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2015 (12) TMI 1203 - MADHYA PRADESH HIGH COURT

2015 (12) TMI 1203 - MADHYA PRADESH HIGH COURT - TMI - Violation of Regulation 13 (O) of Custom House Agents Licensing Regulations, 2004 - petitioner failed to produce the exporter as per terms of Regulation 13 (o) of CHALR, 2004 - petitioner presented goods for export on behalf of fictitious/bogus exporter whom he cannot produce before the Customs Department though sufficient time was given for same time and again - Held that:- It is a case of clear violation of Clause 6 of Regulation No.13 of .....

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said that powers under Regulation 21 could not be exercised. - Decided against Appellant. - W.P. No.6109/2015 - Dated:- 14-12-2015 - P.K. JAISWAL AND J.K. JAIN, JJ. For The Petitoner : Shri Subodh Abhyankar, learned counsel For The Respondent : Shri A.S. Parihar, learned counsel They are heard. 2. Brief facts of the case are that the petitioner is holder of regular Custom House Agent (for short 'CHA') license No.11/356 issued by Mumbai Commissionerate and granted permission to transact C .....

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n No.RJ-27-GA-0988, was unloaded at the warehouse and the same are still lying there only. 3. On 15.9.2012, the petitioner approached the Superintendent, Customs, ICD Kheda seeking back to town permission of the said consignment of green marble reasoning that the export order had been cancelled by the overseas buyer. It is alleged that the back to town permission was sought when the authenticity of the exporter was enquired into by the Departmental Authorities. Inspite of request to produce the .....

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or short 'CHALR, 2004'). In view of this, the Commissioner, Customs and Central Excise, Indore, exercising its power conferred under Regulation 21 of CHALR, 2004 prohibited the petitioner-firm from transacting any CHA related business in Indore Commissionerate vide order dated 10.4.2013 with immediate effect and also forwarded the case to Mumbai Commissionerate from where the original CHA license was granted for further action in terms of Regulation 20 and 22 of CHALR, 2004 read-with ins .....

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of this Court has quashed the order passed by Commissioner and directed the petitioner to file a detailed representation before the Commissioner and it has also been directed that on receipt of such representation, the Commissioner should pass a reasoned order by following the principles of natural justice. In pursuance to the order passed by this court on 25.6.2014, the petitioner had filed the representation. The basic charge and allegation is that the authorized signatory of CHA could not pro .....

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authority found that the petitioner again failed to produce the exporter as per terms of Regulation 13 (o) of CHALR, 2004. It is also held that he presented goods for export on behalf of fictitious/bogus exporter whom he cannot produce before the Customs Department though sufficient time was given for same time and again. The authority held that it is clear cut and deliberate violation of Regulation 13 (o) of CHALR, 2004 and prohibited the petitioner from transacting any business in any of the .....

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KYC norms cast an even greater responsibility on the CHAs to ensure and re-ensure the genuineness of their prospective clients before they take up the documents for filing before the Customs authorities. I find it essential to reproduce provisions of Regulation 13, which deals with the obligations of CHA: 13. Obligations of a Customs House Agent-A Customs House Agent shall (a)................... (b).................. (c)................... …..................... …................. .....

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client at the declared address.....'. It is thus clear in unambiguous terms that the CHA's obligations do not stop merely after verifying genuineness of KYC documents submitted by the client but the CHA has to ensure that the said client is actually functioning from the declared address. I find that in the instant case the CHA, by his own admission, had not verified the credentials of M/s D. K. Export Physically. Though the CHA in his written submission has tried to trivialize this failu .....

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'by using reliable, independent, authentic documents, data or information'. I do not find any force in submission of the CHA. For that matter I find that the citation of Privy Council's decision in case of Nazir Ahmed Vs. Emperor on 16th June 1936, adduced by the CHA in their written submission makes the things even more clear. The said decision enunciates the principle that 'if a particular thing is required to be done in a particular manner. Then that thing must be done in that .....

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ing and presenting the export documents in the instant case, cast his role under serious suspicion. The CHA has acted in a most casual and lackadaisical manner and presented the goods for export before the customs officers on behalf of a fictitious and bogus client, thus violating the obligations placed upon the CHA in terms of Regulation 13 of the CHALR 2004. I, therefore, do not find any reason to show any leniency towards the CHA, as far as the facts and circumstances of the case are concerne .....

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der any other law for the time being in force for the present or any other past violations committed by them. 5. Learned counsel for the petitioner has drawn our attention to Regulation 21 of CHALR, 2004 and clause 6 of Circular No.9/10, Customs dated 8.4.2010 and submitted that necessary directions and circulars issued by the authorities have been applied by the petitioner, the learned authority committed an error in prohibiting the petitioner from transaction of any business in any customs por .....

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itted before the Department as per report of the above authority send to the Indore office of the respondent vide letter dated 14.3.2013. In respect of circular No.09/10 of the Central Board of Excise and Customs, he submits that the order passed by the adjudicating authority after considering all the facts, carefully examination of CHALR, 2004 and the aforesaid circular. He submitted that petitioner has presented goods for exporter on behalf of fictitious/bogus exporter M/s. D.K. Exports whom t .....

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e submits that the action taken against the petitioner is without record to fact that he presented goods for export on behalf of a fictitious/bogus exporter who he cannot produce before the Customs Department though sufficient time was given for same time and again and due to the aforesaid reasons, impugned order has been passed by the Commissioner and no case to interfere with the aforesaid impugned order as prayed is made out and prays for dismissal of the writ petition. 7. The sole contention .....

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. Ratan Melting and Wire Industries reported as AIR 2008 SC (Supp) 666, the Apex Court held that when the Supreme Court or High Court declares the law on a question that will be binding on the department, and if a circular is issued which is not in conformity or contrary to the law laid down by the Apex Court or High Court, the decision of the Court shall be binding on the department. 9. In the case of Bharat Heavy Electricals Ltd. (supra), the show cause notice was issued by an unauthorized per .....

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ers of the Excise Department and only on the ground that the circular is not issued. 10. Learned counsel for the petitioner has drawn our attention to para 32 of the judgment of Division Bench of Rajasthan High Court in the case of Pinkcity Logistics Ltd v/s. Commissioner of Customs reported as 2015 (320) E.L.T. 241 (Raj) and submitted that Regulation 21 has been framed separately, giving the power to the Commissioner to prohibit any CHA of working in any section or sections of the Customs Stati .....

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context of increasing number of offences involving various modus-operandi such as misuse of export promotion schemes, fraudulent availment of export incentives and duty evasion by bogus IEC holder etc., it has been decided by the Board to put in place the Know Your Customer (KYC) guidelines for CHA's so that they are not used intentionally or unintentionally by importers / exporters who indulge in fraudulent activities. Accordingly, Regulation 13 of CHALR, 2004, has been suitably amended to .....

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