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Bhaskar Logistic Services Pvt. Ltd. Versus Union of India And 6 Others

2016 (7) TMI 42 - PATNA HIGH COURT

Revocation of CHA license - Writ application - Misuse of IEC - allegations of misconduct against the petitioner - Held that:- We would have granted the petitioner the liberty to avail the alternative remedy, but since we have considered and discussed the merits of the case, we are not inclined to do so. - We deprecate the conduct of the petitioner in making statement in paragraph 5 of CWJC No. 5540 of 2015, as discussed above. There is statement in the said paragraph that said Sheikh Khurshe .....

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And Chakradhari Sharan Singh, JJ. For the Petitioner : Mr. D. V. Pathy, Advocate For the Respondents : Mr. Sanjay Kumar, ASG JUDGMENT ( Per Honourable Mr. Justice Chakradhari Sharan Singh ) These two writ applications, under Article 226 of the Constitution of India, have been filed on behalf of the same petitioner and arise out of the action taken, under the provisions of Customs House Agent Licensing Regulations, 2004 (CHALR)/Customs Broker Licensing Regulation, 2013 (CBLR), against the petiti .....

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s), Patna. The petitioner has challenged the said order of suspension by filing CWJC No. 19535 of 2014. The Customs House Agent Licensing Regulations, 2004 (CHALR), came to be superseded with issuance of notification, dated 21.06.2013, and framing of Customs Broker Licensing Regulations, 2013 (CBLR). The said CBLR, however, have saved all things done or omitted to have done before such supersessions. 4. During the pendency of the said writ application, a show cause notice was served on the petit .....

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ceipt of the said show cause notice. The petitioner, by way of filing CWJC No. 5540 of 2015, challenged issuance of the show cause notice. From the records, it transpires that an Enquiry Officer was appointed to enquire into the allegations of misconduct made against the petitioner. The enquiry was held in accordance with the provisions of Customs Broker Licensing Regulations, 2013, which superseded the previous Customs House Agent Licensing Regulations, 2004. The petitioner was charged of havin .....

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terlocutory application, being I.A. No. 7616 of 2015, the petitioner sought amendment in CWJC No. 5540 of 2015, for seeking quashing of the said adjudication order, dated 04.09.2015, which has been allowed. 5. These are the circumstances in which both the writ applications have been heard together and are being disposed of by the present common judgment. 6. We have Heard Mr. D. V. Pathy, learned Counsel for the petitioner, Mr. Sanjay Kumar, Assistant Solicitor General and Ms. Nivedita Nirvikar, .....

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over maintainability of the present writ application (CWJC No. 5540 of 2015) on the ground of existence of statutory and equally efficacious remedy under Regulation 21 of the CBLR, which reads thus:- 21. Appeal by Customs Broker.- A Customs Broker, who is aggrieved by any order passed by the Commissioner of Customs under these regulations, 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 sec .....

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V. Pathy, learned Counsel appearing on behalf of the petitioner, responding to the preliminary objection, has submitted that the rule of non-maintainability of writ petition, under Article 226 of the Constitution of India, is a rule of discretion and not of compulsion. He has submitted that in similar circumstance, other Courts have interfered with the action of the adjudicating authorities. Special reference has been made in this regard to the Supreme Court s decision, in the case of Hotel Ash .....

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ion, relating to a consignment of mobile accessories by one M/s Regent Enterprise, it was noticed that there was another live consignment also covered under Bill of Entry (B/E) No. 762971, dated 15.03.2011, and Bill of Lading No. TAOCB1100032301 of laminate sheets having dimensions 1220 x 2440 x 0.7 MM abd 1220 x 2440 x0.9 MM, total admeasuring 15.83 CBM, imported in the name of the said importer, which was awaiting clearance. The declared assessable value of the said consignment was ₹ 3,3 .....

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under Section 108 of the Customs Act, disclosed that the goods did not belong to him and one Mehmood Patni had taken him to an Office at Belapur where he was introduced to one Kamlesh as owner of the goods and another person as CHA. He categorically said that whatever goods had been imported in the name of M/s Regent Enterprises did not belong to him and only his IEC was used. In course of investigation of another consignment, which was imported in the name of M/s Regent Enterprises, his (Izaha .....

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further said that said Mehmood Patni had given him a sum of ₹ 30,000/- in two instalments and when he was suspicious about the money which said Mehmood Patni was giving, Mehmood Patni made him to understand that he would not put him in trouble. He also disclosed that since he (Mehmood Patni) was not paying him money, he had taken back the IEC from Mehmood Patni and, thereafter, he allowed the goods to be imported against his IEC, which were not his goods. 14. Sheikh Khursheed, who was des .....

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ed the Bill of Entry and paid duty and thereafter he proceeded to clear the goods. In the docks, the Officer had directed him to appear before Central Investigation Unit (CIU). It was, then, that he contacted said Sahnawaz for calling the importer and, thereafter, he learnt that the consignment belonged to one Kamlesh and Ramesh. He, thus, failed to give details of whereabouts and antecedents of said Ramesh and Kamlesh. 15. Sahnawaz Choudhary said, in his statement recorded under Section 108 of .....

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ll of Entry No. 762971, dated 15.03.2011, was imported by Ramesh and Kamlesh in the name of M/s Regent Enterprises, which acted as front to this import. The said Izahar Hussain was only IEC Holder, who had obtained the IEC at the instance of Mehmood Patni. The said IEC was obtained to be lent to other persons for misuse. Izahar Hussain had categorically said that the goods imported by using his IEC did not belong to him. While scrutinizing the documents, it was found that C & F value declare .....

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aphs 4 and 5 of CWJC No. 5540 of 2015, as follows: 4. That the petitioner, after having Custom House Agent/Custom Broker (hereinafter CHA/CB) License No. 01/CHA/2008 by the Commissioner of Customs, Patna (Res No - 2) on 29.02.2008, has been professing the business of Custom House Agent on all India basis and while granting license the respondent did not assure any secured or guaranteed any sort of business or livelihood. 5. That the petitioner opened an office at Mumbai in November/December, 200 .....

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above, is, evidently, an attempt to convince this Court that Sheikh Khursheed was merely G-card holder employee of the petitioner-company at the relevant point of time and was not the Executive Director of the petitioner-company. 19. In order to make out a case that said Sheikh Khursheed had nothing to do with the company after 30.01.2013, statement has been made that he had resigned his job with the petitioner-company on 30.01.2013 on account of illness of his wife. There is no such statement i .....

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n Trade (Development and Regulation) Act, 1992 and Rules 2(c), 12 and 14 of Foreign Trade (Regulation) Rules, 1993 and part 2.12 of Foreign Trade Policy, 2009-2014 read with Rule 8 and 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The Confiscating Authority rejected the declared assessable value of the goods to be ₹ 3,36,757.59/- and re-determined the value under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, at ₹ 30,41 .....

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in the Office of the Commissioner of Customs (Appeals-II), Mumbai-II. The appeals came to be allowed, so far as the petitioner and Sheikh Khursheed are concerned by an order, dated 30.09.2015, by quashing the order, in original, dated 03.12.2014, whereby penalty of ₹ 50,000/- was imposed on the petitioner and said Sheikh Khursheed. 22. The said order, dated 30.09.2015, has been brought on record by way of Annexure 29 to the supplementary affidavit filed on behalf of the petitioner. 23. Wh .....

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vice on 30.01.2013. Had that been so, the address of Sheikh Khursheed would have been different. We are not on the consequence or purpose of the said statement having been made in paragraph 5 of the writ application, but in our view, the statement is palpably false which has been deliberately made to mislead this Court in a proceeding under Article 226 of the Constitution of India. The conduct of the petitioner is reprehensible. 25. Mr. D. V. Pathy, learned Counsel appearing on behalf of the pet .....

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sis has been laid on paragraph 8 of the said order, dated 30.09.2015, which is being reproduced herein below:- As a result, I find that on facts that the Appellants had held a bona fide belief with regard to the verification of the import documents and were not concerned with the mis-declaration and undervaluation and accordingly filed the Bill of Entry on the basis of the said documents for the purposes of assessment. Hence, the question that the Appellants had prior knowledge of the offence co .....

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- 6. .......... The allegations made against the Appellant, CHA is with regard to possible violation of the CHALR, 2004 such as satisfying himself about the genuineness of the importer, meeting the actual importer personally, proper verification of import documents, etc. which under the present adjudication proceedings are not required to be discussed in view of the fact that the case is required to be discussed in the light of the customs Act, 1962. Therefore, any lapse attributable to the disc .....

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s of the actual importer, and did not observe due diligence for proper classification and valuation of the imported goods. 28. Mr. Pathy has placed reliance on the Division Bench decision of the Kerala High Court, in the case of Proprietor, Carmel Exports and Imports (supra), wherein the Court held, in paragraph 15, as follows:- 15. Coming to the submission that the appellant is only a "name lender" for the import of goods by one Anwar, we shall presume for the time being that the appe .....

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Code Number. - No person shall make any import or export except under an Importer-exporter Code Number granted, by the Director General or the officer authorised by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General". The expression "import" occurring in the said section means bringing into India of goods as defined under Section2(e). There is nothing in the law which requires an importer to be either the consume .....

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mers. We do not understand what can be the legal objection for such a transaction especially where the import of such goods is otherwise not prohibited by law. At any rate, if the respondents have any tenable legal objection on that count, the respondents must pass an appropriate order indicating the legal basis on which the action is proposed and also the nature of the action proposed for such perceived violation of law on the part of the respondents after giving a reasonable opportunity to the .....

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espondents are bound to release the goods under Section 110A of the Customs Act pending adjudication of the legality of the import, we are of the opinion that as rightly held by the learned Single Judge, Section 110A does not create an absolute right in favour of the importer, but vests a discretion in the customs authorities to follow such course in appropriate case goes without saying that it is only a discretion to be exercised in accordance with the well settled principles of law governing t .....

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Section 125 of the Customs Act provides for redemption of goods on payment of fine so long as the goods are not goods falling under the category of prohibited goods for the purpose of import. (Emphasis is supplied) 29. It is noticed from the Division Bench decision of the Kerala High Court, in the case of Proprietor, Carmel Exports and Imports (supra), that nothing was brought to the notice of the Court except Section 7 of the Foreign Trade (Development and Regulations) Act, 1992. The Kerala Hi .....

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ur notice by learned Counsel appearing for the respondents-Union of India. The said Rules have been framed in exercise of power under Section 19 of the Foreign Trade (Development and Regulation) Act, 1992. Section 2 (c) of the said Rules defines the term Importer or Exporter . as follows: 2 (c) "importer" or "exporter" means a person who imports or exports goods and holds a valid Importer-exporter Code Number granted under section 7. (Emphasis is added) 30. Evidently, thus, a .....

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allotted to him by the competent authority . Rule 12 clearly prescribes that one can import goods only after declaring the Importer-Exporter Code Number. The person importing the goods, therefore, must have Importer-Exporter Code Number allotted to him by the competent authority. An importer, as is apparent from Rule 12, cannot import goods under Importer-Exporter Code Number allotted to someone else. Said it differently, a person having Importer-Exporter Code Number cannot allow someone else to .....

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e, to specify procedures to be followed for an exporter or importer or by licensing or other competent authority for the purpose of implementing provisions of the said Act, rules and orders made thereunder, as well as the foreign trade policy. It also prescribes that such procedures shall be published by means of public notice. In exercise of power conferred under the said Paragraph 2.4 of the Foreign Trade Policy, 2009-2014, the Director General of Foreign Trade had notified the handbook of pro .....

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llowed against one Permanent Account Number (PAN) and no person could import or export without IEC. If the actual importer or exporter is not having his own IEC, he could be able to circumvent the obligation imposed under Customs Act or under any other law, for the time being in force. 32. These provisions were apparently not brought to the notice of the Division Bench of the Kerala High Court, in the case of Proprietor, Carmel Exports and Imports (supra).We, respectfully, disagree with the view .....

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under Regulation 13 (o) of the CHALR. Thus, if a Customs Broker facilitates the filing/processing of a Bill of Entry by a person other than a valid IEC holder using IEC of a different person, it will amount to violation of the provisions of Regulation 11 (n) of CBLR/Regulation 13 (o) of CHALR. 34. In the case of Arvind C Bhagat v. Commissioner of Customs, reported in 2000 (122) E.L.T. 678 (MAD.). The Division Bench of Madras High Court upheld the Department s action on the CHA, who had stood for .....

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rinciples of natural justice. The petitioner was given due opportunity of being heard, which it had availed. The competent authority came to a conclusion that the petitioner had failed to exercise due diligence to ascertain correctness of any information which it imparts to a client with reference to any work relating to clearance of cargo or baggage. What we notice in the present case is that Sheikh Khursheed of the petitioner-company knew that the IEC holder, Izahar Hussain, was not the import .....

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Regulations, 2013 is made out. The plea that Sheikh Khursheed disassociated himself from the affairs of the petitioner-company, may make the case of the petitioner worse inasmuch as there is requirement under Clause (5) of Regulation 17 of Customs Broker Licensing Regulations, 2013, that Where the Customs Broker has authorized any person employed by him to sign documents relating to his business on his behalf, he shall file with the Deputy Commissioner of Customs or Assistant Commissioner of Cu .....

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