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Chandrakant Thakkar, Ashte Logistic Pvt. Ltd., George Joseph Thokalath Versus The Commissioner of Customs (Exports)

2015 (3) TMI 778 - BOMBAY HIGH COURT

Violation of Regulation 6(n) and Regulation 9 - Imposition of penalty - Penalties under Regulation 12 (8) of the Handling of Cargo in Custom Area Regulation, 2009 and Section 158(3) of the Customs Act, 1962 and penalties on the co-appellant of ₹ 1 lakh each under Section 117 - Held that:- The allegations would reveal as to how the boundary wall of the CFS encompasses the whole area of Survey Nos. 117 and some 145 containers are stacked in the unauthorised area. The whole show cause notice .....

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t the initial wall of the CFS was constructed including the area of Survey No. 117. The legal owner of Survey No. 117 is Shri.Ramesh Gharat and they have a lease agreement with him for 15 years. The reply to this allegation in the show cause notice reveals that all the directions have been complied with and the total area together with the boundaries has been indicated in the reply to the show cause notice. Thus, the land Survey No. 117 was, according to the Appellants, already used by them as o .....

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s. Regulation 9 provides for an application for approval of Customs Cargo Service Provider and the details in which it has to be made. - If the show cause notice alleges violation and breach of these Regulations and section 8(b) and 141(2) of the Customs Act, 1962, then, we do not see how the Tribunal, in a single paragraph reasoning, makes no reference to any of these provisions or the clauses of the Regulations, but only section 158.

An imposition of penalty has a far reaching effe .....

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eal No. 52 of 2014 - Dated:- 3-3-2015 - S. C. Dharmadhikari And Sunil P. Deshmukh,JJ. For the Appellants : Mr. V. SridharanSenior Advocate with Mr. Jas Sanghavi and Mr. Ashish Philips i/b. M/s. PDS and Associates For the Respondent : Ms. S. I. Shah i/b. M/s. S. I. Shah and Co. JUDGMENT ( Per S. C. Dharmadhikari, J.) Having heard both sides and perusing the order passed by the Tribunal, we are of the view that the Appeals raise substantial questions of law. Since there are three Appeals and which .....

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ndling of Cargo in Customs Area Regulations, 2009 providing for imposition of penalties could, in the facts and circumstances of the case, can it be held that the Appellants before us have violated Regulation 6(n) and Regulation 9 of the Regulations? 3) The facts are few and simple and in the light of the order that we propose to pass, we do not wish to keep the Appeals pending. By consent, they are taken up for final disposal. 4) The company Ashte Logistics Pvt. Ltd. Applied for and obtained, i .....

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The private sector was called upon to participate in setting up Inland Container Depots (ICD) and Container Freight Stations (CFS). The proposals of the Appellants for setting CFS were approved and a letter of intent dated 5th May, 2008 came to be issued, copy of which is at Annexture 'B' to the Appeal paper book. 5) Thereafter, an application was made on 4th November, 2008 to the Commissioner of Customs, Nhava Sheva for notifying the entire area of 3.661 hectares situated at Ashte Vill .....

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at the outer boundary. 6) The Appellants rely upon these permissions which have been granted and notifying the area as a CFS. The Appellants were also notified as Custodians and Customs Notifications are relied upon in that regard. The Regulations, inter alia Handling of Cargo in Customs Area Regulations, 2009 (HCCAR) are referred and to rely upon the physical verification of the CFS premises carried out by the Deputy Commissioner of Customs, CFS Management Cell, Nhava Sheva on 2nd April, 2012. .....

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marcating and indicating the unauthorised portion from the authorised one. The Appellants wished to comply with this order, but prayed for revocation of the suspension. The suspension was then revoked. However, an inquiry was conducted, after which, a notice styled as show cause notice dated 25th June, 2012 was issued alleging violation of the Regulations and the permission to operate as CFS. The show cause notice inter alia proposed penalty on the Managing Directors of the companies. A reply wa .....

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e been referred to till paragraph 3 of the impugned order and all that has been observed and reasoned is in para 5. That para reads as under: 5. The ld. Counsel failed to produce the copy of application for registration. Moreover, in the Registration certificate survey no.117 was not entertained, therefore although the appellant may have applied for Survey no. 117 but without they have been granted to operate from works from Survey no. 117, the appellant is not entitled to operate from Survey no .....

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bunal has failed to apply its mind, firstly to the crucial issue and as to whether the Act and the Regulations empower imposition of penalties. The Act only enables vide section 158(1) framing of a Regulation, which may contain a stipulation with regard to imposition of penalty for contravening or aiding a contravention of the Rules or Regulations. There is no specific Regulation. Assuming that there are Regulations in the field which would denote that the title documents have to be verified and .....

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according to Mr. Sridharan, could not bring about a violation of the Regulations so as to impose penalty. These are all relevant and germane matters and completely left out of consideration by the Tribunal. Therefore, its order is vitiated by non application of mind and can safely be termed as perverse. 8) On the other hand, Ms. Shah appearing for the Respondent would submit that the Tribunal has in its discretion reduced the penalty and brought it down. The penalty was imposable because the re .....

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e legality and validity of the show cause notice. The allegations in the show cause notice, copy of which is at pages 50 to 52 of the Appeal paper book, would reveal as to how the boundary wall of the CFS encompasses the whole area of Survey Nos. 117 and some 145 containers are stacked in the unauthorised area. The whole show cause notice is premised on the fact that the Customs operations have been carried out in the area outside the demarcated CFS. Therefore, unauthorised area has been brought .....

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ement with him for 15 years. The reply to this allegation in the show cause notice reveals that all the directions have been complied with and the total area together with the boundaries has been indicated in the reply to the show cause notice. Thus, the land Survey No. 117 was, according to the Appellants, already used by them as open warehouse for storing various goods and which was enclosed by 10 feet wall. The land 1 acre was owned by one Ramesh Gharat, who has given the said land to the App .....

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n) and Regulation 9 could be held to be established and proved. Regulation 6(n) sets out the responsibility of Customs Cargo Service Provider not to make any alteration in the entry or exit points or boundary wall without the permission of the Commissioner of Customs. Regulation 9 provides for an application for approval of Customs Cargo Service Provider and the details in which it has to be made. 11) If the show cause notice alleges violation and breach of these Regulations and section 8(b) and .....

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