New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (9) TMI 520 - CESTAT NEW DELHI

2016 (9) TMI 520 - CESTAT NEW DELHI - 2017 (347) E.L.T. 132 (Tri. - Del.) - Restoration of CHA license - forefeiture of security deposit - Regulation 20 of CHALR/2004 - imposition of penalty - Section 117 of the Customs Act, 1962 - CHA licence-holder, firm of Mr. Walia - H Card holder, Shri Gurnani - mureate of potash (MOP) - restriction on export - seizure - violation of provisions of regulations 12, 13 (a) 13 (b), 13 (d) 13 (0), 19 (5) and 19 (8) of CHALR/ 2004 by Mr. Gurnani - Held that: - As .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ave questioned those aspects which he himself admitted. - The appellant allowed its license to be used and operated by Shri. Gurnani, for whom it sponsored H card even though it claimed he was not its employee (and therefore, sponsoring of H card itself was illegal). The appellant allowed using of its CHA license by Mr. Gurnani not as a one-off but for about 3 years and during this long period did not even take basic precaution to ensure that the license was not misused and that the obligati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

charge its duties as CHA and thereby grossly violated Regulations 13 & 19 of CHALR, 2004 - Such serious violation on the part of the CHA can hardly deserve any condonation or leniency. - The case of State of Punjab V. Ex-Constable Ram Singh [1992 (7) TMI 332 - SUPREME COURT] is relied upon where it was held that a single act of corruption is sufficient to award the maximum penalty which under the CHALR, is of revocation of the license - revocation of licence and imposition of penalty upheld .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which CHA license of the appellant was cancelled in terms of Regulation 20 of CHALR/2004 and security deposit of ₹ 75,000/- (as per corrigendum dated 18.10.2011) was also forfeited. Penalty of ₹ 1,00,000/- was also imposed under Section 117 of the Customs Act, 1962. The facts briefly stated are as under:- 2. The appellant held CHA license issued by Commissioner, Customs (Preventive), Jodhpur. It did not have its own setup at Kandla Port, and therefore, for last 2, 3 years (with refe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of MOP. Export of MOP is restricted and Shri Gurnani admitted in his statement that the exports in the name of M/s. Dadi Impex were being attended to by him as the appellant CHA s H card holder and that the Managing Director of M/s. Dadi Impex had told that he wanted to export MOP in the guise of salt and would give payment of actual expenses + ₹ 20,000/- per container. The Commissioner held the CHA appellant guilty of violation of provisions regulations 12, 13 (a) 13 (b), 13 (d) 13 (0), .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unicators vs. Commissioner of Customs, Mumbai - 2007 (209) ELT 142. 4) There was no subletting of the license by the appellant. 5) That Shri Gurnani was employed by the appellant till December, 2009 on a temporary employment basis and thereafter he started undertaking the CHA related work of the appellant as its H card holder. 6) The appellant did not receive any payment in respect of the said 2 containers. 7) There is no contravention of any provision of CHALR. 8) He cited the judgments in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the contention of both sides. 6. As regards the cross-examination of Mr. Gurnanai, the only possible consequence of denial of his cross examination would be that Shri Gurnanai s statement may not be relied upon as an evidence. However, we find that the statement of Shri Gurcharan Walia is quite in harmony with the statement of Shri Gurnanai, and therefore, to the extent the statement of Shri Gurnani is in harmony with that of Shri Walia himself, it certainly is of corroborative value as Shri Wal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

andled the export shipments of M/s. Dadi Impex Pvt Ltd., Mumbai for CHA firm M/s. Gursharan Singh Walia. At Kandla, he used to file shipping Bills on RES export (software used for uploading S/Bs and B/Es in ICEGATE) and get it cleared and submit the same to the Container Line; * he had understanding with CHA Shri Gurusharan Singh Walia for ₹ 900/- per container for the export through Kandla Port. * he had H card of CHA firm M/s. Gursharan Singh Walia, but he did not receive salary from the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing Services, which amounted to sub-letting of CHA licence. 7. Shri Kamal Inderraj Gurnani in his statements dated 13.10.2010 (Annexure-II), inter-alia, further stated that:- * Shri Anand Prakash Chaudhary (Managing Director of M/s. Dadi Impex Pvt. Ltd., Mumbai) told him that he had to export MOT (Muriate of Potash) packed in 50kgs. PP bags in containers in the guise of salt. Shri Anand Prakash Chaudhary also informed that he would give payment of actual expenses plus ₹ 20,000/- per contai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Shri Gursharan Singh Walia had allowed him sub-letting of the CHA licence No. AAJPW7765MCH001 and he was regularly attending clearance work at Kandla on that licence. Therefore, he decided to attend clearance of MOP through Kandla and in respect of clearance through MP & SEZ, Mundra, arranged for other CHA. * Shri Gursharan Singh Walia came in touch with him through his relative Shri Pritpal Singh during the year 2007, when he was working in M/s. Nakoda Forwarders and since last more than tw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ss he attended the same. He knew that the way of using licence of CHA, as he had used the CHA licence of M/s. Gursharan Singh Walia, was termed as subletting, which was not allowed in terms of CHA Licensing Regulations. He knew that it was not proper. 8. Shri Gursharan Singh Walia, Proprietor of M/s. Gursharan Singh Walia, CHA in his statements dated 16.07.2010 inter-alia, stated that:- * at Kandla, he did not have their own set up/office but started attending clearance work through Shri Kamal I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f their CHA firm at Kandla Port. * he did not pay salary to Shri Kamal Inderraj Gurnani. Shri Gurnani is not on roll of his CHA firm. Shri Gurnani was doing business of forwarding in the name of M/s. Glorex Enterprises and used to bring business to him and used to attend clearance work at Kandla. For that Shri Gurnani used to give him ₹ 500/- per container (irrespective of size of the containers) after keeping his charges, he did not pay Shri Gurnani any charges. He was not aware as to how .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

onsented for attending clearance work of M/s. Dadi Impex Pvt. Ltd. While filing first two shipping bills in the name of M/s. Dadi Impex Pvt. Ltd., Shri Kamal Inderraj Gurnani had not informed him. When he received acknowledgements from icegate site on his e-mail address, i.e., cha@gswalia.in, he came to know that two Shipping Bill No. 1169823 and 1169824 both dated 29.04.2010 were filled by Shri Kamal Inderraj Gurnani in the name of M/s. Dadi Impex Pvt. Ltd., Mumbai. Then he called Shri Kamal In .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of salt by concealing bags of MOP behind some bags of salt in all the seven containers covered under the said two shipping bills. He was aware that it was a restricted item for export. * no extra charges were fixed for said illegal export of MOP in the guise of salt. Shri Kamal Inderraj Gurnani informed him that it was salt. Till detection by DRI, he was not aware that MOP was being exported. He had never met/talked to Ananad Prakash Chaudhary or any person of M/s. Dadi Impex Pvt. Ltd. * while .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

de such enquiries. He also relied on the export documents as informed by Shri Gurnani and had not doubted it because the goods were factory stuffed. Being CHA, it was not proper for him to allow Shri Kamal Inderraj Gurnani to file Shipping Bills on his behalf. 9. Perusal of Shri Walia s statement makes it evident that he allowed Shri Gurnanai to engage in customs clearances using the appellant s license for about 3 years and was regularly receiving the payments for having done so. The appellant .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er nor was authorization obtained from it - CHA when engages the employee for conducting his business he acts through him and when alleged illegalities committed are in the course of employment and while discharging his function as CHA he cannot dissociate himself from those act when not having fulfilled is part of the obligation - Order of prohibition can not be said to be passed without any substantiating material. It clearly comes out from the statement of Shri Walia himself and which is also .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y informed by Mr. Gurnani that the impugned shipping bills for export of goods of Dadi Impex will be filed (as admitted by Shri Walia himself) but Shri Walia did not ensure that proper authorization from the exporter is obtained. This is a clear violation of Regulation 13 (a) as CHA is mandated to obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as a customs broker. It is also evident that the appellant did not advise M/s. Dadi Im .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

comes out from the evidence that the appellant transacted the business not personally or through an employee as Shri Walia has insisted in his statement that Shri.Gurnani was not an employee, and thus, the violation of Regulation 13 (b) is also established, inasmuch as, as per Regulation 13 (b) a CHA is mandated to transact business either personally or through an employee duly approved by the Dy. Commissioner of Customs or Assistant Commissioner of Customs as the case may be. The appellant als .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Asiana Cargo Service (supra) cited by the appellant does not come to its rescue, inasmuch as, in that case the Hon ble High Court came to a finding that there was no finding that the trust operating between CHA and customs authorities was violated or irretrievably lost for future operation of licence and that proportionality doctrine escaped the analysis in the order revoking the license and further that the only proved infraction was issuance of G cards to non-employees. In the present case .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

illed. The result was that the license got misused for attempted export of MOP which was restricted for export. The CHA licensee is reposed with a great degree of trust by the Customs Authorities and such conduct of the appellant was more than enough to irretrievably breach such trust. Such dereliction of duty on the part of a CHA, can potentially have even graver financial/security consequences. Thus, the appellant gravely failed to discharge its duties as CHA and thereby grossly violated Regul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

appellant. Indeed, we find that in the case of Worldwide Cargo Movers (supra), the Bombay High Court apart from upholding the principle of liability of the CHA for the act of its employees analyzed this issue in detail and went on to observe as under : 27.We have noted what the Tribunal has observed in the impugned order. In our view, the finding given by the Enquiring Officer and thereafter the order passed by the appellant in original are fully justified on the facts of the case. The authorit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a citizen to carry on his business or profession, it is subject to reasonable restrictions and conditions. In the present case, those conditions were already stipulated. In the case of Arvind Bhagat (supra), the order of Madras High Court has been left undisturbed by the Apex Court. It was a case where the CHA had failed to discharge his obligation to exercise proper supervision. In the case of Sri Kamakshi Agency (supra), the CHA was held responsible for the fraudulent activities of a third pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he is clearly responsible vicariously. (emphasis added). 28. In our view, the Tribunal has committed a grave error in interfering with the decision of a domestic authority. In a departmental proceeding one has to see whether the principles of natural justice are followed and the findings are justified from material on record. Once both these aspects are satisfied if an outsider Tribunal interferes, its findings and order will be improper and perverse which is what has happened in the present ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version