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Overseas Air Cargo Services Versus Commissioner of Customs (General) , New Delhi

Revoking the CHA licence of the appellant - Duty drawback claim - Overvaluation of goods - Held that:- Appellant had not taken authorization from the exporter who was found to be non-existent and the goods were found misdeclared and highly overvalued. - The appellant did not obtain any authorization from the exporter. It never met the exporter nor was in touch with the exporter even telephonically. Thus the question of advising his client to comply with the provisions of the Act simply does not .....

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ited are in regard to reasonability of the punishment stating that the punishment should be commensurate with the offence. This ratio is unexceptionable. It is pertinent to mention that reasonability of the punishment and whether the punishment is commensurate with the gravity of offence is a mixed question of facts and law and needs to be determined in the light of factual matrix of each case.

Offense is really grave inasmuch as no authorization was obtained from the exporter, the e .....

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exporter without making even preliminary enquiries about the genuineness of exporter in the name of which the documents were filed. Such dereliction of duty on the part of a CHA, can potentially have even graver financial/security consequences. Thus the appellant totally failed to discharge its duties as CHA thereby grossly violated Rule 13 of CHALR, 2004. Such serious violation on the part of the CHA can hardly deserve any condonation or leniency. - appellant blatantly and grossly violated the .....

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R ORDER Per R. K. Singh This appeal has been filed against the order dated 10.4.2015 in terms of which CHA licence No.R-41/97 of the appellant was revoked. 2. The facts of the case are as under: The appellant filed three shipping bills of ready-made garments namely Rayon Scarves on behalf of M/s Reliable Overseas (Exporter) under claim of drawback. The impugned goods were found to be overvalued for claiming undue export benefits. Noticing that the appellant (i) had not taken authorization from t .....

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he CHA licence of the appellant. 3. The appellant has contended that (i) the time-limit prescribed for suspension of licence was not followed and cited the judgments of Madras High Court in the case of A.M. Ahmed &. Co. vs. C.C. (Imports), Chennai - 2014 (309) ELT 433 (Mad.); (ii) time-limit prescribed under Regulations 22(1) of CHALR 2004 was also not adhered to; (iii) while it is the fact that it had not obtained authorization from the exporter there were no KYC norms in force during the r .....

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lant was not aware about the exporter but the export documents were received from freight forwarder in good faith. It cited the judgment in the case of M.J. Joshi vs. C.C., Chennai - 2010 (258) ELT 460. It also cited the judgment of the Tribunal in the case of Sanco Trans Limited vs. C.C., Bangalore -1996 (83) ELT 557 (Tribunal) and few others to advance the proposition that for lack of exercise of proper inspection, supervision and diligence, a mere admonition would meet the ends of justice and .....

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horization from each of the companies, firms or individuals by whom he is for the time being employed as Customs House Agent and produce such authorization whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs; (b) transact business in the Customs Station either personally or through an employee duly approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs; (c) not represent a client before an officer of Customs in any matter to w .....

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ated to clearance of cargo or baggage; (f) not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Commissioner of Customs, from a client who is entitled to such information; (g) promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debit or obligations owing to the Government and promptly account to his client for funds received for him from the Government or received from .....

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ation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gifts or favour or other thing of value; (j) not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Customs House Agent which is sought or may be sought by the Commissioner of Customs; (k) maintain records and accounts in such form and manner as may be directed from time to time by a Deputy Commissioner of Cu .....

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ed to him being lost, immediately report the fact to the Commissioner of Customs; (n) ensure that he discharges his duties as Customs House Agent with utmost speed and efficiency and without avoidable delay; (o) verify antecedent, correctness of Importer Exporter Code (IEC) Number, identify of his client and functioning of his client at the declared address by using reliable, independent, authentic documents data or information. The appellant did not obtain any authorization from the exporter. I .....

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the CHALR, 2004 as mentioned above it cannot be said that the penalty of revocation imposed by the Commissioner is arbitrary or unreasonable. The case-law of A.M. Ahamed & Co. v. C.C. (Imports), Chennai - 2014 (309) ELT 433 (Mad.) dealt with the suspension of the licence and not revocation of the licence and hence it is not applicable to the present case. We find that in this case the enquiry report was submitted on 16.1.2015 and the impugned order revoked the licence on 13.4.2015 and theref .....

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matrix of each case. The judgment of Falcon Air Cargo and Travel (P) Ltd. v. UOI - 2002 (140) ELT 8 (Del) cited by the appellant was regarding non-renewal of the licence and therefore is not applicable to the present case. In the present case the offence is really grave inasmuch as no authorization was obtained from the exporter, the exporter was found to be non-existent and no due diligence whatsoever was undertaken. In these circumstances mere filing of shipping bills can not be tantamount to .....

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e part of a CHA, can potentially have even graver financial/security consequences. Thus the appellant totally failed to discharge its duties as CHA thereby grossly violated Rule 13 of CHALR, 2004. Such serious violation on the part of the CHA can hardly deserve any condonation or leniency. In the case of Worldwide Cargo Movers (supra) [2006-TIOL-424-HC-MUM-CUS], the Bombay High Court apart from upholding the principle of liability of the CHA for the act of its employees went on to observe as und .....

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n resorted to after a due enquiry. We are conscious that the punishment has to be commensurate with the misconduct and that by revocation the respondent and its employees are going to suffer. At the same time, we cannot forget that though it is the right of a citizen to carry on his business or profession, it is subject to reasonable restrictions and conditions. In the present case, those conditions were already stipulated. In the case of Arvind Bhagat (supra), the order of Madras High Court has .....

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gave a fake name of his brother as an importer for undervaluing the imported car. Thus, the employee of the CHA was party to the Firm. The CHA has not disowned him and has, in fact, defended him in the reply filed by him before the appellant. That being so, he is clearly responsible vicariously, (emphasis added). 28. In our view, the Tribunal has committed a grave error in interfering with the decision of a domestic authority. In a departmental proceeding one has to see whether the principles o .....

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he takes a decision necessary for that purpose, the Tribunal is not expected to interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or his employees. The decision is best to be left to the disciplinary authority save in exceptional cases where it is shockingly disproportionate or mala fide. That is not the case here, (emphasis added). 29. In the circumstances, we allow Customs Appeal No. 37 of 2006 filed by the appellant-Commissioner of Customs since the .....

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