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M/s Shiva Logistics Ltd Versus CC New, Delhi

2017 (10) TMI 473 - CESTAT NEW DELHI

Revocation of CHA license - forfeiture of security deposit - liability of principal for the acts of his agents - Principle of Vicarious Responsibility - alleged role played by the appellant in fraudulent exports carried-out under claim of undue export benefits - Held that: - it is evident that the shipping bills for the fraudulent export consignments were filed by the appellant-CHA which helped the unscrupulous persons to play the fraud on the exchequer. It is also evident that the appellant has .....

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e fraud rather than the actual IEC holder. - As per the Principle of Vicarious Responsibility, a Principal is liable for all acts and omissions of his agent. In the present case, we note that Sh. Krishnan Kumar Garg was a G.card holder and employee of the appellant during the period when the shipping bills for the fraudulent exports were made. Sh. Garg was an authorized signatory of the appellant, hence the signatures appended by him on the export documents will necessarily have to be held a .....

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sure proper conduct of such employees in transaction of business as CHA and he be held responsible for all acts or omissions of his employees in regard to their employment. - The contraventions of various regulations stand established against the appellant - appeal dismissed - decided against appellant. - C/50303/2016 - C/A/56481/2017-CU[DB] - Dated:- 11-9-2017 - (Dr) Satish Chandra, President And Mr V. Padmanabhan, Member (Technical) Present for the Appellant: Shri Turan Garg, Advocate Pres .....

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Regulations, 2004 (CHALR, 2004). Further, the Commissioner (Customs) also appointed an Enquiry Officer to enquire into the alleged violation of CHALR, 2004. After receipt of the Enquiry Report, the Commissioner (Customs) passed the impugned order after the adjudication proceedings in which the CHA license of the appellant was revoked and the security deposit of ₹ 50,000/- was forfeited. Aggrieved by the impugned order, the present appeal has been filed. 2. The brief facts of the case are t .....

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Most of the Import Export Codes operated by Surat based operators like Tejas Desai, Sunil Muniyal, K.K. Nankani etc were obtained in the name of persons who were no way connected with the export of fabrics. All these IEC holders, for monetary consideration, had allowed their names and identities to be used by these operators in opening the export firms which were to be used for fraudulent exports. These were essentially proxy/benami exports for cornering undue/illegal export benefits (Drawback o .....

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/o Metalised Yarn . None of the shipping bills or the relevant export invoices showed actual description of the goods. Scrutiny of the invoices revealed that all these purchase invoices were computer print-outs. Letters to the suppliers for verification at the addresses mentioned in these invoices were returned undelivered by postal authorities which shows that the suppliers mentioned in these invoices were not existing at the address mentioned in these invoices. Admittedly, goods were purchased .....

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e and Mansukh Kataria) who had carted the goods at the CFS also confirmed this fact. Financial investigation of high value transaction from the bank accounts of these export firms shows that all the high value cheques issued from these bank accounts were encashed with the help of cheque discounters and admittedly, the cash amounts were paid back to hawala operators. Thus, it appears that these operators had misused export incentive schemes like DEPB & Duty Draw Back by exporting cheap and in .....

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vealed that the export documents were filed by Sh. Krishnan Kumar Garg, G Card holder of the appellant. Sh. Garg in his statement before the investigating officers, admitted that he had filed such shipping bills for fraudulent exports in which undue benefit of duty drawback/DEPB schemes were claimed by making use of the name of the appellant, for monetary consideration. Further, it emerged that Sh. Amber Mufti, one of the persons involved in the fraudulent export, in his statement admitted that .....

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egulation 13(e) for failure to exercise due diligence to ascertain correctness of any information to be given to client. (iv) Regulation 13(n) for not discharging the duties entrusted to CHA with utmost speed and efficiency. (v) Regulation 13(o) for failure to verify the antecedent, correctness of IEC code and functioning of a client at the declared address. (vi) Regulation 19(8) for not exercising proper supervision over the conduct of its employees. 4. The above observations led to the initiat .....

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se of the name of the appellant without the knowledge of the appellant. Consequently, the appellant cannot be held liable for the fraud. Hence he submitted that the revocation of CHA license as well as forfeiture of the security deposit may be set-aside. 7. The ld. Counsel for Revenue justified the impugned order. He submitted that the appellant, as a principal, is liable for acts and omissions of his agent. Accordingly, he argued that the revocation of CHA license and forfeiture of deposit has .....

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er claim of undue export benefits. In the case investigated by DRI against M/s Varun Impex, it is seen that as many as 20 shipping bills have been filed in the name of the appellant-CHA. During interrogation, Sh. Krishnan Kumar Garg, G card holder of the appellant and authorized signatory has filed the shipping bills and signed them on behalf of the appellant-CHA. In his statement, Sh. Garg has admitted that he has filed these export documents to facilitate the fraudulent exports, on the basis o .....

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he appellant-CHA which helped the unscrupulous persons to play the fraud on the exchequer. It is also evident that the appellant has never met and was not aware about the actual IEC holders whose number was used by Sh. Krishnan Kumar Garg in filing the documents. Sh. Garg has further admitted that he signed the documents without verifying the credentials of exporter. Without any authorization by the firms involved in the export, the appellant-CHA has filed the export documents resulting in undue .....

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rized signatory of the appellant, hence the signatures appended by him on the export documents will necessarily have to be held as affixed by him in the course of normal business and on behalf of appellant. After having authorized Shri Garg to sign the documents on behalf of the appellant, the appellant cannot escape the vicarious responsibility for the acts and omissions of Sh. Garg. This view finds support in the judgment of the Hon ble High Court of Gujarat in the case of Rajendra Purohit Vs .....

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business as CHA and be held responsible for all acts or omissions of his employees in regard to their employment . 10. We have also considered the decision of Tribunal in the case of P.B. Nair (supra) wherein Tribunal upheld the revoking of the CHA license in similar circumstances to the present case. The findings in this case will be applicable to the present case. 11. Further, we find that in the case of CC (General) Vs Worldwide Cargo Movers - 2010 (253) ELT 190 (Bom), the Bombay High Court a .....

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