TMI Blog2015 (10) TMI 2330X X X X Extracts X X X X X X X X Extracts X X X X ..... gross violation of Regulation 20 while acting as CHA and Applicant being experienced as a CHA when he paved way for his Power of Attorney to indulge in serious malpractices which ultimately resulted in loss of revenue to Custom House to the extent of more than 80 lakhs, Revenue is justified in revoking the license as it would be detrimental to interest of nation - Decison made in case of CC, Customs Vs. H.B. Cargo Services [2011 (3) TMI 816 - ANDHRA PRADESH HIGH COURT] followed - Decided in favour of Revenue. - C/349/2012 - Final Order: 41288 / 2015 - Dated:- 28-9-2015 - Shri R. Periasami, Technical Member and Shri P.K. Choudhary, Judicial Member For the Petitioner : Shri S. Murugappan, Adv., Ms. S. Sridevi, Adv., For the Respondent : Shri B. Balamurugan, AC (AR) ORDER Per: P.K. Choudhary This appeal is filed against the Order-in-Original C.No. VIII/13/33/2003-CHAL dated 21.08.2012 passed by the Commissioner of Customs, Tuticorin, revocation of the license issued and forfeiture of the security deposit of ₹ 75,000/-. 2. The brief facts of the case are that the appellant M/s.Santon Shipping Services, licensed Custom House Agent, who has been issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the appellant submitted that the proceedings relate to the Bill of Entry filed on 02.09.2010 based on the investigation made by the DRI and action was taken against the importer and the licence of the appellants firm was placed under suspension. He submitted chronology of the events as under:- 1. Bill of Entry dated 02.09.2010 2. DRI letter dated 08.09.2010 3. DRI examination dated 17.09.2010 4. DRI Offence Report dated 21.09.2010 5. Suspension of CHA license under 20 (2) dated 04.10.2010 6. Continuance of suspension dated 07.10.2011 7. Show Cause Notice dated 18.11.2011 8. Reply to SCN dated 20.12.2011 9. Personal Hearing on 12.01.2012 10.Inquiry Report dated 09.04.2012 11. Reply to the Inquiry report dated 22.05.2012 12.Personal Hearing on 25.07.2012 13. Revocation order dated 21.08.2012 He further submitted that there was a lapse of two years in completion of proceedings whereas it should be within nine months from the date of receipt of offence report as specified in the Circular No. 9/10-Cus dated 08.04.2010. He vehemently argued that the impugned order cannot be legally sustained as it is not in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CHA does not know the importer and as has been decided by the Board to put in place the Know Your Customer (KYC) guidelines for CHAs so that the importers/exporters who indulge in fraudulent activities cannot misuse the export promotion schemes, fraudulent availment of export incentives and duty evasion. Accordingly, Regulation 13 of the CHALR, 2004 has been suitably amended to provide certain obligations on the CHA to verify the antecedent, correctness of import-export code number (IEC), identity and functioning of his clients in the declared address by using reliable, independent, authenticate documents, data and information. It would also be obligatory for the client/customer to furnish to the CHA a photograph of himself/herself in the case of an individual and those of the authorized signatory in respect of other forms of organizations such as firms/companies etc. and in proof of address, any two documents as listed in the annexure. He further submitted that the bill was given to unauthorized person. After the initial investigation, the behavior of the CHA shows that they were aware of the contents in the container. It was further alleged that the CHA firm has gone hand in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Bom.) 4. CCE, Hyderabad Vs. H.B. Cargo Services 2011 (268) ELT 448 (AP) 5. We have carefully considered the submissions made at length by both sides and perused the records. We find that the issue involved in this case is regarding the revocation of CHA licence of the appellant for the misconduct of one of his employees in respect of goods sought to be imported in violation of provisions of law. On perusal of the impugned order and the mahazar dated 17.09.2010 and the statements of various persons, we find that, it is the case where the appellants have violated the CHALR. We find that the imported goods declared as the scrap metals brought in 20 containers were detained. On examination it was found to contain used railway sleepers instead of scrap. Subsequently, it was, ordered for weighment of all the containers. We find that the role of CHA has been clearly brought out by the adjudicating authority vide para 16 to para 24, wherein, it is clearly said that once the goods are found to be misdeclared by the importer, and the same was ordered for detailed examination on 02.09.2010 from D.C. Customs, SANCO CFS. Whereas, we find that the CHA prepared another set of documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and got it forwarded to the group appraisers from different DC/ACs and AO/Eos, knowing well that, the goods were lying at SANCO CFS and not at GATEWAY CFS, the goods were used rail/railway sleepers ad not HM Scrap as declared, and the officers to whom they approached for clearance were not the proper jurisdictional officers for the said purpose. 17. As the cargo was a misdeclared item and the value of used rails was low, the CHA should have advised their clients to comply with the provisions of CHALR, 2004 but neither he has advised so nor brought the discrepancy to the notice of the proper Assistant Commissioner/Deputy Commissioner at Custom House. Thereby the CHA has violated Regulation 13(d) of CHALR, 2004. Instead of advising the clients to comply with the provisions of CHALR, 2004, the CHA himself colluded with the importer and facilitated the assessment of Bill of Entry even after knowing the mis-declaration and undervaluation of cargo. The CHA has failed to comply with Regulation 13(f) of CHALR, 2004. 18. Shri. Bose J. Fernando, the authorized signatory of the CHA signed blank documents without knowing the nature of cargo and the details of importers. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has violated the conditions of the bond executed by him under Regulation 10 of CHALR, 2004. 23. The counsel for the CHA stated that mis declaration of cargo was within the knowledge of the importer and CHA cannot be mistaken for that. If is was so, why the CHA presented the Bill of Entry at BATEWAY CFS for second time endorsement for examination. Mis-declaration of cargo appears to be known both to the importer and CHA. The counsel stated that endorsement taken was only a mistake, procedural irregularity and human error without any ulterior motive. By saying so the CHA wants to absolve himself from the responsibilities as a CHA. 24.01. In the case of CC (Gen) Vs. SS clearing and forwarding agency (P) Ltd. quoted by the defence in support, M/s. SB Impex filed bill of entry for the import sodium bicarbonate. On examination and investigation by the intelligence unit of Customs revealed that goods were Titanium di oxide. Importer was proceeded under Customs Act where as the CHA was not served any show cause notice under the Customs Act. After four years the CHA was issued show cause notice under CHALR, 2004 for revocation of licence and forfeiture of security for the allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75,000/- taken by the Applicant from Power of Attorney Agent Sri Sukumaran in anticipation of any personal misuse and also the subsequent termination of service of the said Sukumaran as well as the fact that in the last thirty years, the CHA, has not committed any omission and also the fact that his daughter has passed necessary examination qualifying to be a Customs House Agent on sympathetic consideration of the position of the Proprietor of the Applicant, while confirming the forfeiture security deposit of ₹ 25,000/- held that the suspension order of licence No. R359/CHA to be restricted up to 1-1-1997 and on depositing further sum of ₹ 25,000/-, the licence would stand renewed with effect from 1-1-1997. The Tribunal also directed that the Applicant should conduct the business personally in future and not to appoint any Power of Attorney Holder and that he should comply with the Act more scrupulously. With the above modifications of the order of the respondent, the appeal was disposed of by the Tribunal. 6. Subsequent to the order of the Tribunal, the Applicant forwarded the Original Term Deposit Receipt dated 20-12-1996 for a sum of ₹ 25,000/- drawn on I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdrawn. It is further stipulated under Regulation 20(7), the Custom House Agent should exercise such supervision as may be necessary to ensure the proper conduct of any such employees in the transaction of business as agent and be held responsible for all acts of omissions of his employees in regard to their employment. 9. On perusal of the report of the Enquiry Officer as well as the orders of the respondents and the Tribunal, it is beyond doubt that the Applicant committed gross violation of the Regulation while acting as Customs House Agent. In fact, the Applicant has admitted the malpractices found out by the Directorate of Revenue Intelligence which resulted in an evasion of duty to the tune of ₹ 80 lakhs. The only stand of the Applicant was that because of the wrong committed by his Power of Attorney, Shri Sukumaran, the various lapses discovered by the Directorate Revenue Intelligence had taken place. He only contended that by way of caution, he had taken a deposit of ₹ 75,000/- from the Power of Attorney to safeguard himself from any misuse. It only disclose that the Applicant instead of discharging his functions as a Customs House Agent in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of experience as Custom House Agent, when he paved the way for his Power of Attorney to indulge in serious malpractices which ultimately resulted in loss of revenue to the Custom House to the extent of more than 80 lakhs, there is every justification in the respondents in treating the action of the applicant as detrimental to the interest of the nation and pass the final order of revoking his licence. As far as the allegations levelled against the Applicant are concerned, it has been found established that the Proprietor of the Applicant Thiru Natarajan had signed on certain blank documents such as Bs/F and S/Bs without knowing the importers/exporters and the nature of goods imported/exported in spite of being in the clearing line over thirty years. It is also admitted that Sri D. Sukumaran, Manager-cum-Power of Attorney of the Custom House Agent concerned, had actively involved in the fraudulent act in connivance with the importers and others and that as per the Power of Attorney Bond executed by Sri K. Natarajan all acts, deeds and things done by Sri D. Sukumaran were to be construed as if they were done by himself. Therefore virtually all the fraudulent activities carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rne in mind. While Tribunals constituted under the Customs Act, and this Court exercising jurisdiction under Section 130 of the Customs Act, are required to ensure that the punishment imposed is commensurate to the proved acts of misconduct, the present case which not only involves negligence on the part of the CHA in issuing blank shipping bills, but also an act of corruption in receiving ₹ 150/- as consideration for each such blank shipping bill would necessitate imposition of the maximum punishment which, under the CHALR, is of revocation of the license of the CHA. Mere suspension of license, in the facts of the present case, would be wholly unjustified. Ordinarily, matters of discipline lie in the realm of the competent authority i.e., the Commissioner of Customs who is best placed to understand the importance of the CHA in a customs area, and the trust and confidence reposed on him by the customs department. In an appeal, preferred against an order imposing punishment under the CHALR, the CESTAT should not be swayed by considerations of misplaced sympathy. Interference with the punishment imposed would be justified only when it shocks the conscience of the CESTAT. No ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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