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Shiraz Clearing Agencies Pvt. Ltd. Versus Commissioner of Customs (G) , Mumbai

2015 (11) TMI 1021 - CESTAT MUMBAI

Revocation of CHA License - Forfeiture of the security deposit - consignments through which cigarettes were smuggled were cleared by the CHA - violation of Regulation 12 & 13 - Held that:- Finding of Commissioner that M/s Sea Speed, being a logistics company, should not be aiding in the customs clearance work is unfounded. Even the payment mode by cheque on per container basis cannot and does not lead to the conclusion that the CHA had transferred the license to M/s Sea Speed. Once it is admitte .....

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we find that no show cause notice has been issued to the appellant under the Customs Act, in respect of the past consignments. Therefore, the violations are not proved even in respect of the past consignments alleged to have been smuggled by the logistics company/so called dummy IEC holders.

Appellant has shown laxity in not verifying the antecedents and functioning of his client at the declared address by using independent information. To this extent there has been a violation of Reg .....

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13 (b) and 13 (o) and also guilty of not taking adequate care to check the antecedents of the IEC holder who signed the Authorisation letter. We hold that revocation of the license up to December 2015 would be adequate punishment for these violations of the CHALR. - Decided partly in favour of appellant. - APPEAL No.C/87429/14 - Final Order No. A/915/2015-WZB/CB - Dated:- 17-4-2015 - Mr. M.V. Ravindran, Member (Judicial) And Mr. P.S. Pruthi, Member (Technical) For the Petitioner : Shri.Anil Bal .....

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5 crores and furniture valued at ₹ 9.88 lakhs instead of furniture only as declared in the bill of lading in the name of M/s Toyo India. Investigations revealed that M/s Sea Speed Logistics Pvt Ltd, the logistics company in this case, had been clearing import consignments in the name of dummy IEC holders using the CHA license of the appellant for which they paid fixed charges per container to the CHA. Investigations also indicated that in the past, 10 consignments through which cigarettes .....

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ll. 2.1 The appellant were charged with violation of Custom House Agents Licensing Regulations (CHALR) 2004. Specifically, the regulations violated are stated to be Regulation 12 no license shall be sold or otherwise transferred; Regulation 13 (a) CHA to obtain an authorisation from the company by whom he is employed as CHA; Regulation 13 (b) CHA to transact business personally or through approved employees; Regulation 13 (d) CHA to advise his client to comply with the provisions of the customs .....

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forfeiture of the security deposit. 4. Heard both sides and considered the submissions 5. The contention of the learned Counsel appearing for the appellant is that even though the appellant had not retracted the statements taken at the time of investigations, during the enquiry proceedings it was clarified by the appellant and the logistics company that the license was not transferred by the CHA. The logistics company was referring all its clients to the appellant for undertaking the work of cl .....

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id to them by M/s Sea Speed. 5.1 The learned Counsel emphasized that no bill of entry had been filed by them in respect of the consignment of cigarettes which was seized. Further that no show cause notice was issued to them under the Customs Act in the case of the consignment in question as well as the past consignments, which were alleged to have been cleared in the name of dummy IEC holders. 5.2 The learned Counsel stated that Regulation 13 (a) was not violated because authority letters were p .....

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ted because it has not been pinpointed as to what incorrect information had been imparted by them to the customer. The finding that the appellants actions led to smuggling of cigarettes is false because in the present case no show cause notice has been issued to them under the Customs Act. Therefore, Regulation 13 (n) is not violated. The IEC code was validly issued to Toyo India by DGFT and therefore, there is no question of violation of Regulation 13 (o) as the appellant produced an authorisat .....

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dwide Cargo Movers 2010 (253)ELT 190 (BOM) in which the Hon ble High Court upheld the revocation of the license. Similarly he also relied on the Tribunal judgement in the case of Dhakane and Co., 2014 TIOL 2274 CESTAT-Mum which held that a Commissioner is best placed to understand the importance of CHA in the customs area and the trust reposed in him by the Department. 7. We have carefully considered the facts of the case and the submissions made by both sides 8. We find in this case that the CH .....

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order against which the appellant are in appeal before us. 9. As regards the violation of Regulation 12, the thrust of the Commissioners findings is that the appellant had allowed M/s Sea speed to use the CHA license and receive payments on monthly basis by cheque. Further that violations of Regulations 12, 13 (a), 13 (o) is established by the confessional statements of Shri.Uday Khanna, the Director of CHA who also admitted that the employees who undertook the customs clearance work for M/s Se .....

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in the customs clearance work is unfounded. Even the payment mode by cheque on per container basis cannot and does not lead to the conclusion that the CHA had transferred the license to M/s Sea Speed. Once it is admitted that the CHA got his clients through an intermediary that is M/s M/s.Sea Speed, the violation of regulation 12 is not established beyond doubt. The appellant have not denied that the bills of entry were filed in their name and once the CHA has agreed to receive charges from M/s .....

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on. The genuineness of the letter has been doubted by the Commissioner because it is not dated and is not written on a proper letterhead of the company nor does it mention the details such as telephone number and fax number of the company. But the fact remains that the appellant had received import documents to be filed on behalf of the IEC holder. The flaws in the authorisation letter do not established beyond doubt that the same is not genuine. Customs did not verify the genuineness of the let .....

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a Speed. It was also admitted that the employees were on the payrolls of M/s Sea speed but were doing customs clearance work on the basis of customs passes got issued by the CHA for his company. The appellant have put up a weak defence in claiming that the employees were working under him. They have not been able to show any proof to the effect that the salaries of the employees undertaking customs clearance work were paid by them. Therefore, by not transacting business through approved employee .....

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how cause notice has been issued to the appellant under the Customs Act, in respect of the past consignments. Therefore, the violations are not proved even in respect of the past consignments alleged to have been smuggled by the logistics company/so called dummy IEC holders. 13. Coming to the last Regulation 13 (o) said to have been violated, the CHALR of 2004 require the CHA to verify the antecedents, correctness of the IEC number, identity of his client and functioning of his client at the dec .....

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issioner in his conclusion has opined that the case involving smuggling of cigarettes with duty evasion of ₹ 20.79 crores in the name of dummy IEC holders by subletting of CHA license makes it incumbent upon the CHA to receive the most rigorous punishment. We do find it a little strange that, on the one hand the Commissioner is almost accusing the appellant of aiding in duty evasion of a large amount, yet, on the other hand he has not implicated the appellant under the Customs Act. In fact .....

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