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2015 (12) TMI 999 - CESTAT CHENNAI

2015 (12) TMI 999 - CESTAT CHENNAI - 2016 (335) E.L.T. 138 (Tri. - Chennai) - Suspension of CHA license - Misdeclaration of country of origin - Held that:- Suspension of CHA licence and revocation of licence originated on account of investigations initiated by DRI based on the intelligence on the alleged import of PVC flex banners in respect of seven IEC holders i.e. including Jeyam Impex and 7 others who filed various Bills of Entries for import of PVC flex banners. It is alleged that IE codes .....

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e not IEC holders and also failed to verify KYC norms. - Even though the investigation was completed in the year Nov 2013, till date no proceedings initiated nor any SCN issued to importers and other persons for the alleged misdeclaration of goods for evasion of anti-dumping duty. Only after issuance of SCN under Customs Act where the charges are brought out only, then authority can allege whether IE code belongs to another person and who is actual importer etc. and the role played by appell .....

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15 - FINAL ORDER No.41677/2015 - Dated:- 7-12-2015 - Shri R. Periasami, Technical Member and Shri P.K. Choudhary, Judicial Member For the Petitioner : Shri Hari Radhakrishnan, Advocate For the Respondent : Shri Kailash Chandra Jena, ADC (AR) ORDER Per R. Periasami Pursuant to Hon'ble Madras High Court's order dt. 26.8.2015, the appeal is taken up for hearing. 2. The present appeal is filed by appellant-CHA against the impugned order dt. 20.10.2014. The brief facts of the case are that ap .....

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on 18.11.2013. The suspension was continued vide order dt. 12.12.2013. Subsequently, a SCN dt. 12.12.2013 was issued under Regulation 20 of CHALR for revocation of licence. The adjudicating authority after following the principles of natural justice in his impugned order revoked the licence and also forfeited the full amount of security deposit. Against this order, appellant preferred a writ petition before the Hon'ble Madras High Court and the Hon'ble Single Judge by order dt. 15.7.201 .....

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;ble High Court also directed the Tribunal to dispose of the appeal within a period of four months. Hence the present appeal filed by appellant before Tribunal. The appeal was heard on 9.10.2015, 4.11.2015 and finally today (7.12.2015). 3. The learned advocate appearing for the appellant submits that appellant's licence was suspended in the year 2013 on the ground of lending of Importer-Exporter Code (IE Code) to the importers for import of PVC flex banners by misdeclaring the country of ori .....

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mits that Inquiry Officer dropped the proceedings and the Commissioner has not agreed with the findings of the Inquiry Officer and held that charges proved. He further submits that SCN is pre-mediated and the allegation in para-9 of SCN itself is a finding at the notice stage itself. He also referred to para-13 of the SCN. He submits that SCN is liable to be set aside on this count as the department has already made up their mind and given a finding in the SCN itself. He relied an unreported jud .....

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ttention to Regulation 11(d) and says that said regulation stipulates to advice the client to comply with provisions of the "Act". "Act" means only "Customs Act" whereas the lending of IE code does not fall within the ambit of Customs Act but is only falling under the Foreign Trade (Development and Regulation) Act, 1992. In support of his contention, he relied the High Court's order in the case of Hamid Fahim Ansari Vs CC Nhavasheva 2009 (241) ELT 168 (Bom.) and .....

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nitiated for contravention under the Customs Act against any importer, revocation of licence of CHA is pre-mature. He also submits that till date, no SCN has been issued to any of the importers for demanding anti-dumping duty. 5. On the other hand, Ld. A.R for Revenue reiterates the findings of the impugned order and submits that initiating action against CHA is an independent action of CHALR and submits that Hon'ble Bombay High Court order in the case of Hamid Fahim Ansari Vs CC (supra) rel .....

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ot be bound by the IO report and has powers to accept or overrule the I.O report. Therefore, he rightly revoked the licence for contravention of Regulation 11(a) & (d). 6. We have carefully considered the submissions of both sides and the direction of the Hon'ble High Court order dt. 26.8.2015. We find that the suspension of CHA licence and revocation of licence originated on account of investigations initiated by DRI based on the intelligence on the alleged import of PVC flex banners in .....

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tinued vide another order dt. 12.12.2013. On perusal of the findings in the order, we find that the appellant failed to inform the department of filing of IE code who are not IEC holders and also failed to verify KYC norms. 7. On merits of the case, we find that even though the investigation was completed in the year Nov 2013, till date no proceedings initiated nor any SCN issued to importers and other persons for the alleged misdeclaration of goods for evasion of anti-dumping duty. Only after i .....

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mbay High Court in the case of GAC Shipping (India) Pvt. Ltd. Vs UOI in their order dt. 25.6.2014 in W.P. No.1376 of 2014 the Hon'ble High Court held that when no proceedings are initiated under Customs Act there is no justification for initiating action under CHALR. The relevant para of the High Court order is reproduced as under :- "11. There are enough provisions in the Customs Act enabling the Commissioner to take care of evasion of duty and dealing with persons responsible for the .....

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the case or stand of the importer/client. From time to time the importer/client has succeeded in protecting its rights, namely, of import and the grant of Essentiality Certificate. The petitioner can be proceeded against together with the importer under independent powers conferred in the Commissioner by the Customs Act, 1962, and that is not disputed. That a show cause notice against the importer/client is issued and is pending adjudication, is further not disputed. That provisional orders enab .....

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of proceedings in the year 2014 against the petitioner and that too for prohibition from operation or working at the Mumbai Customs Station." The ratio of the above decision squarely applies to this case, as in the present case the imports were made in the year 2011-12 and the DRI initiated investigation and without issue of SCN or adjudication proceedings initiated against the appellant under Customs Act for the very same violations and the appellant's licence has been suspended and t .....

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djudicating authority cannot proceed merely on the basis of investigation report received from the DRI for suspension of licence. We find that first investigation report is only for initiating action against CHA. 9. We also find that SCN issued to the appellant for revocation of licence is already concluded the charges and findings in the SCN itself. In this regard, SCN itself has already given what is the finding and what is the decision of the authority. SCN itself is pre-mediated. In this reg .....

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lating to investigation conducted, the evidence recorded in the course of enquiry, etc. 4. But, thereafter, in paragraph 9, the first respondent has recorded a series of findings. These findings, are very categorical in nature, without leaving any, scope for the petitioner to explain. 5. Even in paragraph 14 of the impugned show cause notice, the first respondent has asserted that a clear prima facie case has been made out against the petitioner and that if the petitioner is allowed to continue .....

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