TMI Blog1993 (5) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-12-1990, informing that the enquiry was being held against them vide Regulation 23 of the Regulations on the allegations that (1) they had failed to obtain proper authorisation from two passengers namely K. Gangadhar and C. Abdulla, as required under Regulation 14(a), (2) they had failed to advise those two passengers to comply with the provisions of the Customs Act, 1962, and had also failed to bring to the notice of the concerned Assistant Collector, the act of non-compliance of those provisions by those two passengers, as required under Regulation 14(d), (3) they had refused access to their records relating to the said transaction to the officers of the Central Intelligence Unit as was obligatory of them vide Regulation 14(j), (4) they had failed to maintain records as required under Regulation 14(k) and (1) and (5) they had acted in a manner unbecoming of a holder of CHA Licence inasmuch as, (a) their proprietor Vijay Thakkar was carrying on business, besides that of the Customs House Agent, of working as consolidating agent for M/s. Rapid Shipping Agency of Dubai without entering into any legal contract and (b) he had engaged himself in attempting to smuggle contraband goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enquiry Officer and ordered revocation of the temporary licence and forfeiture of the security deposit. 3.1 Dr. N.R. Kantawalla, the Ld. Adv. for the appellants, has pleaded that, ex facie, the order of the Collector is bad in law, inasmuch as, the statement of imputation only alleged violation of the obligations imposed vide Regulation 14 and for any such violation, provisions of Regulation 22 could come into play and not those of Regulation 21 and that therefore, suspension and subsequent revocation of the licence could not be ordered. He has also contended that provisions of Regulation 21(2) also were not correctly invoked. As pleaded by him, non-fulfilment of obligations laid down under Regulation 14 could not tantamount to acts of misconduct. Referring to the scheme of the Regulations, the Ld. Advocate has contended that whereas, Regulations 21 and 23 would go together, Regulation 22 is independent of that, where suspension or revocation of the licence is not contemplated. He has pleaded that therefore, the order which has been passed invoking provisions of Regulation 21 and 23, is ex facie bad in law and be set aside. In his submission, this point be determined as a prelimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his statement recorded on 12-7-1990, which is completely inculpatory, and even assuming that the same was subsequently retracted, his two other statements have also been recorded subsequent to the alleged retraction, which also establish his involvement, and materially corroborate the earlier statement and those statements have not been retracted. In his submission, even going by the letter of alleged retraction dated 21-7-1990, Vijay Thakkar has admitted to have obtained signature and filled in the form for claiming goods by passengers K. Gangadhar and C. Abdulla, and this fact along with the statements of Vijay Thakkar leaves no scope to take a view different from the one taken by the authority below. On the legal issues raised, the Ld. SDR has submitted that what is alleged is not a mere non-fulfilment of obligations under Regulation 14, but the same is coupled with the allegations of misconduct, and specific allegation (vide allegation No. 5) is made as to the behaviour of Vijay Thakkar as unbecoming of a CHA and hence, the provisions of Regulations 21 and 23, have been rightly invoked. In his submission even non-compliance with the obligations under Regulation 14, would tan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... renders him unfit to transact any business in the Customs station . This therefore, provides a wide panorama to include the acts of CHA which make him unfit to act as such and makes it includible in the said provisions, and non-fulfilment of obligations vide Regulation 14, can certainly be covered thereunder. The question that immediately crops up is, then for what purpose Regulation 22 is incorporated. Reading of Regulations 21 and 22 together, it however appears that the provisions of Regulation 22 are supplementary to those of Regulation 21. What Regulation 22 provides is that, without recourse to the extreme penal provisions in Regulation 21, if it is found that non-compliance of any obligations of Regulation 14, are restricted to, or are in relation to his working in a particular section, then, instead of revoking CHA licence outright by way of penalty specified in Regulation 21, the CHA may be prevented from acting in that particular section. Provisions of Regulation 22 are not meant to be read in isolation but in conjunction with the other provisions. The word Notwithstanding appearing in Regulation 22, has therefore to be read accordingly. The deliberations on the point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with personal penalty, as is evident from the order No. S/14-4-325/90P, dated 13-5-1992, Vijay Thakkar has not been imposed any penalty, and the Additional Collector passing the said order has observed that: he has not been implicated in the case by either Shri Kutta Gangadhar or Shri Mohd. Hanif K. Elahi inasmuch as neither of them have stated that Shri Vijay Thakkar was to assist them in the clearance of the goods with the knowledge that the goods were illegally imported, Shri Vijay Thakkar is a Shipping Agent and was issuing the delivery order on behalf of M/s. Rapid Clearing and Forwarding of Dubai, and apart from issuance of the delivery order which he presumably did in the normal course of his business, there is no independent evidence to prove that Shri Vijay Thakkar did any overt act towards the clearance of the said goods. Though of course, thereafter, the Additional Collector has observed that therefore, he was giving benefit of doubt and was not holding him liable for penalty, the observations made by the Additional Collector adjudicating in the proceedings under the Customs Act, which have a direct bearing on some of the imputations here, cannot be ignored. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the grounds forming the basis of the proceedings and he may also put any question to any person tendering evidence, for or against the Customs House Agent, for the purpose of ascertaining the correct position. (4) The Customs House Agent shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings and where the Assistant Collector of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing." From this, therefore, it is very clear that for the purpose of making use of any oral evidence, in these proceedings, such evidence has to be recorded by the Enquiry Officer, and the person giving such oral evidence has to be offered to the delinquent for cross-examination. There does not exist any provision which authorises use of statement recorded vide Section 108 of the Customs Act as an evidence here. True, statement recorded vide Section 108 of the Customs Act, has been given some special status as to its acceptability in relation to the proceedings under the Customs Act but there, no provision like the one found in clause (3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he has acted as CHA for those two passengers without obtaining proper authorisation. In his statement of defence (reply to Show Cause Notice) the appellants have denied having worked as CHA for these two passengers. In his statement dated 12-7-1990, Vijay Thakkar does state that he had received bills of Lading for baggage for these two passengers and was to clear the goods. However, till the time of detection, he had not filed any Bill of Entry for those persons. On the contrary, both the persons themselves were sent to Nahva Sheva port to claim and collect their baggage. By guiding them and make them sign some necessary documents in his office, would not by itself, mean that he was to act as CHA for them. The Tribunal has, in A.N. Bhat v. Collector -1991 (55) E.L.T. 580 held the view that mere signing of some papers at CHA office would not prove involvement of CHA. There is no other evidence in the form of oral testimony of the concerned officer to prove that Vijay Thakkar acted or represented to be acting as CHA for them. As is reflected from what is mentioned in the order of the Enquiry Officer, one Mr. N.V. Chacko has stated that Baggage Declaration Forms were filed as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Thakkar that he has violated these provisions and with that the benefit of doubt would go in favour of the appellants. When Vijay is held to have no knowledge of illegality in import, question of alarming the Customs authority may also not arise. 13.4 The third allegation is that the appellants refused an access to their record and contravened Regulation 14(j). When however the appellants are not proved to have acted as CHA for these two passengers, there could be no question of their maintaining records. Even then, Vijay Thakkar has categorically stated that all his records were seized by R and I Branch during the search. The Enquiry Officer however, negatived the said plea by simply observing that on enquiry with the said Branch, the same is found to be not true. Sitting as an adjudicating authority, he was supposed to observe certain procedures. He ought to have summoned someone from that Branch, with the record of search and seizure at the appellant s premises. Such a slipshod approach is not warranted when proceedings with grave consequences resulting in cancellation of licence, are to follow. There is thus no evidence to show that the appellants deliberately withheld the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h holding CHA licence, are reported to have acted as consolidating agents for a firm at Dubai. Going by the Regulations, there does not appear any bar against CHA also acting as Shipping/Consolidating Agents. On the factual side, this position is admitted. With no bar existing, it cannot be held that the appellants acted in a way unbecoming of the CHA. While deciding this point against the appellants, an observation is made that there was a change in constitution and that was not reported as contemplated in Regulation 16. The said Regulation however refers to change in constitution of the firm, meaning that if there is a change in partnership, or conversion of a proprietory firm into partnership or vice-versa. That does not mean that if the licenced CHA also undertake some allied business he has to notify the same. Had there been a specific bar in CHA undertaking any other occupation, the allegation would have assumed importance and with admission on their part, could tantamount to an act of misconduct. That however being not the position here, the same cannot be construed as an act of misconduct. 15. In the result, the findings of the authority below cannot be sustained and are ..... 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