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2015 (7) TMI 178 - CESTAT CHENNAI

2015 (7) TMI 178 - CESTAT CHENNAI - 2015 (330) E.L.T. 667 (Tri. - Chennai) - Suspension of custodianship of CFS - illegal removal of seized goods due to failure on the part of custodian not ensuring safety and security of the seized goods kept under the appellant's custody - Held that:- Commissioner of Customs has rightly exercised the power to suspend the custodianship of appellant. Appellant s reliance on case laws which are related to suspension of CHA licence under CHALR and the appellant s .....

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only acts as an agent between customs & importer/exporter in processing of document and clearance of cargo. Therefore, the role of CFS as custodian and role of CHA are far different and cannot be termed as pari materia.

Suspension was ordered only in December 2004 and the Custom Department is yet to complete their investigation. We also find that seized containers are recovered by the police the subsequent investigation and filing of charge sheet by the police is still pending. There .....

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nue as custodian it will certainly cause jeopardy and hamper the process of investigation. Accordingly, we hold that appellant s plea for setting aside the suspension order does not merit consideration and the suspension order is liable to be upheld. - Decided against Appellant. - Appeal No. C/EH/40203/2015, C/MISC/40368/2015 & C/40458/2015 - Final Order No.40710/2015 - Dated:- 29-6-2015 - Hon ble Shri R. Periasami, Technical Member And Hon ble Shri P.K. Choudhary, Judicial Member,JJ. For the Ap .....

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to the appellant and the matter was posted for hearing on 26.5.2015. 2. Meanwhile, appellant also filed another MISC application on 12.5.2015 which was numbered as C/MISC/40368/2015 and requested that their case to be heard by the same Division Bench who heard their EH application on 29.4.2015. The above MISC application is taken up today. 3. Ld. Advocate appearing on behalf of the applicant submits that though the application was filed requesting that their case to be heard by the same Bench n .....

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to be heard by the same Bench is not maintainable as there is only one Division Bench functioning. Since the applicant themselves not insisting on their request the Misc. Application dt. 12.4.15 is rejected. 5. The E.H. application was taken up and considered their grounds and after disposing the MISC application for early hearing, the main appeal itself is taken up for disposal. 6. The brief facts of the case is that appellants viz. M/s. Chandra CFS and Terminal Operators Pvt. Ltd. were appoint .....

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t came to notice that the said container was removed unauthorizedly on 19.12.2014 by using forged documents. On preliminary scrutiny of the documents prima facie it appeared that illegal removal of seized goods due to failure on the part of custodian not ensuring safety and security of the seized goods kept under the appellant's custody. Since the nature of offence was very serious and cast doubt on the bonafides of the appellant, the proceedings were contemplated. The Commissioner of Custom .....

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ed the said CFS and discharging the obligation without committing any breach of customs laws. The said CFS was operating round the clock. As a custodian, they undertook every step on safety and security of the cargo. The container SEGU 1697558 pertaining to the exporter M/s.Jayam Plast & Co. containing 304 logs of Red Sander Wood and 51 bags of Cement was seized and it was handed over to them for safe custody. He further submits that they have immediately locked the container No.SEGU 1697558 .....

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t and FIR (No.558/2014) with local police station at Minjur and also filed additional complaint before the Superintendent of Police for retrieval of seized container. They have identified the employees Mr. Kanagavel, Indital Operator and Mr.Gowtham, who were suspects in committing the offence. The police arrested Mr.Kanagavel. 7.1 Police retrieved the container on 22.12.2014 from the jurisdiction of Puzhal Police Station and the same was brought to Minjur P.S. They duly reported the retrieval of .....

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fore the court their no objection for handing over the said container to the appellant for safe custody. He submits that only on account of their immediate action of filing F.I.R the container was retrieved by the police. They have also taken action against the employees involved in the offence. The police is yet to complete the investigation. 7.2. He submits that suspension order was issued by The Commissioner of Customs is not sustainable. The department has not made out any specific charge in .....

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t CHALR, 2009 is pari materia to HCCAR, 2009. He also relied on copy of the order dt. 4.2.2015 of Judicial Magistrate -I, Ponneri which is in Tamil and submitted a free translation in English wherein the Hon ble Lower Court has ordered interim custody of the said container on execution of bond. He also countered all the points raised by customs in their counter affidavit and submits that the department is alleging the past incidences of smuggling of Red Sanders, Muriate of Potash in 2009 and 201 .....

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plained the modus operandi of smuggling of Red Sanders in the guise of export cargo of Plastic Granules. He further submits that custodian appointed by the government under Section 45 of the Customs Act is bound to discharge their duties and obligations as per HCCAR for handling of import and export cargo. The government has appointed the custodianship with faith that they will diligently discharge their duties. He submits that offence case was registered against M/s.Jayam Plast & Co. who at .....

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goods were re-stuffed in the same container and was handed over to appellant for safe custody. He submits that an offence case was registered and SCN dt. 5.2.2015 was to the exporter, to the appellants and to all the persons involved in the smuggling of Red Sanders proposing for confiscation of goods under Section 113 of Customs Act and penalty under Section 114 of Customs Act. Copy of SCN enclosed with counter affidavit. 8.1 He further submits that appellant has violated provisions of Regulatio .....

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hat said container was stuffed with wooden pieces of mango/coconut/palm woods. This confirms that appellant being custodian is not aware of the contents of the container nor verified the weight. They fail to notice removal of seized container affixed with sticker with false container number GEST1896575 and pasted on it. 8.2 He further submits that it is the Superintendent of Customs in charge of CFS who first noticed the lapse and informed the CFS and the Custom House on 19.12.2014. It was only .....

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against M/s.Point to Point, an exporter for an attempt to export Pottash (MoP), a restricted item and goods were seized and it was handed over to the appellants CFS. The appellant had allowed entry of goods without any export documents. The appellant and the AGM of the appellant was imposed penalty of ₹ 25.0 lakhs and ₹ 10.0 lakhs respectively vide OIO dt. 5.5.11. The Hon ble Tribunal vide order dt. 28.2.2013 directed for predeposit of ₹ 5.0 lakhs and ₹ 2.0 lakhs respect .....

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is yet to complete their investigation and yet to file the charge sheet, the department is yet to complete their investigation. He submits that they have requested the Lower Jurisdictional Court for permission to examine the containers which is under the custody of police. Any revocation of suspension would cause serious jeopardy to the investigation. Therefore he prayed for dismissal of appeal. He relied on the following citations :- (i) Commissioner of Customs Vs Raj Clearing Agency 2006 (199) .....

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Chennai in the impugned order suspended the approval granted to the CFS in terms of powers vested under Regulation 11 (2) of HCCAR, 2009. The reasons for suspension of their custodianship has already been set out in the facts of the case as narrated above. The container bearing No.SEGU 1697558 containing 9.430 kgs was seized by Customs authorities and the same was handed over to the appellant for safe and secure custody pending further investigation and adjudication proceedings. There is no disp .....

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on record that the said seized container SEGU-1697558 was removed/cleared out of appellant CFS by using forged gate pass and false container No.SEGU-1896575 were affixed on the seized container by sticker. From the above, it is clear that the seized container No.SEGU 1697558 was illicitly removed which was in the custody of the appellant and they have admitted these facts. The appellant s main contention that they have not involved in the modus operandi of illicit removal but only two of their .....

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bject to execution of Bond for ₹ 2 crores with other conditions. Appellants also relied on the statements recorded by police and mahazar drawn dt. 8.1.2015 by police in support of their contention. 10. On perusal of records and the counter affidavit filed by the Commissioner of Customs, the department contended that it was the Superintendent of Customs who was on duty at the CFS on 19.12.2014 had noticed missing of the container and instructed the custodian to verify their records and also .....

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tailed investigation. As already discussed above, we find that there is "Amanat Main Khayanat" breach of obligation entrusted with the custodian i.e appellant for safe and security of the cargo. 11. It is pertinent to see that appellant was duly appointed by the Government as a Container Freight Station in terms of provisions of the Customs Act read with relevant public notice issued by the Customs. It is abundantly clear that being a CFS as a custodian, they are responsible for safe a .....

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pt of appointment of Container Freight Station, for handling Customs cargo outside port of import the entire customs cargo clearance was being done only at the port itself which was handled by the Port Trust Authority who are appointed under the Port Trust Act. We are unable to accept the appellant contention that it is stray and isolated incident of lapse of security of cargo as it is evident from the Revenue' counter affidavit that similar instance of smuggling of Red Sanders, Muriate of P .....

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gistered in September 2013 and Customs seized 14.750 MTs of Red Sanders in appellant s own premises. On perusal of SCN dt. 12.9.2004 issued by Commissioner of Customs, Chennai, the modus operandi adopted is identical to the present case where the substitution of the cargo was done by tampering of the container doors/hinges with seals intact and the appellant was issued SCN for imposition of penalty under Section 114 of the Customs Act. In the present case, the Commissioner of Customs already iss .....

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ety and security of Customs goods, the Department has the right to take action under Regulation 11 (2) of HCCAR. Therefore, we are unable to accept the appellant contention that the impugned order has not brought out any charges. 12. In terms of Regulation 11 (2) of HCCAR, 2009, the Commissioner of Customs has rightly exercised the power to suspend the custodianship of appellant. Appellant s reliance on case laws which are related to suspension of CHA licence under CHALR and the appellant s plea .....

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