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M/s. Shuvam Enterprise Versus Commissioner of Customs (Airport & Admn.) , Kolkata

2015 (12) TMI 587 - CESTAT KOLKATA

Suspension of CHA License - whether appellant has violated the provisions of Regulations 13 (a), 13 (b), 13 (d) & 13 (o) of the CHALR 2004 inviting revocation of their CHA License - Held that:- No effort was made by the appellant to check up with the exporter or the freight forwarder whether Shri Sanjoy Singh is their assigned representatives for carrying out the transit of their containers from LCS Jogbani to Dock Kolkata. Regulation 13 (o) of CHALR 2004 clearly provides that CHA, interalia, sh .....

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e handed over to the CHA. It is also observed that Shri Dilip Kumar Sharma, Jetty Sircar of the appellant was deputed to attend to the examination of the container when DRI was carrying out the investigation. - CHA was out of business for 8 years but Hon’ble Court while deciding clearly observed that trust between the CHA and the Customs authorities has to be viewed seriously. It was also held that punishment has to be proportionate to the nature and extent of violation. Based on the existi .....

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the considered opinion that revocation ordered by the Adjudicating authority should be for a limited period. As there is no irregularity committed by the appellant from the date of offence detected by DRI, the revocation ordered by the Adjudicating authority is made effective upto 31/3/2016 and with effect from 1/4/2016 CHA License of the appellant and forfeiture of Security deposit will be restored. - Decided in favour of Appellant. - Customs Appeal No. C/75663/2015 - ORDER NO : FO/A/75722/201 .....

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on 20 (1) of the Customs House Agents Licensing Regulation 2004 and security deposit of the appellant was also ordered to be forfeited. 2. Shri R.K. Choudhary (Advocate) and Shri B.N. Pal (Advocate) appeared on behalf of the appellant. Shri R.K. Choudhary argued that appellant had a valid CHA License under Customs House Agents Licensing Regulations 2004 (CHALR). That appellant was engaged by a Nepali Exporter for shipment of 24 MT of Mustard Oil Cake (Khali) to be consigned to Hong Kong via Sout .....

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seals was found to be tampered but the second seal of the other container was found to tally with the declared seal number mentioned in the covering document. That on examination by DRI, the containers were found to contain 19.65 MT of Red Sanders wood. That after necessary investigation appellant was alleged to have violated Regulation 13 (a), 13 (b) and 13 (c) of the CHALR 2004 (comparable to Regulation 11 (a) 11 (b), 11 (c) & 11 (n) of the CBLR 2013). That after conducting necessary inqui .....

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the seals on the containers and endorsed the CTD. That when the containers were brought to Jogbani LCS the Indian Customs checked the sealed containers and found the same to be in order and accordingly endorsed CTD for onward transit of containers to Kolkata Port. That role of the CHA was to start only by filing CTD and other related documents with Kolkata Customs. That DRI intercepted the containers on 29/11/2012 before the containers could be checked and inspected by the CHA. That DRI called .....

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the bench go through the relevant regulations and further argued that Regulation 13 (a), (b), (d) and (o) of CHALR 2004 (equivalent to Regulation 11(a), (b), (d) & (n) of CBLR 13)were not violated by the CHA & order of revokation was not proper as department did not even suspend the License of the appellant from the date of DRI interception (29/11/2012) till the license was revoked (27/2/15). That for the entire period 29/11/12 to 27/2/15 appellant was allowed to carry out his business a .....

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hri A. Kumar, A.C. (A.R.) appearing on behalf of the Revenue argued that it is evident from the statement dated 30/11/12 that 7/5/2013 of Shri Chandan Chatterjee, partner of M/s. Shubham Enterprises, that: (i) he was engaged as CHA for clearance of export of M/s. Osia Enterprises-Nepal by Sri Sanjoy Singh of M/s. Global Marine Agency-Kolkata. (ii) Smt. Bimla Parak is the proprietor of M/s. Osia Enterprises-Nepal; (iii) he or any of his authorized person never visited M/s. Osia Enterprises-Nepal .....

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) he did not obtain KYC of Sri Sanjoy Singh & M/s. Global Marine agency prior to 01.12.2012, though the export started from May, 2012; (ix) he neither verified correctness of the PAN of Sri Sanjoy Singh nor met him in person. That in view of the above there is clear violation of Regulation 13 (a), 13 (b), 13 (d) & 13 (o) of the CHALR 2004 and the appellant never checked from the exporter of goods in Nepal whether Shri Amreek Singh or Shri Sanjoy Singh were their Freight Forwarders. Learn .....

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- (a) obtain an authorization 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) advise his client to comply with the provisions of .....

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Kolkata that confirmation of Authority was given in favour of M/s. Shuvam Enterprises, Kolkata for the job of Export Challan passing based on CTD and other Customs related procedures at Kolkata. If the work assigned to the appellant was only restricted to facilitating export at Docks, Kolkata then there was no need for the appellant to depute his representative to supervise stuffing of containers in Nepal. It is also accepted by Shri Chandan Chatterjee, partner of the appellant that he was in re .....

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e CHA as an agent of M/s. Osia Enterprises and freight forwarder and thus fell into the footsteps of the exporter. No independent efforts were made by the CHA to verify whether the persons dealing with him on behalf of the exporter/freight forwarders are genuine. No confirmation over phone/Mobile was made by the appellant when documents were handed over to the CHA. It is also observed that Shri Dilip Kumar Sharma, Jetty Sircar of the appellant was deputed to attend to the examination of the cont .....

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er of my CHA firm Shri Chandan Chatterjee. Container No. IICU-5006024 was laden on vehicle No. NL-02K-9752 while container No. IICU-5005028 was laden on vehicle No. NL-05D-9568. Both loaded vehicle were parked at a place after entry in dock where DRI Officers came and asked me to show export documents. I have submitted following documents voluntarily to the DRI Officers: (i) CTD No. 356/LC-6/5/12 dt. 23.11.12 in triplicate, (ii) Commercial invoice No. OSIA/06/12-13 dt. 23.11.2012 (iii) Packing l .....

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duction of CTD & related documents is also a transaction of business which started from the time the appellant authorized Shri Dilip Kr. Sharma to look after the work. No approval of the concerned DC/AC Customs for Jetty Sarkar has been brought on record. No authorization was obtained also from Shri Amreek Singh /Shri Sanjoy Singh or M/s. Osia Enterprises that Shri Amreek Singh will be dealing with the Customs for processing of CTD which starts the moment containers left LCS Jogbani till the .....

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AT that the appellant did not have knowledge that the illegal exports were effected using the G cards given to V.K. s employees. There was no active or passive facilitation by the appellant in that sense. Undoubtedly, the provision of the G cards to non-employees itself violated the CHA Regulations. This is an admitted fact, but it is not the Revenue s argument (nor is it the reasoning adopted by the Commissioner or the CESTAT) that this violation in itself is sufficiently grave so as to justify .....

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nt to be proportional to the violation, revocation of the license under Rule 20(1) can only be justified in the presence of aggravating factors that allow the infraction to be labeled grave. It would be inadvisable, even if possible, to provide an exhaustive list of such aggravating factors, but a review of case law throws some light on this aspect. In cases where revocation of license has been upheld (i.e. the cases relied upon by the Revenue), there has been an element of active facilitation o .....

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xtent of encashing the facilities made available to him as a CHA by selling it for a price . Moreover, the Power of Attorney was - as a matter of fact - 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 by the Power of Attorn .....

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he adjudicating authority came to the conclusion that the fraud in this case has been committed in so many consignments over a long period of time and the same could not have happened without the connivance of the CHA . The revocation of the license was again informed by the fact of connivance (i.e. mens rea as to the infraction) of the CHA. In Eagle Transport (supra), the CHA transferred the license altogether. As the CESTAT noted, the activities of the appellant firm were controlled day to day .....

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did not concern any ordinary infraction of the CHA Regulations, but an act of corruption , where blank shipping bills were issued by the partner and authorized representative of the CHA for a consideration of 150 per shipping bill. 11. Viewing these cases, in the background of the proportionality doctrine, it becomes clear that the presence of an aggravating factor is important to justify the penalty of revocation. While matters of discipline lie with the Commissioner, whose best judgment should .....

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rating between a CHA and the Customs Authorities (as a matter of law, and of fact) can be said to have been violated, or be irretrievably lost for the future operation of the license. In effect, thus, the proportionality doctrine has escaped the analysis. 12. Learned Senior Standing Counsel for the Customs has stressed that the infraction in this case is not a routine matter, but rather, illegal smuggling of narcotics by the G card users. However, given the factual finding that the CHA was not a .....

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granted in January, 1996. Equally, it is important to note that the appellant has - as of today - been unable to work the license for 8 years, and thus been penalized in this manner. This is not to say that the trust operating between the Customs Authorities and the CHA is to be taken lightly, or that violations of the CHA Regulations should not be dealt with sternly. A penalty must be imposed. At the same time, the penalty must - as in any ordered system - be proportional to the violation. Jus .....

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