TMI Blog2016 (9) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 obligations cast upon the licensee under CHALR 2004 were being fulfilled. 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 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Shri Gurnani was not allowed. 2) It did not authorize/ consent to filing of the impugned shipping bills covering 175 tones of MOP. 3) The CHA license cannot be revoked for acts committed by an employee in his personal capacity and cited the decision of Tribunal in the case of Bharat Overseas Communicators 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 case of Asiana Cargo Service vs. Commissioner of Customs ING 214 (302) ELT 161 (Del.) to assert that punishment should be commensurate with the gravity of offence. 4. Ld. D.R. on the other hand, contended that the appellant had allowed its license to be misused by a person who was a mere H card holder without any supervision and violated Rules 12, 13 19 for CHALR 2004, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 container. He accepted that proposal of handling the export of MOP. * he was aware of the fact that MOP (Muriate of Potash) is not freely exportable. * in respect of clearances of exports of M/s. Dadi Impex Pvt. Ltd. , Mumbai through Kandla, he was attending clearance work on CHA licence of M/s. Gursharan Singh Walia, Jodhpur. He was not an employee of CHA firm M/s. Gursharan Singh Walia but with the understanding of payment of ₹ 900/- (Rs. 500/- for agency and ₹ 400/- for misc. expenses) 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 wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use due to some changes in staff etc. he was not able to cope up with all the works. But when Shri Kamal Inderraj Gurnani insisted that it was a big salt exporter, he agreed and consented 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 Inderraj Gurnani over phone and Shri Gurnani informed him that as per previous talk, he had filed those two shipping bills. * for the said two shipping bills of M/s. Dadi Impex Pvt. Ltd., he had not received any payment. It was ₹ 500/- as per prevailing arrangement/practice between him and Shri Kamal Inderraj Gurnani. Initially it was informed to him by Shri Gurnani that the export goods were salt but after detection of the case by DRI, he came to know that MOP was being exported in the guise of salt by conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antiating material. It clearly comes out from the statement of Shri Walia himself and which is also in harmony with the statement of Shri Gurnanai that he had allowed Shri Gurnanai to handle customs clearance using the appellant s CHA licence without exercising proper supervision over the activities of Shri Gurnani. Shri Walia has himself asserted that he did not sublet the license to anybody including to Shri Gurnanai which means that the appellant was directly responsible for the action of its H card holder as a H card holder works only for and behalf of the CHA licencee. Shri Walia was duly 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 Impex to comply with the provisions of the Act. Indeed, leave alone advising the exporter to compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere being fulfilled. 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 Regulations 13 19 of CHALR, 2004 as discussed above. Such serious violation on the part of the CHA can hardly deserve any condonation or leniency. It is also clear from the above analysis that Shri Gurnani was not acting in his personal capacity but in the capacity of the appellants H card holder and therefore the judgement of CESTAT in the case of Bharat Overseas Communicators (supra) hardly comes to the appellant s rescue. The above analysis remains valid in the wake of the submissions of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of the fact that the appellant-Commissioner of Customs is responsible for happenings in the Customs area 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 his employees. The decision is best to be left to the disciplinary authority save in exceptional cases where it is shockingly disproportionate or mala fide. That is not the case here. (emphasis added). 29. In the circumstances, we allow Customs Appeal No. 37 of 2006 filed by the appellant-Commissioner of Customs since the CESTAT was not justified in setting aside the revocation of the CHA licence in the facts and circumstances of the case and on the material on record. The order of the CESTAT setting aside the order of the appellant-Commissioner of Customs was clearly perverse in law. Appeal No. 37 of 2006 is, therefore, allowed. The order dated 4-4-2006 passed by the CESTAT is set aside and the order dated 17-1-2006 passed by the appellant-Commissioner of Customs is restored . 12. The ratio contained in the above reproduced paras (specially ..... X X X X Extracts X X X X X X X X Extracts X X X X
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