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D.V.R. Freight Forwarders Pvt. Ltd. Versus Commissioner of Customs (Imports) , Chennai

2015 (12) TMI 999 - CESTAT 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 of these firms were lent to persons to import the goods who in turn misdeclare .....

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nvestigation 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 appellant leading to evasion of ADD can be taken as ground for taking any action und .....

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cal 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 appellant is a holder of Custom House Broker Licence issued under the provisions .....

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uently, 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. 15.7.2015 in W.P. No.28921/2014 dismissed the writ petition on the ground that appella .....

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eriod 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 origin so as to evade anti-dumping duty. He submits that DRI has investigated the .....

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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 judgement of High Court dt. 15.9.2014 in W.P. No.21941/2014 in the case of Bharat .....

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e 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 the Tribunal's order in the case of Atul D. Sopnal Vs CC Mumbai 2012 (275 .....

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ion 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) relates to the period prior to the amendment of FT Policy w.e.f 16.9.2013. FT Pol .....

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rt. 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 respect of seven IEC holders i.e. including Jeyam Impex and 7 others who file .....

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der, 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 issuance of SCN under Customs Act where the charges are brought out only, then .....

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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 same. There are also enough measures and which can be initiated so as to preve .....

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t 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 enabling clearance of the Vessel and giving security for payment of duty has been .....

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bition 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 thereafter revoked the licence without waiting for issue of SCN under the Custo .....

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rt 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 regard, the Hon'ble Madras High Court in the case of Bharat Marine Co. Vs CC .....

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iry, 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 to operate, it would be detrimental to the interest of revenue. 6. In the ligh .....

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