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M/s. Sainath Clearing Agency. Versus The Commissioner of Customs (General) And Vice-Versa

2015 (12) TMI 1146 - BOMBAY HIGH COURT

Suspension of CHA licence - Rule of consistency - violations of various conditions by the CHA - Held that:- In the affidavit in reply it has been asserted that a look at the charges against “S.P. Pawar & Sons” would show that similar are the violations alleged to have been committed by the present respondents. Hence, a different treatment is not warranted. We are of the opinion that the case of “S.P. Pawar & Sons" and the present appellant is more or less identical. Though a larger issue of disc .....

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in matters of this nature and equally while imposing penalty. That should not be lightly interfered with. However, that does not mean that once the orders of the Authorities like Commissioner are capable of being challenged in further appeal, then, the Appellate Tribunal's powers are in any way restricted or circumscribed. In order to render substantial justice and if the Tribunal feels that there is a certain period which has gone by during which the agent has been out of business, then, that .....

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from 20th December, 2007 till 3rd March,2011 and forfeiture of entire security deposit - Decided in favour of appellant. - CUSTOMS APPEAL NO.47 OF 2011 AND WRIT PETITION NO.2320 OF 2014 - Dated:- 22-7-2015 - S.C. DHARMADHIKARI & G.S. KULKARNI, JJ. For the Petitioner : Mr. Pradeep S. Jetly For the Respondent : Mr. H.R. Shetty ORDER P.C. : 1. In the light of the order that we propose to pass on the Customs Appeal, the Writ Petition would not survive inasmuch as thereafter the parties have to .....

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estions of law. 4. In his submission, the Customs House Agent Licence No.11/1030 was granted to the respondent under Regulation 10(1) of the Customs House Agents Licensing Regulations, 1984. The Directorate of Revenue had investigated the case of misuse of advance licence scheme by one Anthony D'Souza in the name of his two proprietory firms M/s.Tony Enterprises and M/s.Ventura Alloys and Electrics (India). The investigation revealed involvement of the respondent and that is how a notice to .....

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preferred before the CESTAT and on 24.6.2005 that appeal was allowed. The order of CESTAT was accepted by the Commissioner of Customs and the licence became operative. That was with effect from 12.8.2005. Later on the inquiry concluded and the Inquiry Officer submitted his report on 30.5.2007 wherein he held that Articles of Charge I, II and IV are not proved and Article of Charge III is proved. The Commissioner disagreed with these findings in the Inquiry Report and, therefore, a disagreement .....

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lowed erroneously. The punishment of revocation of the licence should not have been interfered with. The Inquiry Officer has exonerated the respondent but the Regulations permit the Commissioner to express his disagreement with these findings in the Inquiry report. Being a Disciplinary Authority, the Commissioner could have disagreed with this report and that is how the disagreement was expressed. When a complete compliance has been made with the principles of natural justice and the charges are .....

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pondent. The document was produced as afterthought. As far as Charge No.III is concerned, it is apparent that the respondent was found aiding and abetting the importer. The imported goods have been diverted to the domestic and that is how the charge was came to be proved. Mr. Jetly would submit that equally Charge No. IV is serious. If a third party is allowed to operate the licence on commission, then, this is clear violation of the Regulations. Mr. Jetly's emphasis is on the relationship b .....

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appeal. The appeal has been admitted only on the reframed substantial question of law and that is whether on the facts and in the circumstances of the case and in law, the CESTAT is justified in setting aside the order revoking the agent's Customs House Agents Licence even after holding two charges levied against the Agent were proved and Regulations 13(a) and 13(k) of the Regulations have been violated. In that regard Mr.Shetty would submits that the Department or the Revenue cannot indulge .....

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. Therefore, if there is failure to comply with them, then, the penalty should not be revocation of the licence but as held in their cases the forfeiture of security deposit was enough. Precisely, that has been done by the Tribunal in the present case. Therefore, the appeal deserves to be dismissed. 9. With the assistance of both the learned Counsel, we have perused this Appeal, paper book and all the annexures thereto including the impugned order. A show cause notice was issued under Section 28 .....

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revealed during the same is then set out. The statements have been recorded of all the concerned persons. As far as the respondent is concerned, what is alleged is that the statement of Mr.Dinesh Prataprao Mehta, Proprietor of Sainath Clearing Agency under whose licence the consignment of Audio and Video Cassettes of Tony Enterprises were cleared, revealed that there were only xerox copies and that violations thereafter have been set out including the employees of the respondent procuring orders .....

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against selling or otherwise transferring the licence. In that regard, a statement of Mr.Dinesh P. Mehta has been referred and that revealed that import clearance was made under the licence of M/s.Sainath Clearing Agency by one Mr.Dilip Shah and who was paid 40% agency charges as commission. As far as Article of Charge II is concerned, what has been alleged is that violation of Regulation 13(a) is revealed. That is that the Customs House Agent shall obtain authorization from each of the compani .....

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is thereof is that if there is non compliance with the provisions of the Customs Act, it is the duty and obligation of the Agent to bring the matters to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs. But the violations of the terms and conditions of the advance licence and scheme in that behalf by M/s.Tony Enterprises were not brought to the notice of the Competent / Proper Officer and this also is a gross and serious violation of the Regulations. 11. As f .....

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, these are violations which have been proved and from the statement of Mr. Dilip Shah itself. As far as the second charge is concerned, that is also held to be proved because Mr.Dinesh Mehta was unable to give any details pertaining to M/s.Tony Enterprises. He never dealt with this party. Once he has surrendered the licence or allowed a third party to operate it, then, the authorization has never been produced by the Agent. This charge was also to be held to be proved. Equally, non informing th .....

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d as his employees. They are not paid any regular monthly salary. They were holding Customs House Pass on behalf of the agent and, therefore, must be considered as the employees of the Agent. This was the finding of the Tribunal at the stage of interfering with the order of suspension. Apart therefrom the Inquiry officer referred to this statement and when there was an admission that these are the employees of the Customs House Agent and that is how they were permitted to used the licence only f .....

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and that the signature on the bill of entry is the practice prevailing. Relying on the case of P. P. Dutta Vs. Commissioner of Customs, New Delhi, (2001(136) ELT 1042) , it was urged that the statement of Mr.Dinesh Mehta will not enough to render a conclusive opinion. Mr.Mehta's statement is that he did not personally deal with any person from M/s.Tony Enterprises and that the business was procured and handled exclusively by his employees. Mr.Dilip Shah and Mr.Shantaram Dongre once again co .....

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h as Import General Manifest, Invoice, Packing List etc. to his Customs House Agent with a covering letter wherein the agent was authorised to file bill of entry and attend all other requirements for clearance of the goods and also the particulars of the import documents. No such authorization was produced and, therefore, ChargeII was held to be proved by the Tribunal. 14. As far as Charge III is concerned, the transportation of the goods diverted by the importer is a matter of post importation. .....

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as not enough to hold that it is the Customs House Agent's obligations under the Regulations and which have been discharged through the employee. In the circumstances, the act of Mr.Shantaram Dongre should not visit the Customs House Agent with an adverse consequence is the conclusion reached. 15. Thereafter, non maintenance of the records and accounts in the prescribed manner and not offering them for inspection of Deputy Commissioner of Customs or Assistant Commissioner of Customs or any o .....

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wo charges which have been proved are not enough to stop the licence from running through its validity period or prohibiting the Agent from continuing the work in terms of the licence. This is not a case where the Customs House Agent who has suffered revocation of licence for three years, is not a enough punishment. The forfeiture of the security deposit can be sustained and the Tribunal held that the Customs House Agent Licence which has been revoked for three years is enough penalty in peculia .....

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s revoked and he could not, therefore, carry on any business. Consequently, from 3.3.2011 till date and despite repeated requests, the licence of the respondent has not been restored. He was, therefore, required to file the Writ Petition. 18. To our mind, the respondent, therefore, has suffered enough punishment and is visited with the sufficient penalties. In the case of two others and who are similarly situated, what the Tribunal found is that all the charges cannot be held to be proved. In th .....

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d maintaining the revocation for that period, the licence can be restored. Our attention has also been invited to the order passed in the case of Commissioner of Customs (General), Mumbai Vs. M.D.Shipping Agency, (2014(299) ELT 257 (Bom.)) . In the case of M.D.Shipping the Division Bench of this Court has not interfered with the Tribunal's order, by dismissing the Revenue's appeal. The Revenue had come in the appeal against the order passed on 31.5.2012 by the CESTAT. The CESTAT had take .....

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the Tribunal is perverse and arbitrary as the clerk working for the respondent CHA in his statement stated that he accompanied the consignment of zinc ingots when it was moved from the dock to the address of M/s.South Goods Carriers, Sant Tukaram Road, Mumbai as directed by importer. On enquiry, no such office of M/s.South Goods Carrier was found. Mr.Jetly placed reliance upon the statement of clerk of the respondent CHA as recorded in the Enquiry Officer's report as well as the order of th .....

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and handed over by the CHA to his client, obligation of the CHA to CHALR comes to an end. It is not the obligation of the CHA to assume that post the clearance of imported goods it would not be taken to the address given in the Advance licence. Moreover, in this particular case, imported zinc ingots had on clearance from the Customs Department taken to the office of the transporter. In these circumstances, there could be no occasion for the CHA to suspect that the imported zinc ingots were not b .....

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ld not by itself resulted in noncompliance of the Customs Act. 9. In this view of the matter, we do not see any reason to entertain question (b) as it is self evident from the facts found by the Tribunal that there was no occasion to advice the importer as there was no reason to suspect that the importer would not comply with the advance licence issued to him. 19. As fas as the case of Shri.Venkatesh Shipping Services Pvt.Ltd. Vs. Union of India, (2013(287) E.L.T. 266( Bom.)) is concerned, this .....

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that post clearance, the party would commit breach of the provisions of the Act, Rules and regulations. However, what we find is that in matters of such nature, the Division Bench found that the penalty is something which could be depending upon the facts and circumstances of each case, the seriousness of violation committed and the role which is attributed to the agent. In a given case even if the charges are held to be proved, if the gravity and seriousness thereof does not require or warrant .....

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security deposit. In this order, the Tribunal referred to its own orders and passed in the cases which are similar. The Tribunal's order is reported in (2013(294) ELT 472(Tri.Mumbai) . Paragraphs 10, 11 and 12 thereof are relevant, they read as under: 10. Further, we find that the enquiry officer has held in his enquiry report that charges against the appellant are 'not proved'. In the case Standard Shipping Agency, wherein also the enquiry officer held that the charges have 'no .....

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ven by the importers for the bills of entry. I do not agree with the observations of the inquiry officer in this regard. I find that the inquiry officer in his inquiry report has rightly held that the CHA has accepted the documents through intermediaries i.e. Shri.Jatin M.Shah and Shri. Kaushal A. Shah and hence, they have not met the actual importers. The CHA's contention that it is regular business practice to accept business through middlemen, brokers and commission agents may be good for .....

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revious many years, still there is no exemption from obtaining authorisation from importer. Nor is the case that CHA has produced even one authorisation from any of the importer even for previous consignment. Declaration on bill of entry cannot and should not substitute authorisation from importer to CHA to handle his work in Custom Houses. Hence, I am of the opinion that the CHA has violated Reg.13(a) of CHALR 2004. And thereafter he passed the following order: In exercise of the powers conferr .....

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Inquiry Officer has held that charges not proved but the Commissioner of Customs (General) has observed that the charges has been proved and thereafter he ordered for making operative of the CHA licence after forfeiture of the security deposit. It is a discrimination with the appellant in this case and, therefore, relying on the decision of P.P.Dutta (Supra) and S.S.Clearing & Forwarding Agency Pvt.Ltd. (supra) and in the case of Standard Shipping Agency, we observe that the punishments suf .....

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e the licence of the CHA on forfeiture of security deposit of ₹ 10,000/. 12. In view of this observations, we hold that when on similar charge in the case of Standard Shipping Agency wherein the enquiry officer held that charge is 'not proved' and Commissioner of Customs (Gen.) considering the report and thereafter, gave a finding that charges are proved and withdrew the order of suspension of CHA licence and made operative the CHA licence on forfeiture of security deposit. The app .....

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ed against the S. P. Pawar and Sons were identical. That was with regard to allowing one Mr. Ramdas Dhormale to act as authorized signatory without informing the department. Though the violation is termed as serious, the Tribunal held that revocation of licence is not a penalty which is warranted. Equally, transport after delivery arranged by the importer himself cannot lead to the finding that there is aiding and abetting in diversion of goods. This order in the case of S.P. Pawar & Sons (s .....

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spondents. Hence, a different treatment is not warranted. We are of the opinion that the case of S.P. Pawar & Sons" and the present appellant is more or less identical. Though a larger issue of discrimination in the matter of punishment need not be gone into, what we find is that the consistent view of the Tribunal in such cases and in similar circumstances was not found to be perverse or vitiated by any serious error of law apparent on the face of the record. 22. This Court has consist .....

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