TMI Blog2015 (7) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subletting of license. More so when the Commissioner has placed no reliance in his Order on the statements of Shri Pandey, taken on 7.11.2012 and 09.11.2012, to whom the license is said to be sublet. 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. Further, in the absence of any charge of violation of Regulation 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 client ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stics, was raising CHA bills on the importers. DRI wrote to Commissioner of Customs that change in constitution of appellant company namely M/s. Unison Clearing Pvt. Ltd. is a contravention of CHALR Regulations 2004 and the License was allowed to be used unauthorizedly in violation of Regulation 13(b). In view of the 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 Commissioner dt. 17.3.2015. The Commissioner confirmed violation of Regulations 12 (transfer of license), 13(b) - (transacting business through unauthorized persons), 13(d), 13(e), 13(n) and 19(8). The appellant CHA is in appeal before us against this order of Commissioner of Customs, Mumbai. 2. The Ld. Advocate appearing for the appellant stated that documents at Sr. Nos. 1, 2, 9 of Anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording 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 CHA under Section 108 of the Custom Act cannot be relied upon in proceedings under CHALR. He relied upon Smita International VS Commissioner 2008 (225) ELT 439 (Tri. Mum), Organic Enterprises India Pvt. Ltd. VS Commissioner 2009 (238) ELT (Tri. Chen.), Thakkar Shipping Agencies VS Collector 1994 (69) ELT 90 (Tri.). As regards the judgement of Delhi High Court on this issue in the case of Jasjeet Singh Marwaha VS UOI 2009 (239) ELT 407 (Tri. Del.) he submitted that this judgement holds that a retracted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs ago were never retracted. Shri Vishal Madan has tried to show that M/s. Suprabha Shipping Logistics were acting as pure agent 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 working for Shri Pandey. iv) He also recalled the judgments relied upon by the Commissioner. He distinguished the case law of Manilal Patel (supra) on the ground that in that case the appellant had already suffered sufficient punishment. But the same rationale cannot be applied ipso facto to all the cases. 4. We have carefully gone through the facts of the case and submissions made by both sides. Before we take up the Articles of Charge expressing violation of the CHALR Regulations which resulted in the revocation of the License, we would like to address the gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in section 17(1) is merely directory. 29. In Topline Shoes Ltd. Vs. Corporation Bank (2002) 6 SCC 33, the Supreme Court negative the argument raised that the State Commission constituted under the Consumer Protection Act, 1986 has no power to accept a reply filed beyond a total period of 45 days. It was held that such provision is not mandatory in nature. No penal consequences are prescribed and the period of extension of time 'not exceeding 15 days', does not prescribe any kind of period of limitation. The provision is directory 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 perform a statutory duty within the time prescribed therefor, the same would be directory and not mandatory. It was held to the following effect: 45. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: As approved by the Supreme Court: 'The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed. The meaning and intention of the legislature must govern, and these are to be ascertained not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other.' 'For ascertaining 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for breach of the enactment. 'An absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially'. It is impossible to lay down any general rule for determining whether a provision is imperative or directory. 'No universal rule,' said 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 case you must look to the subjectmatter; consider the importance of the provision that has been disregarded, and the relation of that provision to the general object intended to be secured by the Act; and upon a review of the case in that aspect decide whether the matter is what is called imperative or only directory. 119. In a recent judgment of this Court, Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It would render the entire proceedings invalid. Further, since there is no consequence stated in the Regulations for non-adherence to the time periods for conducting the inquiry, the time lines cannot be fatal to the outcome of the inquiry. Keeping the above judgment in mind, we come to the conclusion that the time lines laid down in the Regulations are directory in nature. 4.3 The next bone of contention is admissibility of statements recorded under Section 108 of the Customs Act in the CHALR proceedings. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the principal. Therefore, if the importers/exporters have contracted an intermediary person 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 he was compelled to sign statements before DRI. Therefore it is not strictly true to say that Lohia had transferred all the CHA work to Mr Pandey as held by the Commissioner. The statement of Shri Pandey also does not incriminate the appellant. Shri Pandey stated that he was not associated with the Customs clearance work at the port or Custom House. He further stated that his company M/s. Suprabha Shipping Logistics used to raise bills on the importer after including all charges and for the Customs clearance work, bills were raised by the appellant on M/s. Suprabha Shipping Logistics on 'account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Bombay High Court that his statement was recorded under coercion. Therefore the retraction of statements appear to carry weight due to lack of supporting evidence for the violation of the Regulation. Similarly the charge of violation of Regulation 22(n) which requires the CHA to be efficient is not on a strong footing and cannot be sustained. Except for a statement regarding undervaluation no concrete evidence is forthcoming against the CHA. 5.3 Regulation 19(8) requires the CHA to supervise over 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/94/13/CSTB/C-I dt. 29.1.2013 it had given in its findings that the appellant firm vide its letter dt. 9.8.2008 had requested Commissioner of Customs to include Shri Nagendra Pandey and Shri Sun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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