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M/s Unison Clearing Pvt Ltd Versus Commissioner of Customs (General) Mumbai

2015 (329) E.L.T. 269 (Tri. - Mumbai) - Revocation of license - Violation of the CHALR Regulations - Non-compliance to the specific time limits - Subletting of license - whether the time line periods laid down in Regulation 22 are directory in nature or mandatory in nature - Held that:- No evidence to show that there has been sale or transfer of the license. No consideration is shown for such transfer nor any transfer agreement. The only evidence is that the appellant was receiving fixed amounts .....

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s doing the Customs clearance work.

Entire case is based on the original statements of Shri Vishal Madan and Shri Pal Singh Lohia and their statements at the time of cross examination have been discarded. In the relied upon documents, only statement dated 09.10.2012 of Shri Madan is considered and his other statements have not been made relied upon documents. Therefore, unless the original statements are corroborated by other material evidence it is difficult to sustain the charge of .....

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n 13 (a) which requires the Custom House Agent to obtain an authorization from each of the companies for whom he is employed as a CHA, we do not find any reason to sustain the violation of Regulations 13(d) and 13(e) which require imparting correct information and rendering proper advice to the clients. The charge that the CHA advised the importer to stack thinner material in the front of the container is not supported by the physical examination of the containers nor by any other corroborative .....

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he Regulations for which they have charged the appellant. The circumstances do not call for revocation of the License which will deprive the CHA and his employees of the source of their livelihood. We therefore set aside the revocation as well as the forfeiture of the security deposit. - Decided in favour of appellant. - Appeal No. C/85867/2015-Mum - Final Order No. A/1446/2015-WZB/CB - Dated:- 5-6-2015 - P S Pruthi, Member (T) And Ramesh Nair (J),JJ. For the Appellant : Shri H O Tiwari, Adv. Fo .....

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ting undervaluation, Shri Pandey is alleged to have asked Shri Vishal Madan to request overseas suppliers to stuff packages containing the thin material at the door side of the import containers and thicker material at the back. Shri Pall Singh Lohia in his statement under Section 108 of the Customs Act stated that Shri Pandey was using their CHA Licence, the office premises was under the control of Shri. Pandey, they had sent a request to the Customs for inclusion of Shri Pandey as a Director, .....

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he investigations by DRI, the License was suspended by Commissioner on 15.11.2012. After post decisional hearing the suspension was continued vide Order No. 56/2012 dated 7.12.2012, under Regulation 20(3). In appeal, CESTAT revoked the suspension on 29.1.2013. Subsequently, a notice dated 17.05.2013 was issued to the appellant under Regulation 22(1) and the inquiry conducted under Regulation 22 resulted in revocation of the CHA License with forfeiture of security deposit vide order of Commission .....

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re merely letters, show cause notice, and order and not any documentary evidence. Out of the other relied upon documents, he submitted that no reliance has been placed by the Commissioner on the statement of Shri Pandey and the case is only made out on the statements of Shri Lohia and Shri Vishal Madan. These two persons in their cross-examination did not state anything based on personal knowledge but only stated what they had stated in statements given before DRI. However, these statements were .....

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an. He submitted that during the searches conducted, nothing incriminating was recovered from the premises of the appellant. 2.1. Regarding the specific Articles of charge he stated that the cross-examination of Shri Vishal Madan and Shri Lohia does not show that the CHA work was sublet. Only because the bills were raised by the Company of Shri Pandey i.e. M/s. Suprabha Shipping Logistics on the importer does not establish violation of Regulation 12. The appellant raised their bill on M/s. Supra .....

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. Dutta Vs. Commissioner of Customs, New Delhi 2001 (136) ELT 1042 (Tri. Del.). The Ld. Advocate stated that the law in this regard has not changed since the judgment was delivered and there is no violation of Regulations in the methods adopted for raising the bills. 2.2 According to him, there is no violation of Regulation 13(b) because their employees were holding Custom passes. Further authorizations of importers were obtained by them in all cases. He stated that statements relied upon again .....

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racted statement can be relied upon only if on examination of evidence it is concluded that the statement was true and voluntary. 2.3 The Ld. Advocate relied upon the following judgments to state that if the time limits prescribed in Regulation 22 are exceeded, the same cannot be condoned in the matter of enquiry. He relied on A.M. Ahmed and Company VS Commissioner 2014 (309) ELT 433 (Mad.) and Manilal Patel Clearing Forwarding VS CCE (Gen.) Mumbai 2013 (294) ELT 472 (Tri. Mum). 3. Ld A.R. appea .....

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lied on Smile Shipping Services 2014 (308) ELT 646 (Mad.) in which the Hon'ble High Court directed Commissioner to pass final order in a case where there was a delay of four years. He relied on various judgement such asPML Industries Ltd. Vs. Commissioner of Central Excise 2013 (290) ELT 3 (P&H) in holding the view that the word "shall" or "may" may not be determinative of treating a provision of law as directory or mandatory. According to him, this judgement shows th .....

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Writ Petition filled before the Hon'ble High Court cannot be considered as retraction in view of the following case laws. (i) Shaikh Anwar Shaikh Ismail Vs. Commissioner 2015-315-ELT-229 (Tri. Mum.). (ii) Zaki Ishrati Vs. CCE Kanpur 2013-29-ELT 161 (All.). (iii) K.P. Abdul Masjeed Vs. Commissioner 2014-309-ELT-671(Ker.) Therefore according to him, the statement recorded under Section 108 is admissible as held in Jasjeet Singh Marwaha (supra). (iii) There is enough evidence of subletting of .....

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on their behalf. Shri Vishal Madan did not deny his link with Shri Ramesh local Angadia, regarding transfer of cash, who was arrested under Cofeposa and released by High Court on technical grounds. In the case of P.P. Dutta (Supra) the importers stated that the person concerned was their agent. However, in the present case Shri Pandey is not the agent of importers but is dealing with the CHA i.e. Shri Vishal Madan. The Customs pass holders in their initial statements stated that they are workin .....

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he revocation of the License, we would like to address the general issues raised by the appellant. 4.1 The first issue relates to delay in the enquiry proceedings and non-compliance to the specific time limits laid down for each step of the inquiry proceedings under Regulation 22. Ld. AR candidly said that there has been delay on both sides. According to him, the appellant delayed the proceedings by not attending the personal hearing for almost three months and, therefore, the Assistant Commissi .....

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ffence report in terms of Regulation 22(1). Further, we also find that the inquiry report was submitted on 10.10.2014 i.e. after a lapse of 15 months against the stipulated period of 90 days. 4.2 The question to be answered is whether the time line periods laid down in Regulation 22 are directory in nature or mandatory in nature. Both sides have justified their position with the help of case laws of Tribunal as well as High Courts, as mentioned in paras above. We find that this issue has been de .....

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the order of punishment. The office memorandum cannot be construed as imposing a rigid time-limit for the imposition of the order of punishment. In Remington Rand of India Ltd. Vs. Workmen AIR 1968 SC 224 , non-publication of award under the Industrial Disputes Act, 1947, within the period of thirty days would not render the award invalid. Non-publication of award within a period of 30 days does not entail any penalty and, therefore, the provision as to time in section 17(1) is merely directory .....

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rectory in nature. The provision is more by way of procedure to achieve the object of speedy disposal of such disputes. It is an expression of desirability in strong terms. But it falls short of creating any kind of substantive right in favour of the complainant reason of which the respondent may be debarred from placing his version in defence in any circumstances whatsoever. 30. In P.T.Rajan Vs. T.P.M. Sahir (2003) 8 SCC 498, the Supreme Court held that where a statutory functionary is asked to .....

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of sub-section (3) of Section 23 of the 1950 Act and not the ministerial action of actual publication of form 16. 47. The construction of a statute will depend on the purport and object for which the same had been used. In the instant case the 1960 Rules do not fix any time for publication of the electoral rolls. On the hand, section 23(3) of the 1950 Act categorically mandates that direction can be issued for revision in the electoral roll by way of amendment in inclusion and deletion from the .....

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result of filing of such nomination would become known to the parties concerned also after 3.00 p.m. 48. Furthermore, even if the statute specifies a time for publication of the electoral roll, the same by itself could not have been held to be mandatory. Such a provision would be directory in nature. It is a well-settled principle of law that where a statutory functionary is asked to perform a statutory duty within the time prescribed therefor, the same would be directory and not mandatory. (See .....

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State Bank of Patiala Vs. S.K.Sharma (1996) 3 SCC 364, Venkataswamappa Vs. Special Deputy Commissioner (Revenue) (1997) 9 SCC 128 and Rai Vimal Krishna Vs. State of Bihar (2003) 6 SCC 401)." 31. Recently in Delhi Airtech Services Private Limited & another Vs. State of Uttar Pradesh & another (2011) 9 SCC 354, the Supreme Court held to the following effect: "117. In Principles of Statutory Interpretation, 12th Edn., 2010, Justice G.P. Singh, at pp. 389-92 states as follows: &quo .....

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scertaining the real intention of the legislature', points out Subbarao, J., 'the court may consider inter alia, the nature and design of the statute, and the consequences which would follow from construing it the one way or the other; the impact of other provisions whereby the necessity of complying with the provisions in question is avoided; the circumstances, namely, that the statute provides for a contingency of the non-compliance with the provisions; the fact that the noncompliance .....

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d as directory. But all this does not mean that the language used is to be ignored but only that the prima facie inference of the intention of the legislature arising from the words used may be displaced by considering the nature of the enactment, its design and the consequences flowing from alternative constructions. Thus, the use of the words'as nearly as may be' in contrast to the words 'at least' will prima facie indicate a directory requirement, negative words a mandatory re .....

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n questions necessarily arising out of its enactments and on which it has remained silent. The first such question is: when a statute requires that something shall be done, or done in a particular manner or form, without expressly declaring what shall be the consequence of noncompliance, is the requirement to be regarded as imperative (or mandatory) or forms prescribed by the statute have been regarded as essential to the act or thing regulated by it, and their omission has been held fatal to it .....

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id Lord Campbell, L.C. 'can be laid down for the construction of statutes, as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed.' And Lord Penzance said: 'I believe, as far as any rule is concerned, you cannot safely go further than that in each .....

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lows: (a) While determining whether a provision is mandatory or directory, somewhat on similar lines as aforenoticed, the Court has to examine the context in which the provision is used and the purpose it seeks to achieve; (b) To find out the intent of the legislature, it may also be necessary to examine serious general inconveniences or injustices which may be caused to persons affected by the application of such provision; (c) Whether the provisions are enabling the State to do some things and .....

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inative factor. The use of the word "shall" or "may", respectively would ordinarily indicate imperative or directory character, but not always. (g) The test to be applied is whether non-compliance with the provision would render the entire proceedings invalid or not. (h) The court has to give due weightage to whether the interpretation intended to be given by the court would further the purpose of law or if this purpose could be defeated by terming it mandatory or otherwise. .....

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's plea that time lines cannot be diluted is not acceptable. We find that the time lines laid down in Regulation 22 are meant to quicken the enquiry proceedings and deliver speedy justice. At the same time, the purpose of the inquiry is to examine the role of the CHA in the fraud committed. Therefore, if the time lines not adhered to are considered mandatory and the matter is closed on this basis, the purpose of the Regulations would get defeated and so would the intent of the Legislature. I .....

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oceedings. The case of Jasjeet Singh Marwaha (Supra) has been cited. It was held in that case that "a statement recorded under Section 108 of the Customs Act 1962 of the CHA by the Customs authorities is admissible in evidence and can form the sole basis for suspending the CHA's License however subject to the usual safeguards that it is voluntary and truthfully. Where the examination under Section 108 of the Act is retracted it can only be relied upon if on examination of evidence one a .....

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7 and 3.14 of the Writ Petition that - "The petitioner No. 1 was forcibly taken to the office of DRI in late afternoon, where till early morning hours of the next day, he was coerced to give purported voluntary confessions and was again called at about 10.00 am in their office. He was threatened that although he was solely responsible for the affairs of the petitioner firms herein if he would retract the confession, he and his family would face dire consequences. 3.14. That, on 10.10.2012 a .....

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ive evidence to disprove the charges of violation of the CHALR Regulations. 5. The main violation is stated to be subletting of the license in contravention of Regulation 12. This Regulation states that "License not transferable.- Every license granted or renewed under these Regulations shall be deemed to have been granted or renewed in favour of the licensee and no license shall be sold or otherwise transferred". We find no evidence to show that there has been sale or transfer of the .....

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rson for Customs clearance work, no contravention of the CHALR is proved if the CHA is satisfied about the credentials of the importer for whom he is doing the Customs clearance work. In fact in his examination, Shri Pal Singh Lohia stated that Mr. Vishal Madan was introduced to them by Shri Pandey who is looking after their marketing. And the check list in respect of Bills of Entry is filed from his office with the help of his (CHA's) pass holders who are his employees. He also stated that .....

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oms clearance work, bills were raised by the appellant on M/s. Suprabha Shipping Logistics on 'account the importer' firm. It is also to be noted that the CHA commission and other clearing charges were paid through demand drafts. The allegation of payments in cash is not proved by any supporting data. From the above, it is clear that the entire case is based on the original statements of Shri Vishal Madan and Shri Pal Singh Lohia and their statements at the time of cross examination have .....

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This method of relying only on some statements lends bias to the decision. In the circumstances we are of the view that the charge of subletting of license is not proved and it cannot be said that the license was transferred. 5.1 We also do not find any definite violation of Regulation 13(b), which requires that the CHA must transact business in the Customs station either personally or through any employee duty approved by the Assistant Commissioner/Deputy Commissioner. It has not been establis .....

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find any reason to sustain the violation of Regulations 13(d) and 13(e) which require imparting correct information and rendering proper advice to the clients. The charge that the CHA advised the importer to stack thinner material in the front of the container is not supported by the physical examination of the containers nor by any other corroborative evidence. Reliance on the statement of Shri Vishal Madan is also put in question because he had stated in Writ Petition NO. 3951/2012 before the .....

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r the proper conduct of their employees. Here also, we have not come across any act of omission or commission against the Regulations by the CHA's pass holders except the statement stating that they were working under orders of Shri Pandey. We find no substantial violation in this regard because the fact remains that they were authorized pass holders of the appellant CHA. 5.4 We observe that when the Tribunal set aside the order of suspension of the appellants license vide its Order No. A/94 .....

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