief only.
Under these circumstances I pray that kindly appreciate the facts and circumstances stated hereinabove and
no penalty be levied u/s. 117 of the custom act on me and oblige.

Thanking you.

Yours truly,
For, Radheshyam Enterprise
Samir Doshi
Proprietor
 AFFIDAVIT
I, Khanjan Thakkar, son of Jagdishbhai Thakkar, age: adult having permanent account number (PAN) as
ATTPK3236E resident of C-39, Ishwar Nagar society, Mani Nagar, Ahmedabad, hereby confirm following facts to
be true and correct to the best of my knowledge and belief and declare the same on oath:

1. I have engaged Sanjay kumar Ravjibhai Kachrola, son of Ravji bhai Bechar Kachrola, age: adult having
permanent account number (PAN) as ANBPK5185C resident of Subhash nagar, Rawapar Road, Morbi, Rajkot —
363641 to arrange fund transfer through RTGS to the accounts of Mis. Flower Impex, Mumbai and WS. Indiana
House Trading, Mumbai from time to time.

2. I have paid the sum, intended to be transferred to bank accounts of M/s: Flower Impex, Mumbai and
M/s. Indiana House Trading, Mumbai, to Mr. Sanjay kumar Kachrola in cash.

3. I have instructed Mr. Sanjay kumar Kachrola to use the aforesaid money for the purpose of making
transfer the same to the bank accounts of M/s. Flower Impex, Mumbai and M/s. Indiana House Trading,
Mumbai.

4. I confirm and declare that whatever fund transferred by Mr. Sanjay kumar Kachrola in the bank
accounts of M/s. Flower Impex and M/s. Indiana House Trading are paid by me and on my instruction only the
same have been arranged to be transferred the bank accounts of aforesaid firms by Mr. Sanjay kumar Kachrola.

5. I know that at present inquiry and investigation is being conducted against Mr. Sanjay kumar Kachrola
by Customs Authority, Air Preventive Unit, R&I Division, Mumbai and in this connection he has been issued
summons u/s. 108 of the Customs Act, 1962.

6. I know that this affidavit is meant to present before the Customs and other competent authority as an
evidence to establish the source of fund and other relevant information and explanation in respect of transfer
of funds to aforesaid firms.

7. I also undertake to appear before Customs authority and any other competent authority as and when
required to confirm/ re-confirm aforesaid content and also to provide any other information/ explanations/
evidences in connection with the aforesaid inquiry, to the extent in my possession and knowledge.

I declare all the above facts to be true and correct to the best of my knowledge and belief and I declare the
same on oath.

Place: Ahmedabad
Date: 30/10/2016
(Khanjan Thakkar)
The Pr. Commissioner of Customs (III) - October 23,2017
Air Cargo Complex (Import) ...
Adjudication Cell

Hon’ble Sir,

Re.: Shri Samir Kishorbhai Doshi- Prop. Radheshyam Enterprise

Sub: SCN No. SD/INT/APU/Misc-24/2015//SD/INT/APU/04/2015-16 ACC dated 17/02/2017
Ref: F. No. S/3-Misc-40/2016-17 Adj (I) ACC dated 09/10/2017 issued by APU-ACC to Flower Impex

With reference to the above we state as under:

1. I have appeared and attended and appeared before the Superintendent, APU, R&I Division and
submitted the details, explanations, documents etc. called for from time to time during September-2016 and
October-2016.

2. My statement has been recorded by the Superintendent, APU also.

3. Now, I have received the above-referred letter, whereby my attendance is required along with
documents. It is further contended in the said letter that I have been served a SCN to which I have not
responded.

4. In this connection I have to state that I have never been served with any such SCN.

5. Moreover, I am not intimated and demanded the documents which I am supposed to carry or which I
am required to submit.

6. The above letter has been issued in common addressing to 10 persons at a time and I do not know
which part is relevant to me, as I have already stated that I have never been served any SCN and I am also not
asked to furnish any documents. Thus in the absence of service of any SCN and specification about the
documents required it is not possible to respond to the impugned letter.

I, therefore, request Your Honour to kindly consider the documents I have already submitted and explanations
I have already provided to the Superintendent, APU (supra) and still any further explanation/ documents are
required, kindly do let me know.

Thanking you.
Yours truly,
For, Radheshyam Enterprise
Samir Doshi Proprietor
 Menezes Clearing & Forwarding Pvt Ltd
'

To, Date: 10.08.2017

The Principal Commissioner of Customs (Import),
Air Cargo Complex,
Sahar, Andheri (East),
Mumbai-400 099.

Sir,

Sub: Reply to Show Cause Notice bearing F.No. SD/INT/APU/NIisc.24/2015//SD/INT/APU/04/2015-16 Dated

17.02.2017 to Mayur Mehta.

I, Mayur P Mehta, herein alter referred to as noticee, is in receipt of the captioned show cause notice and in
reply thereto, submit as under:

2. Noticce & Mr Pankaj B Tiwari (IEC holder of M/s. Flower Impex), Ni de the above show cause notice, in
respect of the 243 Bills of Entry listed in the Table-IV of the said SCN, have been jointly and severally asked to
show cause as to why :

a) Special Additional Duty amounting to the tune of Rs. 58, 30,401/- (Fifty Eight lakh Thirty Thousand Four
hundred Two only) as shown in Table — (IV) of the SCN, should not be demanded and recovered from them
under Section 28(4) of the Customs Act, 1962 along with appropriate interest under Section 28AA of the Act
ibid.

b) The goods (though physically not available) imported vide above 243 bills of entry totally valued at
Rs.12,11,49,606/- (Rupees Twelve Crore Eleven Lakh Forty Nine Thousand Six Hundred six only) should not be
confiscated under Section 111(o) of the Customs Act, 1962.

c) Further, the noticee has been called upon to show cause as to why penalty should not be imposed on
him as owner of Customs Broker firm M/s. Menezes Clearing & Forwarding Pvt. Ltd. under Section 112, 114A
and 114AA of the Customs Act, 1962 for his acts / role of deliberate connivance, forging of documents, false
statements and gross mis-conduct in the matter of fraudulent import of goods in the name of M/s. Flower
Impex.

Allegations:

3. above proposed action is based on the grounds stated in para 21 of the show cause notice under reply
which states interalia that:

(1) M/s. Menezes Clearing and Forwarding Pvt. Ltd had cleared 243 consignments imported in name of
M/s. Flower Impex through Air Cargo complex, Sahar, Mumbai;

(2) Shri PankajTiwari, IEC holder of M/s Flower Impex, in his statement recorded under section 108 of the
Customs Act,1962, has stated that he had formed the firm on the directions of Shri Mayur P Mehta (noticee) of
M/s. Menezes Clearing and Forwarding Pvt ltd. and had opened bank account in Bank of Maharashtra as per
the directions ofnoticee. That user id and password of said bank account were taken by Shri Mayur P Mehta
from him. That said account was operated by noticee using his user ID and Password. That notice , Mayor P
Mehta only has made the payment to the overseas suppliers and has made payment of customs duty through
ICEGATE and had cleared the consignments after claiming exemption from payment of SAD vide notification
No.21/2012-Cus dated 17.03.2012 and had taken delivery of the goods.

(3). Statements of transporters / drivers recorded under Section 108 of the Customs Act,1962, revealed that
the goods were not forwarded to the addresses mentioned in the bills of entry neither taken out of octorai
check naka of Mumbai. As such the conditions of notification No.21/2012 dt.17.03.2012 were not satisfied.

Therefore, importers were not entitled to exemption from SAD in respect of these 243 Bills of entry and SAD
amounting to Rs 58,30,402/ is required to be recovered from them.

(4) That TIN No.27440934980C mentioned in the Bills of entry of M/s. Flower Impex does not belong to M/s.
Flower Impex but the same belong to one M/s. Pleasant Traders; that said Tin No. was fraudulently mentioned
in the Bills of entry of M/s. Flower Impex. That importer and Shri Mayur P Mehta have also produced forged
VAT registration Certificate in the name of M/s. Flower Impex to avail exemption from 4% SAD.

(5) That Bills of entry were filed by notice Mr. Mayur P Mehta of M/s. Menezes clearing & forwarding Pvt. Ltd.
It was obligatory on the part of noticee to verify the authenticity of the documents before filing the Bills of
entry as per Regulation 11(n) of Customs Broker Licensing Regulations, 2013, however, in this case, notice Mr.
Mayor P Mehta himself is the mastermind behind the operation of M/s. Flower Impex and has wilfully misused
the customs provisions and has intentionally and fraudulently mis-declared TIN No. in the Bills of entry filed by
him for goods imported in the name of M/s. Flower Impex.

(5) That the Cyber Crime Branch, Mumbai Police, has informed that transactions for the period from
23.05.2015 to 09.07.2015 in respect of payment of customs duty by net banking relating to imports by M/s
Flower Impex, were made from the internet facility provided on mobile No.9221723188 belonging to Ms. Swati
S Vora. That Ms Swati S Vora is an employee of M/s. Menezes Clearing & Forwarding Pvt. Ltd., who in her
statement, has stated that noticee Shri Mayur P Mehta, had used her mobile number many times and he might
have used the internet facility on phone for making online transactions of in respect of M/s
Flower Impex.

(6). That the transactions for the period from 09.06.2014 to 26.11.2014 held in the account No.60166484597
of M/s. Flower Impex in Bank of Maharashtra, Cuffe Parade were also made from the IP address of telephone
No. 26829658 installed at the premises of M/s. Shrinathji Forwarders belonging to noticee.

(7) That notice had made contradictory statements regarding Shri Pankaj Tiwari having made duty payment or
transaction from his office.

(8) that Mr. Pankaj B. Tiwari has stated that the signatures on the GATT declaration Forms are not his
signatures; that there is no employee recruited in the firm of MIs. Flower Impex; that though GATT declaration
forms were not signed by the importer MIs Flower Impex, however the same were accepted and processed by
noticee for the clearance of consignments imported of M/s. Flower Impex. It is further alleged that the notice
himself through his custom Broker company MCFPL was preparing the documents for filing the Bills of entry
flouting all customs provisions including provisions under Regulations 11(a), 11(d), 11(0, 11(n) of CBLR, 2013.

(9) That noticee is the person behind depositing money in the bank accounts of M/s. Flower Impex through
different persons I firms. That Shri Dhiraj Bhai Shiva Bhai Patel, Director of Jalaram Finvest Limited has
confirmed in his statements dated 24.10.2016 and 15.11.2016 that noticee had given the cash to deposit in the
bank account of M/s. Flower Impex through RTGS transactions in the name of his company. He further stated
that notice is their regular customer, who used to bring cheque clearing business and that notice used to come
to his office with third party cross bearer cheques.

(10) That noticee was importing the goods in the name of M/s. Flower and Mr. Pankaj B Tiwari was a dummy
person whom noticee was paying an amount of Rs.20,000/- per month.

10.Facts

(i) Noticee is director of the Customs Broker firm M/s. Menezes Clearing and Forwarding Pvt. Limited and
hold Customs Broker License No.11/592 issued to it under Regulation No.7(1) of the Customs Broker Licensing
Regulations, 2013 (hereinafter referred to as "the Regulation"). The said license was valid upto 31 December,
2015.

(ii) M/s. Menezes Clearing and Forwarding Pvt. ltd. has been acting as Customs Broker for various clients
for clearance of imported/ export goods. M/s. Menezes Clearing & Forwarding Pvt. Ltd. has also worked as
Customs broker for clearance of goods imported by M/s. Flower Impex, a partnership firm in which one of the
Partner is Shri Pankaj B Tiwari.

(iii) M/s. Menezes Clearing and forwarding Pvt. Ltd. Has duly complied with KYC norms and has obtained
necessary documents for verification of the antecedents of M/s Flower Impex including KYC Form, copies of IEC
Certificate, Registration certificate under Value Added Tax, PAN Card, Bank Signature Verification letter, Ration
card, Electric Bill. M/s. Menezes Clearing and Forwarding Pvt. ltd. also obtained authorisation from Shri Pankaj
B Tiwari, partner of M/s Flower Impex, to act on his behalf as customs brokers. Hereto annexed and marked as
ANNEXURE "1" is a copy of said authorization.

(iv) M/s. Menezes Clearing and Forwarding Pvt. Ltd. had filed 243 Bills of Entry on behalf of M/s. Flower Impex
for import of goods such as mobile phone accessories, mobile screen guard, mobile touch screen with LCD,
mobile flip covers, mobile back covers, etc. The goods covered under 243 Bills of Entry were allowed to be
cleared after assessment of the said Bills of Entry, during the period 09.06.2014 to 26.11.2014.

(v) M/s. Menezes Clearing & Forwarding Pvt. Ltd., at the time of first import clearance of M/s Flower Impex,
had submitted all KYC documents including original bank signature letter to the concerned group and started
acting as CHA to M/s. Flower Impex only after getting permission from the concerned group for first Import
Clearance.

(vi) that at the time of filing the import documents M/s. Menezes Clearing and Forwarding Pvt. Ltd requested
the concerned Customs Group to conduct the First Check examination and only after such examination and
ascertaining that goods are as per declaration goods were cleared. That each of the Bills of Entry was
accompanied by required documents including declaration under Rule 10 of the Customs Valuation Rules, duly
signed by the Importer. Hereto annexed and marked Annexure "B" are some of the specimen copies of the Bills
of Entry filed by M/s. Menezes Clearing and Forwarding Pvt. Ltd.

11. The department has recorded statements of Shri Pankaj B Tiwari, Partner of M/s. Flower Impex, Noticee,
Ms Swati Vora and other employees of CHA firm, some of the transporters and some of the financiers and
issued the show cause notice, taking view that:

(i) That Shri Pankaj B Tiwari had subletted the IEC of M/s. Flower Impex to the noticee. That Shri Pankaj B
Tiwari also provided User ID and Password of his bank account to the noticee to enable the noticee to operate
the same and thereby allowing the noticee to clear the consignments on payment of customs duty through
ICEGATE.

(ii) that all the transactions in the account of M/s. Flower Impex were done from the internet facilities
provided to telephone No.26829658 installed in the office of the noticee. This shows that noticee was
transacting business of import in the name of M/s Flower Impex keeping Mr. Pankaj B Tiwari as a front person.

(iii) That the goods were not transported to the destination mentioned in the respective N Form and were
sold in the local market in Mumbai Jurisdiction.

(iv) that M/s. Menezes Clearing and Forwarding Pvt. Ltd. did not obtain authorization from M/s. Flower
Impex to clear each and every consignment of Flower Impex, instead he had obtained one time authorization.

(v) that GATT declaration has been signed by the noticee or his employee and not by the Shri Pankaj B
Tiwari, partner of the importing firm .

(vi) that noticee Shri Mayur P Mehta has earned profit of Rs.30,99,303/ from the business of three firms
therefore he himself is the importer doing business keeping Pankaj B Tiwari in the front.

(vii) that Mayur Mehta himself used to place orders for import.

(viii) that noticee Shri Mayur P Mehta has intentionally and fraudulently misdeclared TIN No in the Bills of
Entry filed by him in the name of M/s. Flower Impex to evade SAD to the tune of Rs.58,30,402/-

Submissions

11. At the outset, noticee deny each and every allegation made in the show cause notice under reply.

12. It is submitted that the entire case against the noticee is based on the department placing reliance on
the various statements of Shri Pankaj B Tiwari, partner of M/s. Flower Impex recorded under Section 108 of
the Customs the Customs Act, 1962. In his first statement which was recorded on 30.06.2015 Shri Pankaj B
Tiwari had stated that he is the Partner of the firm and was concerned with the imports of the firm, however,
In his subsequent statements recorded after a lapse of 07 months, he had made allegations that noticee used
his IEC and bank Account for the import of goods. It is submitted that the subsequent statements of Shri Pankaj
B Tiwari are false and the same were recorded under threat and coercion and inducement for implicating the
noticee. In this regard it is stated that the department has also initiated proceedings against M/s. Menezes
Clearing and forwarding Pvt. Limited, under CBLR, 2013. During the course of Inquiry proceedings, Shri Pankaj
B Tiwari was examined by the Department as a witness and was cross examined by the defence. Here to
Annexed is a copy of record of examination and cross examination of Shri Pankaj Tiwari. It may kindly be seen
from the said record of proceedings that Shri Pankaj B Tiwari has in his examination by prosecution as well as
during his cross examination by the defence has admitted that his second and subsequent statements were
recorded under threat and coercion by the APU Office; that he was threatened by the Additional commissioner
APU Smt. Manisha Goel to give his statement as per APU officer dictate or face consequences as IEC holder.
Therefore, it is submitted that the aforesaid statements of Shri Pankaj B Tiwari are not admissible as evidence
in the case. In support of this statement, noticee rely on the following
judgments :

(i) P. Arunachalam Vs. Commissioner of C.Ex., Pondicherry reported at 2007(220) E.L.T. 764 (Tri-Chennai)
(ii) Akshay LPG Valves Vs. Commissioenr of Cus. & Central Excise, Hyderbad-IV reported at 2016(337) E.L.T.
129(Tri-Hyd.).

13. Demanding Duty Jointly and severally is void ab initio.

It is submitted that the show cause notice under reply, seeks to demand duty from noticee and Shri Pankaj B
Tiwari, jointly and severely. It is settled position in law that show cause notice should clearly specify the duty
demand from each noticee separately. It is submitted that the show cause notice under reply is vague,
ambiguous and bad in law as it does not specify the duty demand from each noticee separately.

In the present case, duty has been demanded jointly and severely from the noticee and Shri Pankaj B Tiwari
under Section 28(4) of the Customs Act, 1962. It is submitted that notice under Section 28(4) of the Act is to be
issued to person chargeable with duty or interest requiring him to show cause as to why he should not pay the
amount specified in the notice and show cause notice should clearly specify the amount demanded from that
person. In support of above submission reliance is placed on the following judgments:-

(a) In Rimjhim Ispat Ltd Vs. Commissioner of Central Excise, Kanpur reported in 2013(293) E.L.T. 124
(Tri.Del), the Hon'ble Tribunal held that :

"6 As we have already observed that there are various decisions laying down that a joint demand and joint
penalty cannot be confirmed against the appellants against two persons, we deem it fit to set aside the
impugned order and remand the matter to the adjudicating authority for fresh decision for fixing the liability of
each and every individual separately. We make it clear that we have not gone to the merits of the case and the
Revenue as well as assessed are entitled to raise all the legal issues including the appreciation of evidence on
record, including the appellants request for cross-examination afresh in the de novo proceedings.

(b) Shri Hiren R Kapadia V/s. Commissioner of Central Excise, Raigad [2013- TIOL-198-CESTAT-MUM]

(c) Golden Tobacco Ltd. Vs. Commissioner of Central Excise, Delhi-I[2015(317) E.L.T. 164 (Tri.Del)]

14. Without prejudice to above and in any case customs duty can only be demanded from the Importer
It is submitted that the show cause notice under reply is void ab initio as it seek to demand duty from the
person other than the importer or his agent or employee.

15. It is submitted that the show cause notice under reply proceeds on the wrong presumption that M/s.
Flower lmpex is a fictitious firm which has been used by noticee as a front for illegal import of mobile
accessories. It is submitted that the allegation made in the show cause notice under reply is false and without
any basis since as per SCN also, firm is existing at the declared address and partner of the firm Shri Pankaj B
Tiwari was all along available to the investigating authorities.

16. It is submitted that M/s. Menezes Clearing and Forwarding Pvt. Ltd. Has not filed the bill of entry as an
importer rather had filed these bills of entry as Custom Broker on behalf of M/s. Flower Impex. Shri Pankaj
Tiwari has in his statements also admitted that lie had been visiting the customs broker from time to time to
sign the documents. As Pankaj Tiwari has having signed the documents, in terms of Section 2(26) of the
Custos Act, 1962, M/s. Flower Impex is the importer. In support of this submission reliance is placed on the
following judgments:
In Nalin Z Mehta Vs. Commissioner of Customs, Ahmedabad reported in 2014(303) E.L.T. 267 (Tri.Ahmd.), the
Hon'ble Tribunal held that:

"11. In view of the above reproduced ratio of various judgments, it has to be concluded that an importer under
Section 2(26) is a person who has filed the bills of Entry for the clearances and has paid the Customs duty. The
above said judgments also lay down a ratio that an IEC code holder cannot be denied the clearances of
consignments if he has filed the Bills of Entry. In these appeals before us, it is undisputed that Bills of Entry are
not filed by the appellant herein and it our considered view, he cannot be held as an importer.

Reliance is further placed on the judgment of the Hon'ble Tribunal in Bimal Kumar Mehra V/s.
Commissioner of Customs (Import), Mumbai reported in 2011(270) E.L.T. 280 (Tribunal.).

It is settled position in law that customs duty can only be demanded from the importer or his agent or
his employer. Thus in the present case, duty if any, can be demanded from M/s. Flower Impex only.

17. As regards the allegation that noticee had directed Shri Pankaj B Tiwari IEC holder of M/s. Flower Impex
to form the company and also to open the bank account in Bank of Maharashtra and had taken over the User
ID and pass word from him and transacted the business of the firm;, It is submitted that Shri Pankaj Tiwari in
his statement dated 30.06.2015 has categorically admitted that IEC No. belongs to him. He has also denied the
allegation that he had given his used ID and password to noticee, thus the allegation that noticee had
transacted the business of the firm is not correct. In this regard it is submitted that in relation to proceedings
under CBLR, 2013, Shri Pankaj Tiwari was examined and cross examined and he has confirmed his above
statement.

18. As regards the allegation that notice has earned Rs.30,99,303/- as profit from the business of the three
firms viz. Techno Traders, I\4/s. Flower Impex and M/s. Indiana House Trading, it is submitted that the said
observation is not correct as the department has not taken into consideration the cases of clearances handled
by customs broker for which bills were yet to be raised. The accounts are usually settled after a specific
interval. Upon settling of accounts, if any amount becomes payable, the same is paid to the client and Vice-
versa. M/s. Menezes Clearing and Forwarding Pvt. Ltd. has not recovered anything in addition to clearing
charges on which appropriate service tax has been paid.

19. As regards allegation in Para 23 to 25 of the show cause notice under reply it is submitted that the
customs broker had claimed the benefit of Notification No.21/2012-Cus dated 17.03.2012 on behalf of the
importer on the basis of information provided by the Importer. The customs broker had mentioned the TIN
No.27440934980C on the basis of the VAT registration Certificate of M/s. Flower Impex. The customs broker
had also requested for first check. In most of the cases the goods were assessed under first check and the
customs officers who had assessed the goods have also confirmed having verified the TIN No.

20. The Customs Broker was under a bonafide belief that the documents provided to them by the importer
are genuine and had nothing to doubt that the TIN registration certificate provided to them is not genuine. It is
submitted that the allegation that noticee was master mind behind the imports of M/s. Flower Impex is based
on the statements of Shri Pankaj B Tiwari given by him under threat coercion and inducement of bailing him
out of the case. This fact is admitted by him in his examination and cross examination in the proceedings
initiated against the customs broker under CBLR, 2013. It is submitted that from the bare perusal of the
statements of Shri Pankaj B Tiwari it can be seen that he has made allegations against noticee about the
alleged facts which he is not supposed to know unless he is importer, which shows that he had made
statements as put to him by the APU Officers. It is submitted that the customs broker has not contravened the
provisions of regulation 11(n).

21. As regards the allegations in para 28(i) of the show cause that noticee had asked Shri Pankaj B Tiwari to
open the bank account in the bank of Maharashtra, Nariman Point and have directed him to obtain IEC in the
name of M/s. Flower Impex; have transferred an amount of Rs.11,80,000/- from the bank account of M/s
Flower Impex, it is submitted that the same is based on statements of Shri Pankaj B Tiwari which he has
himself admitted having been given under threat coercion and inducement. The same are false and made with
ulterior motive to falsely fix the responsibility for 4% SAD on the customs broker. Further it is alleged that
PankajTiwari has stated that he had been getting Rs.20,000/- per month from noticee for allowing usage of his
IEC. It may be stated that in his earlier statement with respect to import in name of Techno Traders he claimed
that he was getting Rs.20,000/- per bill of Entry which itself shows that he had been making false statements
which are also improvised in subsequent statements as per the APU officer's dictates. The department has not
questioned him as to verify the truthfulness or otherwise of the said allegation.

22. As regards the allegation that the goods did not pass through octroi check naka, it is submitted that the
customs broker was required and had in fact handed over the delivery of the goods to Shri Pankaj B Tiwari
outside the Air Cargo complex. Submitted hereto are the sample copies of delivery note in respect of four Bills
of entry covered by the show cause notice under reply. It may be seen that Shri Pankaj B Tiwari had himself
received the goods and the documents after the clearance of the goods. It is submitted that once the delivery
of the goods was given to the importer, customs broker ought not be held responsible for any post clearance
violation. It is submitted that noticee was not aware of the alleged diversion of the goods by the importer to a
place other than that declared in the Bill of entry. It may thus be seen that noticee has not dealt with the
goods post clearance and hence was not aware of the violation allegedly committed by the importer which
rendered the goods liable for confiscation under the provisions of the Customs Act. The Customs Broker is in
possession of delivery note evidencing delivery of the goods to the importer after clearance in respect of all
the consignments.

23. The Department has sought to hold noticee as importer by placing reliance upon the report of the
cyber crime department of Mumbai police to hold that during the period from 23.05.2015 to 09.07.2015 the
transactions in the bank account were made from the mobile telephone of Ms. Swati S Vora who had earlier
worked with M/s. Menezes Clearing and Forwarding Pvt. Ltd. In this regard noticee had called for an
explanation from her wherein she has explained that Shri Pankaj B Tiwari , importer at times used to sit in their
office and she had allowed him to use the phone for his use. Hereto annexed and marked as Annexure "C" is
the copy of letter dated 04.04.2016 of Ms Swati Vora, where by she has accepted her mistake and stated that
the same was one by her at the request of Mr. Pankaj B Tiwari. Hereto annexed and marked as Annexure "D" is
the copy of letter dated 04.04.2016 of Ms. Swati Vora.

It is further alleged that noticee was using the id and password of bank account of M/s. Flower Impex
and was making the customs duty payment. This is based on the contention of Shri Pankaj B Tiwari. In this
regard assuming without admitting that Pankaj B Tiwari had given his id and password to the noticee, it is
submitted that no online banking transaction can be carried out without the OTP received on the phone
registered with bank. Shri Pankaj Tiwari has in his cross examination in regard to Inquiry under CBLR has clearly
admitted that he operated his account and issued the cheques and that his mobile number is registered with
the bank. He has at stage stated that he was informing the OTP to notice. It is also on record that Pankaj B
Tiwari the partner of the company had been himself interacting with the bank. He had also admitted that he
was getting his bank statement online on his mobile and that he had never asked the bank regarding the
transactions reported in the bank statements. It is therefore submitted that the view of the department that
noticee have been concerned with the imports is not factually and legally correct.
24. It is further alleged in para 28(vi) of the show cause notice that noticee have given two contradictory
statements in as much as in his statement dated 02.04.2016 noticee had stated that Pankaj B Tiwari might
have done the transactions in the account of MIs. Flower Impex using Wi-Fi facility at his office and that in an
earlier statement dated 22.09.2015 noticee had stated that Pankaj B Tiwari had never made any duty
transactions from his office. In this regard the factual position is confirmed by the explanation given by Ms.
Monica Vora ex-employee of MIs. Meneges Clearing wherein she had admitted that she had unauthorisedly
permitted Pankaj B Tiwari to use internet facility of the office without the knowledge of the noticee. Thus
there has been no contradiction in the facts stated by the noticee.

25. Without prejudice to above and in an event Custom Declaration were signed by the importer:

It is alleged in the show cause notice under reply that the custom declaration forms /GATT declaration
were either signed by noticee or any of his employees. It is submitted that the show cause notice under reply
only makes a bald allegation and no evidence has been placed on record in form of verification of signature by
authorised document examiner or other wise, to show that custom declaration forms/ GATT declaration were
either signed by noticee or any of his employees.

26. Without prejudice to above and in any event noticee and M/s. Menezes clearing and forwarding Pvt. Ltd.
have no role to play in the purported mis-declaration,
It is submitted that as a Custom Broker, there was nothing suspicious for M/s. Menezes Clearing and
Forwarding Pvt. ltd. to believe that there is mis¬declaration of TAN No. of the importer. It may also be stated
that the TIN Number is also verified by the Appraising group and they had also not at any stage pointed out
that the TIN No. was not correct.

Without prejudice to above and in any event SAD exemption is claimed on behalf of the importer:

27. It is submitted that the declaration made by M/s. Menezes Clearing and Forwarding Pvt. Ltd. on behalf
of importer for claiming exemption from SAD under Notification 21/2012-Cus dated 17.03.20112 were on the
basis of the details and documents provided by the importer. As a custom broker, noticee and M/s. Menezes
Clearing and Forwarding Pvt. Ltd. had no reason to suspect the correctness of the VAT registration certificate
and Form "N" provided by M/s. Flower Impex. It is submitted that a customs broker cannot be penalized for
the wrongful exemption claimed by an importer by making false declaration.

28. Admittedly after completion of custom formalities customs broker had handed over the goods to Shri
Pankaj B Tiwari on behalf of M/s Flower Impex outside the Air Cargo Complex. Post delivery of the goods, M/s.
Menezes Clearing and Forwarding Pvt. Ltd. retains no control over the goods. The transportation of goods was
arranged by M/s. Flower Impex and "Form N" was also in the name of M/s Flower IMpex. Since, we were not
concerned with the goods after the same were handed over to Shri PankajTiwari of M/s. Flower Impex, we are
not concerned with the alleged diversion of the goods to a place other than that declared in 'N' Form.

In view of the above, noticee and M/s. Menezes Clearing and Forwarding Pvt. Ltd. have no role in submitting
the purported fake VAT registration certificate and Form "N" for claiming exemption from SAD under
Notification No.21/2012 — Cus dated 17.03.2012.29.

29. Further, the department has alleged that notice had deposited huge amounts in the bank account of
M/s. Flower Impex through RTGS through different persons. The department has recorded the statements of
Shri Surrendra Singh, Kishan Singh Shelthawat of M/s. Sapan Traders, Shri Sadruddin UsmanKazi, Proprietor of
M/s. Suesam Impex, Shri Samir Koshor Bhai Doshi, Proprietor of M/s. Radheshyam Enterprises, Shri Chikani
Nitian Rajanbhai, Proprietor of M/s. J.P. Enterprises, who are alleged to have deposited the amounts in the
account of m/s. Flower Impex. It may kindly be seen that each of these persons have specifically denied
knowing noticee or having interacted with him at any stage.

30. In any event, cross-examination should be allowed of the persons whose statements have been
relied upon in the show cause notice under reply.

By the present reply submission, I pray for cross-examination of the persons whose statements have
been relied upon in the show cause notice under reply. It is settled position in law that the department cannot
rely upon the statements of witnesses unless they are examined by the Commissioner and thereafter offered
for cross examination by the notice. In this regard noticee reply upon following judicial precedent and section
138B of the Customs Act, 1962.

(a) Crown Lifters V/s Commissioner of Customs (Import) Mumbai[2015(328) ELT 590( Tri.Mumbai)]
(b) J & K Cigarettes Ltd. V/s. Collector of Central Excise [2009 (242) E.L.T., 189 (Del.)]
(c ) Inter Metal Trade Ltd. V/s. Commissioner of Central Excise, Indore [2014(308) E.L.T. 481 (Tri.Del)].

31. It is Further submitted that there are lot of contradiction in the statements recorded of various persons
such as Mr. Pankaj B Tiwari , M/s. Swati Vora etc. and therefore, providing cross examination becomes all the
more relevant for enabling notice to defend his case effectively on this ground also.

32. As regards the allegations in para 28(vii) alleging that Mayur P Mehta used to place the order for import
and thereafter used to forward the copy of invoice on e-mail id of M/s. Flower Impex viz. flowerimpex@
outlook.com which was created by Mayor P Mehta and that noticee used to inform Pankaj Tiwari password for
retrieving the print copy of invoices. It is submitted that the said contention is false and baseless. Shri Pankaj
Tiwari has clearly admitted during cross examination under CBLR enquiry that his statements were recorded
under threat, coercion and inducement and therefore the same are not reliable. Noticee therefore deny each
of the above allegations made by PankajTiwari and reiterate that h was no way concerned with the imports of
M/s. Flower Impex except handling the clearance work of the said firm.

33 As regards the allegations in para 28(viii) of the show cause notice under reply, it is submitted that M/s.
Flower Impex is the partnership firm of Shri Pankaj B Tiwari and M/s. Menezes Clearing and Forwarding has
dealt with the firm through Shri Pankaj B Tiwari. It is also reiterated that the TIN was declared on the basis of
registration certificate provided by Shri Pankaj B Tiwari and noticee was no way concerned with the alleged
duty evasion of 4% SAD.

34. As regards the allegations in para 28(ix) of the show cause notice, it is reiterated that noticee was no
way concerned with deposit of any cash amount in the bank account of M/s. Flower Impex. None of the
persons have in their statements recorded under section 108 of the customs act, 1962 have named noticee
person who gave them money for depositing in the account of M/s. Flower Impex.

35. As regards the allegations that M/s. Menezes Clearing and Forwarding Pvt. Ltd, the Customs Broker, has
contravened the provisions of Regulation 11 of CBLR, it is submitted that noticee or his company had no
knowledge about the omissions/commissions of the Importer and had not aided or abetted the
mis¬declaration by the Importer.

36. As regard the allegation that noticee and M/s. Menezes Clearing and Forwarding Pvt. Ltd. had failed to
obtain separate authorization for each and every consignment, it is submitted that there is usual practice of
obtaining authorization at the time of first import. Further It is also submitted that signature by the importer
on the import declarations is implied authority of CHA. In support of this submission, the noticee rely upon
following judgments:

(i) P.P. DuttaVs. Commissioner of Customs, New Delhi- 2001 (136) E.L.T. 1042 (Tri. - Del.)
(ii) Alankar Shipping &Clearing Pvt. Ltd. Vs. Commissioner of Customs (Gen.)- 2007 (217) E.L.T. 76 (Tri. -
Del.)

37. As regards the alleged violation of Regulation 11(d) of CBLR, 2013, It is submitted that we had duly
informed the importer to ensure compliance of all the provisions of the Customs Act and Rules/ Regulations. It
is submitted that the Customs Broker was not aware that the TIN given by the importer was not correct. Since
notice was not aware of the non compliance by the importer, it cannot be said that customs broker failed to
bring the non compliance to the notice of the Deputy Commissioner or Assistant Commissioner of Customs.

38. With respect to the alleged violation of the Regulation 11(e), it is submitted that the importer firm is
very much in existence. The Customs Broker had verified the antecedents, IEC and other KYC documents with
the originals as well as on line. Further, the Customs broker had sent communications by Registered post to the
importer firm which were duly received by the firm. The KYC documents were also verified with the originals as
well as on line. It is not correct that Mayur Mehta had persuaded Shri Pankaj B Tiwari to obtain IEC in the name
of M/s Flower Impex and transacted import business by obtaining user id and password of M/s. Flower Impex
and made payment of Custom duty. As already submitted in the preceding Paras, the CB has dealt with the
authorised person of the firm, hence, it is submitted that we had exercised due diligence to ascertain the
correctness of the IEC holder and have not violated the regulation 11(F) of CBLR,2013.

39. As regards regulation 11(n) of the CBLR, 2013 it is submitted that ShriPankaj B Tewari had given the
GATT Declaration Forms and the same were submitted to the department on a bonafide belief that he or his
authorised representative have signed the forms and there was no malafide intention on the part of the
importer, as could be seen from the fact that we have requested for First Check in respect of consignments of
this importer.

40. It is further submitted that for alleged contravention of Rule 11 under the CBLR, the Custom Broker has
been penalized by suspension of licence and it facing inquiry proceedings. It is well settled that penalty under
Section 112 cannot be imposed for violation of Regulation 11 of CBLR.

In any event no penalty can be imposed on under Section 112 Section 114A and Section 114AA of the
Customs Act, 1962.

41. In view of the submissions made above, it is submitted that notice has not contravened any of the
provisions of the Customs Act and Rules made there under and therefore no penalty can be imposed on me
under Section 112, Section 114A and Section 114AA of the Customs Act, 1962.

42. It is submitted that notice had not done any act which would render the goods liable for confiscation.

43. It is further submitted that penalty under Section 114AA of the Act is imposed on the person who
makes any false or incorrect declaration. No evidence has been placed on record to show that notice or any of
my employees have signed the Customs Declaration Form and other import related documents. noticee have
not knowingly falsified any documents. Further Section 114AA can be invoked only in cases of fraudulent
export to avail benefit of export promotion schemes. Section 114AA was inserted in the Customs Act vide the
Taxation Laws(Amendment )Bill, 2005 owning to the proposal from the Ministry of Finance, before the
Standing Committee on Finance, consequent to detection of several cases of fraudulent exports, which were
shown only on paper to avail benefits under various export promotion schemes without actually exporting any
goods. The standing Committee on Finance observed that owning to the increased instances of willful
fraudulent usage of export promotion schemes, the provision for levying of penalty upto five times the value of
the goods appeared to be in the right direction as he offences involve criminal inent which cannot be treated
at par with other instances of evasion of duty. However, the committee advised of the provision with due
diligence and care so as to ensure that it does not result in undue harassment. Therefore Section 114AA is not
applicable in this case.

44. The show cause notice under reply also requires noticee to show cause as to why the goods imported
vide 243 bills of entry totally valued at Rs.12,11,49,606/- should not be confiscated under Section 111(o) of the
Customs Act, 1962 . It is stated that notice is not concerned with the goods except for his CB firm having
handled the work of clearance of the goods and delivery of the same to Shri Pankaj B Tiwari, of M/s. Flower
Impex and submit that the goods were handed over to the importer after clearance and hence is not
concerned with violation of the conditions of the import and the alleged duty evasion and has thus not
rendered the goods liable for confiscation under section 111(o) of the Customs Act, 1962. However, it is
submitted that the goods were neither cleared by the importer against any bond nor the same are available for
confiscation and hence the proposed confiscation is not sustainable.

45. In view of the above it is submitted that, the proceedings initiated pursuant to the show cause notice
under reply are liable to be dropped and accordingly be dropped.

49. Should your honour do not agree with my aforesaid submissions, notice may be granted a personal hearing
before any decision is taken in the matter.

You faithfully,
(MAYUR MEHTA)
Director