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Commissioner of Customs Versus M/s K.M. Ganatra & Co.

2016 (2) TMI 478 - SUPREME COURT

Jurisdiction of tribunal to exercise its discretion and grant relief to the respondents - Miss-use of the DEEC and DEPC Scheme and submitting fictitious or forged shipping bills either with a view to obtain inadmissible Duty Entitled Pass Books (DEPBs) or for fulfilling the export obligations against advance licences under Duty Exemption Entitlement Certificate (DEEC) Scheme, and to obtain waiver of BG conditions against the DEEC Licence as per the Exim Policy, though in reality no physical expo .....

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conduct reflects a chain of acts. In such a situation, we are disposed to think that the discretion exercised by the tribunal is inappropriate.

Resultantly, we allow the appeal and set aside the orders of the High Court and the tribunal and restore that of the Commissioner. - Decided in favor of Revenue. - Civil Appeal No. 2940 of 2008 - Dated:- 14-1-2016 - Dipak Misra And N. V. Ramana, JJ. For the Petitioner : Ms. V. Mohana, Sr. Adv. Mr. B.V. Niren, Adv. Ms. Binu Tamta, Adv. Mr. B. K .....

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iness, a letter was received from the Joint Director, DRI, BZU, Mumbai wherein it was mentioned that certain units based in Moradabad and Rampur area were misusing DEEC and DEPC Scheme and submitting fictitious or forged shipping bills either with a view to obtain inadmissible Duty Entitled Pass Books (DEPBs) or for fulfilling the export obligations against advance licences under Duty Exemption Entitlement Certificate (DEEC) Scheme, and to obtain waiver of BG conditions against the DEEC Licence .....

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fide exporters. The shipping bills were filed and for the said purpose, services of CHA licence of the respondent licensee was utilised. It had further come to the notice of the authorities that after due investigation and interrogation, it had allowed its licence to be used by certain unauthorised persons for monetary consideration. After the said aspect came to light, the licence was suspended under Regulation 21(2) of the 1984 Regulations and an enquiry was held against it under Regulation 23 .....

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the said enquiry report, the Commissioner of Customs (General), New Customs House Ballard Estate, Mumbai on 22.08.2006, after affording appropriate opportunity of hearing to the respondent and analysing the facts and the material brought on record, came to hold that there had been misuse of the licence issued in favour of the respondent and further the violation was serious in nature and it did tantamount to involvement in fraudulent activity affecting the revenue. Being of this view, it cancell .....

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has resulted in fraudulent exports by his client whose credentials were not lloked into by the CHA. This cannot be considered as a mere commission agent being employed by the CHA. In fact no authorization from the customer in favour of the CHA is on record and the copy produced by the appellant is without any date and there is no evidence that it was procured before taking up the business of the exporters in question. On the other hand the appellants contend that the same was recovered by the DR .....

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rence being that since in latter case the licence remained revoked for a period six years & therefore, a lenient view was taken and the licence was restored though forfeiture of security deposit was upheld. In the instant case, we find that the licence has been suspended for the last two years and has now been revoked permanently. We consider it too harsh a punishment as it deprive the CHA of his livelihood. We consider that revocation for a period of three years from the date of suspension .....

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retion by directing restoration of the licence after the expiry of three years from the date of suspension of the licence on the ground that factual matrix warranted a lenient view to be taken. 5. Dissatisfied with the order of the tribunal, the revenue preferred Customs Appeal No.71 of 2007 before the High Court of Judicature at Bombay. The Division Bench of the High Court, by the impugned order dated 10.08.2007, did not accept the stand of the revenue that subletting of CHA is a serious violat .....

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tter of appeal by special leave before this Court. 6. We have heard Ms. V. Mohana, learned senior counsel along with Ms. Binu Tamta, learned counsel for the appellant and Mr. V.M. Doiphode, learned counsel for the respondent. 7. Learned counsel for the respondent submitted that the present appeal does not deserve to be considered in view of the grounds taken in paragraph 'G' of the special leave petition. The said ground reads as under :- G. That this Hon'ble Court, on similar facts .....

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ppreciate the submission, we may reproduce the order dated March 24, 2014 dismissing the appeal. It reads as follows :- 1. We have heard learned counsel for the parties to the lis. 2. We find no merit in the Civil Appeal. Accordingly, the Civil Appeal is dismissed. However, the question of law raised is kept open to be agitated in an appropriate case. I.A. No.7 is also disposed of accordingly. Ordered accordingly. 9. It is manifest from the aforesaid order that the two-Judge Bench, while dismiss .....

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learned counsel for the respondent and, therefore, we shall proceed to address the issue on merits. 10. It is submitted by Ms. Mohana, learned senior counsel appearing for the revenue that when it has been established after conducting the necessitous investigation that the licensee has violated the terms of the licence and the Regulations and it habitually involved in the similar kind of activity, the discretion of the tribunal was totally uncalled for. It is urged by her that whenever a statuto .....

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milar circumstances, the period was restricted and once the discretion has been exercised by the tribunal and that has been given stamp of approval by the High Court, this Court should be slow to exercise its jurisdiction under Article 136 of the Constitution of India. 12. As is noticeable, the respondent was granted a regular licence under Regulation 10 of the 1984 Regulations. Regulation 11 deals with execution of bond and furnishing of security. Regulation 12 stipulates the period of validity .....

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ustom House Agent shall: (a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as Custom House Agent and produce such authorisation whenever required by an Assistant Commissioner of Customs or Deputy Commissioner of Customs; (b) transact business in the Customs Station either personally or through an employee duly approved by the Assistant Commissioner of Customs or Deputy Commissioner of Customs, designated by the Commissioner; (c .....

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formation which he imparts to a client with reference to any work related to clearance of cargo or baggage; (f) not withhold information relating to clearance of cargo or baggage issued by the Commissioner of Customs from a client who is entitled to such information; (g) promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debt or obligations owing to the Government and promptly account to his client for funds received for him from the Government or .....

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alse accusation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing of value; (j) not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Custom House Agent which is sought or may be sought by the Commissioner; (k) maintain records and accounts in such form and manner as may be directed from time to time by an Assistant Commissioner of C .....

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ase may be, and the name of the Custom House Agent, prominently at the top of such documents; (n) in the event of the licence granted to him being lost, immediately report the fact to the Commissioner; (o) ensure that he discharges his duties as Custom House Agent with utmost speed and efficiency and without avoidable delay; and (p) not charge for his services as Custom House Agent in excess of the rates approved by the Commissioner from time to time under Regulation 25. Regulation 19 provides f .....

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censing Regulations, 1984, except as respect things done or omitted to be done before such supersession, brought the 2004 Regulations. It is not in dispute that the investigation has been carried on, order has been passed under Regulation 20(c) of the 2004 Regulations. The said order of revocation was assailed before the tribunal under Section 129A read with Regulation 22(8) of the 2004 Regulations. Section 129B pertains to the jurisdiction of the tribunal and nature of the orders that the tribu .....

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he case may be, after taking additional evidence, if necessary. Regulation 22 of the 2004 Regulations reads as follows : 22. Procedure for suspending or revoking licence under Regulation20.-(1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent within ninety days from the date of receipt of offence report, stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit within thirty days to the .....

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of the written statement from the Customs House Agent, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs shall, in the course of inquiry, consider such documentary evidence and take such or .....

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of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording his findings and submit his report within ninety days from the date of issue of a notice under sub-regulation (1). (6) The Commissioner of Customs shall furnish to the Customs House Age .....

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use Agent, pass such orders as he deems fit within ninety days from the date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5). (8) Any Customs House Agent aggrieved by any decision or order passed under regulation 20 or sub-regulation (7) of regulation 22, may prefer an appeal under section 129A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under sub-section (1) of section 1 .....

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cordance with law, regard being had to the factual matrix of the case. The tribunal having been conferred the power to modify the order, restricting the period of revocation would definitely come within the sweep of the said power. The issue would, as stated earlier, be whether the said jurisdiction has been properly exercised in the case at hand. On a perusal of the order passed by the Commissioner, it is clearly perceptible that there has been number of violations by the respondent. The enquir .....

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