TMI Blog2015 (4) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the DR to produce printouts from the EDI system of the Department of the said Bills of Entry so that it could be verified whether it was the appellant CHA who had attended to the clearance work in respect of the consignments covered by the bills of entry and whether the importer had also signed the said bills of entry affirming the declarations made therein. In spite of sufficient time given, the DR could not produce the print outs. If the importers had signed the said bills of entry, then there was no requirement of producing authorizations separately by the CHA. Further from the records, it is seen that the CHA had in fact produced copies of the authorization letters from the importers. However, the adjudicating authority rejected the said evidence only on the specious ground that the same does not inspite confidence since they have been produced very late. I find the reasoning of the adjudicating authority quite absurd and irrational. When a documentary evidence is produced, even if belatedly, if the same has to be rejected, cogent reasons have to be given and rejection cannot be based on the subjective feeling of the adjudicating authority. In these circumstances, the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Artificial Flowers and Key Chain suspected to contain Computer Parts, Button Cell and Electronic Goods. On further intelligence, two more consignments were intercepted by DRI at ACC on 03.04.2003 and 01.04.2003. 4. The aforesaid consignments were examined without waiting for Bills of Entry to be filed, as available intelligence indicated that the said consignments may be cleared by manipulation of Marks and Numbers' on the packages or by substitution of packages. On examination of the said consignments, Intel Pentium Microprocessors and IC's (Rs.30,39,950/- CIF), Button Cell of Maxell Sonly (Rs. 14,81,610/-), Artificial Flowers and Game Circuit Board (Rs. 5,88,720/- CIF), LCD Projectors, Data Projectors, Cameras (Rs. 15,66,452/- CIF) and VCD Players, Iron Boxes (Rs. 3,70,000/- CIF) were found and the said goods were seized under Panchanama dated 31.03.2003 01.04.2003. 5. On further investigation, statements of various persons have been recorded including Shri Dhirubhai Shah, an employee for the name sake of CHA M/s Peak Agencies, was using the CHA licence No. 11/896 of M/s Peak Agency for clearance of the said mis-declared goods and the statement of Shri Ved Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January 2003, CIU Customs, ACC, Mumbai had booked a case regarding under valuation against M/s. Rishabh Enterprises run by Dhirubhai, brother of Bharat Bhai; that case was settled after paying a differential customs duty; that he got a wind and told Dhirubhai and Bharatbhai to stop using his CHA licence all together and surrender their Customs pass. Thereafter he revoked the CHA licence on the premise that the charges levelled have been proved. Aggrieved by the said order, the appellant is before us. 3. Heard both sides. 4. The learned Advocate appearing for the appellant submitted that with regard to Article of Charges under Regulation 12 of CHALR 2004, no licence shall be sold or otherwise transferred. At the time of investigation of DRI, Shri Dhirubhai Shah made a statement that he is using the licence of the appellant on payment of ₹ 5,000/- per month. In fact, this statement was given under duress and coercing which was retracted by Shri Dhirubhai Shah within 24 hours. The said statement is not reliable in the light of the evidence produced by the appellant and gets a salary of ₹ 5,000/- per month. It was duly entered in the Books of Accounts and to suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of mis-declaration does not arise. 4.5 In these circumstances, the learned Advocate prays that the impugned order should be set aside. 5. On the other hand, the learned A.R. appearing for the Revenue reiterated the impugned order. 6. Considered the submissions made by both sides and perused the records. 7. With regard to the Charges leveled under Regulation 12, we find that the appellant has produced the salary certificate, Books of Accounts and the Income Tax Returns showing that Shri Dhirubhai Shah was an employee of the appellant and the facts have not been controverted by the Revenue with any supporting evidence. The learned Commissioner relied on only the statement recorded under Section 108 of the Customs Act by the DRI. The said statement was also retracted by the appellant at the earliest available opportunity within 24 hours. Therefore, the said statement cannot be relied upon. IN these circumstances, we hold that the Charge under Regulation 12 of CHALR 2004 stands not proved. 7.1 With regard to the Charge levelled on the appellant under Regulation 13(a), we find that all the documents have been seized and were taken away by the DRI and the same have nei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that of Shri Ramesh Gada dt. 2.4.2003 and 3.4.2003. There are no evidence that the said statements were retracted. However, keeping in view of nature of the charge and the fact that the appellant has produced the income tax return and other documents as against the oral statement by the Revenue, which are not supported by further investigations and regarding financial flow or statements from various clients benefit of doubt has to go to the appellant and thus in my view also the Charge under Regulation 12 of the CHALR, 2004 stands not proved. 11. The 2 nd Charge against the appellant is for violation of Regulation 13(a) of CHALR, 2004. The appellant has not given any details about the seizure of the documents from his office/possession by DRI. It is also not clear when the documents were taken away by the Directorate of Revenue Intelligence and whether he has lodged protest or put in writing the details and whether such documents included authorization letters. In the absence of these detail, the question of returning the same to the appellant does not arise. Moreover, DRI's file was inspected and no such authorization letter seems to have been found. As per the Regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -letted his CHA licence. Moreover, the fact that this Tribunal has stayed the recovery of penalty of ₹ 20,00,000/- on Shri Dhirubhai Shah is of no consequence as it is only a prima facie view and is not a final order. Moreover the action proposed against the appellant is not relating to the consignment seized by the Customs/DRI but is also in relation to past conduct. In my view the CHA has failed to make effective supervision of his employee Shri Dhirubhai Shah and the charge against the appellant under Regulation 19(8) stands proved. 14. In view of the fact that three charges stands proved, invocation of the CHA licence and forfeiture of the entire amount of security is in order. Difference of Opinion In view of the Difference of Opinion in Member (Judicial) and Member (Technical), the matter may be referred to the President to nominate as 3 rd Member to resolve the following issues:- 1. Whether in the facts and circumstances of the case the charges levelled against the appellant under Regulations 13(a), 13(d) and 19(8) of the CHALR, 2004 are stands proved or not. 2. If the charges are proved, in that case, the punishment suffered by the appellant is sufficie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct of any such employees in the transaction of business as agents and be held responsible for all acts or omissions in regard to their employment. Whereas in the instant case it appears that Shri. Dhirubhai Shah an employee of M/s Peak Agencies was actively engaged in abetting mis-declaration of goods by using the CHA licence of M/s Peak Agencies and the CHA management did not exercise any supervisions over him. Therefore, it appears that M/s Peak Agencies have violated Regulation 19 (8) of CHALR, 2004. 3. The ld. Counsel for the appellant CHA M/s Peak Agencies made the following submissions:- (a) The matter pertains to the period 2002-2003 before the CHALR, 2004 came into force. Therefore, the allegation that no proper authorisation was obtained is not sustainable. All the documents and original bills of entry were taken over by the DRI during investigation and the documents were neither produced before the Inquiry Officer nor before the Commissioner during the adjudication proceedings. (b) No customs officer has been made a party to the show cause notice and no statement was recorded. There is also no allegation that the bills of entry were not signed by the importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s protected by way of a savings clause except as respect things done or omitted to be done before such supercession. Therefore, proceedings could have been continued under CHALR 2004. Further, the obligations of the CHA were also the same under both the Regulations except that the corresponding provisions were 14(a), 14(d) and 19(7) under CHALR 1984 as against 13(a), 13(d) and 19(8) under CHALR 2004. 5.2 As regards the charges of contravention of Regulations 13(a) and 13(d), both the charges arise from a finding in the order dated 26-11-2005 about alleged mis-declaration of imported goods by the importers mentioned therein wherein the appellant CHA had filed the bills of entry and one of the employees of the CHA Mr. Dhirubhai Shah was found involved in the alleged mis-declaration. Surprisingly, the CHA was not made a party to the said adjudication proceedings. This is quite strange. If the CHA was a party to the transaction and a statement had been recorded to that effect, show cause notice should have been issued to the CHA for various omissions/commissions. This omission on the part of the department in incorporation of the CHA in the alleged transactions, weakens substantiall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulation 13(a) has failed, this charge also cannot sustain and I hold accordingly. 5.5 As regards the last charge of not exercising sufficient supervision over the conduct of the employee of the CHA firm, I find that there is some substance in this charge. Both Shri. Dhirubhai Shah and Shri. Vedkumar Kambi, in their respective statements given, have admitted that Mr. Shah was acting on his own and had not kept the employer informed of the various deals undertaken by him in respect of customs clearance of imported goods. In one case, Sri. Shah was imposed with a penalty of ₹ 20 lakhs for his alleged involvement in mis-declaration of imported goods leading to evasion of duty vide order dated 26-11-2005. Therefore, there is sufficient evidence available on record to prove this charge against the appellant. However, for a contravention of Regulation 19(8) alone, revocation of CHA licence is not warranted and the punishment suffered by the appellant of not being able to operate as a CHA for the last two years is sufficient. 6. To conclude, I agree with Hon'ble Member (Judicial) that the charge of contravention of Regulations 13 (a) and 13 (d) by the appellant CHA is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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