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2015 (4) TMI 1052 - CESTAT MUMBAI

2015 (4) TMI 1052 - CESTAT MUMBAI - 2015 (324) E.L.T. 744 (Tri. - Mumbai) - Revocation of the Customs House Agent (CHA) License of the appellant - forfeiture of the entire amount of security deposit. - The presenting officer cross-examined the persons concerned. On completion of cross-examination and inquiry, he came to the conclusion that Violation of Regulations 13(a), 13(e) and 13(o) is not recommended as proved. Further, the enquiry officer dropped all charges as not proved. However the Comm .....

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mpt to smuggle prohibited goods. - the appellant CHA certainly did not exercise due diligence to impart correct information to the real exporter with reference to the clearance of goods and therefore, the appellant are guilty of Violation of Regulation 13(e).

The appellant is guilty of violating the CHALR Regulations. However we also hold the view that the appellant cannot be disabled permanently for the violations as that would deprive him of his source of livelihood as well as depri .....

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Final Order No. A/921/2015-WZB/CB - Dated:- 21-4-2015 - Shri Anil Choudhary, Member (J) and P.S. Pruthi, Member (T) Shri S.N. Kantawala, Advocate, for the Appellant. Shri M.S. Reddy, Deputy Commissioner (AR), for the Respondent. ORDER [Order per : P.S. Pruthi, Member (T)]. - This appeal is directed against the impugned order passed by Commissioner of Customs, Mumbai on 14-3-2014 revoking the Customs House Agent (CHA) License of the appellant and also ordering forfeiture of the entire amount of s .....

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. On 25-8-2010, unsealed containers on a trailer with the export goods were carted into the CFS. When the goods were de stuffed for examination, some of the goods were found to be non-basmati rice (prohibited goods) concealed behind the bags of dal husk. It was claimed by the appellant that on being informed by his employee Shri Ramdas Gadge about this incident, the Director Sohel Kazani informed the CFS and Commissioner of Customs on the next morning about the incident, investigations were unde .....

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lations 13(a), 13(d), 13(e), 13(n) and 13(o). During the enquiry proceedings, the presenting officer cross-examined the persons concerned. On completion of cross-examination and inquiry, he came to the conclusion that Violation of Regulations 13(a), 13(e) and 13(o) is not recommended as proved. Further, the enquiry officer dropped all charges as not proved. However the Commissioner of Customs disagreed with the enquiry report and issued a disagreement memo dated 3-2-2014. After following princip .....

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s which was detected on opening of the container for examination, was brought to the notice of Customs by Shri Sohel Director which is evident from the mobile phone records of the Director. Further that the culprit Mr. Anand Kursija who was arrested has nowhere implicated the appellant in his statement recorded by the Customs. Regarding the alleged violation of CHALR regulations, he submitted that they had accepted the authorisation from the exporter and the IEC code of the exporter was verified .....

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hich requires the CHA to exercise due diligence to ascertain the correctness of any information which he imparts to a client, the learned Counsel contended that had it been the intention of the appellant to help the exporter to export the prohibited goods, they would not have asked for the examination of the goods on their own. Rather they helped the department to get hold of the exporter who had concealed the prohibited goods. On the violation of Regulation 13(o) which requires verification of .....

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nquiry does not show that any specific Customs officer was asked to expedite the let export order. On the finding that the appellant is a habitual offender having been penalised vide order dated 19-2-2013 issued by the Commissioner of Customs, it was submitted that Hon ble Tribunal vide order numbers S/730-732/2013/CSTB/C-I, dated 6-5-2013 has granted stay. 5. The learned AR appearing on behalf of Revenue reiterated the findings of the Commissioner. On the contention of the learned Counsel .....

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iry report. 6. We have considered the rival contentions. We find that the appellant has taken the plea that he had no prior knowledge of the forgery of authorization and also no prior knowledge of the identity of the person who pretended to be the authorized representative of M/s. Crescent Trading and Impex Co. who came with Mr. Anand in February, 2010. But there is no evidence on record to show that the appellant was sure of the true credentials of Mr. Anand. It appears from the statement .....

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and signed as authorized signatory of the exporter on the authorization. Further, the IEC holder Shri Nadel Khan denied signing the subject shipping bill or authorizing any one to sign on his behalf or to give an authorization on his behalf. Both Shri Nadel Khan and Shri Sohel denied knowing each other. Therefore, the appellant has violated Regulation 13(a) for not taking any precaution whatsoever to obtain an authorization himself from the exporter and not checking the credentials of the perso .....

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relating to Regulation 13(d) which requires that the CHA should advise his client about the provisions of the Customs Act, we find that as the CHA did not know the credentials of the person who pretended to be a representative of the exporter nor did he verify personally from Shri Nadel Khan about the identity of Shri Anand, he obviously could not have given any advice to the exporter. Neither can it be said that the appellant made a genuine effort to find out the real exporter to whom advice c .....

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satisfied about the innocence of the CHA and therefore, it was mentioned in the said letter that if he fails to bring the exporter before the investigating officer a serious view against the CHA would be taken . We find that this is only a preliminary finding of the Commissioner pending the detailed inquiry under Regulation 20. The question is not whether the appellant was misguided by Shri Anand who had no locus standi in the export. The real point is that the appellant did not even verify his .....

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under the Customs Act. 6.2 The appellant have also been charged for violating Regulation 13(e) which requires them to exercise due diligence and ascertain the correctness of information which they impart to their client with reference to the clearance of Cargo. The appellant got the goods carted into the CFS in containers. The goods were contained in bags which did not bear marks and numbers. The appellant failed to ensure that the goods should have been carted in bags and not in the contai .....

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ector had also admitted that Mr. Anand had liasioned with him in the name of the exporting firm. In these circumstances the appellant CHA certainly did not exercise due diligence to impart correct information to the real exporter with reference to the clearance of goods and therefore, the appellant are guilty of Violation of Regulation 13(e). 6.3 Regulation 13(o) requires a CHA to discharge his duties with utmost speed and efficiency. We find this provision deals with the performance of the .....

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rd with the IEC number of an exporter. Obviously any one can get hold of an exporter s name and IEC number, forge authorizations of the exporter and then present the papers to a CHA for Customs clearance. The CHA cannot be exonerated of the serious mistake committed by him in not making true efforts to verify the credentials of the exporter. The CHA could have simply lifted the telephone and made an effort to speak to the exporter. The violation of Regulation 13(n) is certainly proved. 7. I .....

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brought to our notice that in another case of duty evasion, the Director of the appellant-CHA was penalized under Section 112(a) and Section 114AA of the Customs Act, vide Order-in-Original No. 20/2013/CAC/CC(I)/AB, dated 19-2-2013 issued by Commissioner of Customs. The ld. Counsel informed us that the importer in that case paid duty and settled the matter in the Settlement Commission and the order against the appellant has been stayed by CESTAT. However we have come to our decision on the basi .....

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9(8) of the CHALR (not advising their clients correctly, not exercising due diligence, not ensuring that correct documents and information are given, not discharging their duties in accordance with law and vicarious responsibility of CHA for all acts or omissions of their employees. The revocation of CHA License by the Commissioner was set aside by Hon ble CESTAT. However the Hon ble High Court set aside the decision of CESTAT and upheld the Commissioner s order stating that In a departmental pr .....

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and for the discipline to be maintained over there. If he takes a decision necessary for that purpose, the Tribunal is not expected to interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or its employees . In this case, the CHA has failed completely in discharging their obligations as mentioned above . Reliance is also placed on the Hon ble Madras High Court decision in the case of Sri Kamakshi Agency v. Commissioner of Customs, Madras - 2001 (129) E.L.T. .....

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r reaching consequences in the transaction of business by the Custom House officials. Therefore, when the applicant who had thirty years of experience as Custom House Agent, when he paved the way for his Power of Attorney to indulge in serious malpractices which ultimately resulted in loss of revenue to the Customs House to the extent of more than 80 lakhs, there is every justification in the respondents in treating the action of the applicant as detrimental to the interest of the nation and pas .....

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Authorities was violated, or irretrievably loss of future operation of license……. …… knowledge/mens rea, gravity of the infraction, the stringency of the penalty, the fact that the appellant has already been unable to work his license for a period of 8 years…. . In the present case we find that the CHA could not be unaware of misuse of his license because he did not verify the exporter whose IEC No. was being used. And the license has been revoked only one year .....

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t of its livelihood. Therefore, the High Court set aside the order of prohibition. Here too, the facts do not apply to the present case. (c) The case of Jai Ambe Logistics Tribunal Order No. A/1750/2014/ CSTB/C-I, dated 19-11-2014 [2015 (327) E.L.T. 730 (Tri. - Mumbai)] does not apply as it dealt with a case of sub-letting and the Tribunal held that procurement of business through an intermediary who is not an employee does not amount to sub-letting of CHA License. (d) We do not agree with the r .....

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