TMI Blog2018 (1) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... export documents in their name and facilitated the fraudulent claims of drawback. While the appellant surely deserves a rap on the knuckles, revocation of the license for acts and commissions committed by their employee without their knowledge or intent is surely an overkill - appeal allowed. - C/41041/2017 - Final Order No.43122/2017 - Dated:- 14-12-2017 - Ms. Sulekha Beevi C.S., Member ( Judicial ) And Shri Madhu Mohan Damodhar, Member ( Technical ) Shri R. Srinivasan, Consultant for the Appellant Shri K. Veerabhadra Reddy, JC ( AR ) for the Respondent ORDER Per Bench M/s. Joveens Expotex, the appellants herein, is a licensed CHA transacting business at various customs stations including the CFS/ICDs at Tirupur. During the course of verification of supplementary drawback claims filed by exporters, it appeared that in respect of 13 exporters, who had exported garments through ICD / CFS Tirupur, fake bank realization statements (BRCs) had been produced to facilitate fraudulent claim of drawback. It further emerged that out of the 67 Shipping Bills involved, 62 were filed by the appellant on behalf of the exporters concerned. The concerned exporters could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Commissioner of Customs vide impugned order dated 21.3.2017, ordered revocation of the CHA licence of the appellant and also forfeited the security deposit under Regulation 20(1) of the CHALR. Aggrieved, the appellants are before this Tribunal. 2. Today, wherein the matter came up for hearing, on behalf of the appellant, ld. consultant Shri R. Srinivasan made the following arguments:- 2.1 That the main office of the appellant is at Coimbatore and that only to conduct clearing operations at ICD/CFS Tirupur, they had opened branch there. 2.2 As permitted under Regulation 13(b) of CHALR, 2004, the appellant transacted business through an employee duly approved by the customs authorities. As the proprietor / partner cannot be present always in the office at Tirupur, the employees transacted business using pre-signed shipping bills or bills of entry entrusted to them. However, such documents were used only for clearance of the goods for whom appellant acts as CHA. 2.3 During investigation, it was noticed that Mr.Ranganathan, a former employee of the appellant had been involved in the alleged fraud. The said person was working with the appellant for six months, during A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication. He submits that the very act of the appellants in giving away signed copies of Bills of Entry and Shipping Bills and related customs documents itself is a grievous violation of the CHALR for which the maximum punished under the Regulations is justified. The ld. AR also takes us to para 2 of the impugned order to highlight that Shri K.N. Poonja, partner of the appellant in his statement had admitted that he had kept duplicate copies of GR form of the shipping bills and that he used to keep pre-signed documents in their Tirupur office. There is a duty cast upon the CHA to exercise due diligence to ascertain the correctness of the information given by the exporters and so also to verify the details of such documents of such exporter / clients. It is amply clear in the present case that the appellant has not exercised such due diligence. With regard to the contentions of ld. consultant that time limits laid down in CHALR has not been followed, ld. AR submitted that this time limit had been brought into the Regulations only with effect from 8.4.2010. He places reliance on the case law of Hon ble High Court of Andhra Pradesh in the case of Commissioner of Customs Vs. H.B. Carg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A license was issued to the proprietor, who operated through its power of attorney, caution deposit was taken by the proprietor from the power of attorney holder and in the process blank documents were signed by the proprietor without knowing importers / exporters and nature of goods imported / exported, it was held that fraudulent activities carried out by the power of attorney are to be treated as having been carried out by the CHA himself, for which revocation of license was justified. This judgment was upheld by the Hon ble Supreme Court as reported in 2002 (142) ELT A87 (SC). However, from the facts of the present case, it cannot be alleged that the partner(s) of the CHA had allowed a third party or another person to use their license for conduct of import export clearances. It is also not the allegation that appellant had handed over pre-signed export documents to an outsider for consideration. On the other hand, what has transpired is that possibly for administrative convenience, the pre-signed copies were prepared by the Head Office of the appellant at Coimbatore and were submitted to their branch office in Tirupur. Thus, though the keeping of such pre-signed blank docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess of enquiry, adjudication etc. is within 18 months. We therefore find that there are no specific periods in the CHALR 2004 before its amendment on 8.4.2010. Nonetheless, we are aghast that the proceedings, which were initiated by recording of statement of the partner of the appellant on 4.2.2004 and 17.3.2004 took almost two years further for effecting suspension under Regulation 20(2) of the CHALR 2004 on 24.1.2006. The show cause notice was issued for proposing revocation of license and forfeiture of security deposit under Regulation 20(1) of CHALR 2004 only on 27.7.2006. However, no progress after this till 10 years till the corrigendum was issued, that too, for informing change in incumbency and bringing the appellant to show cause to another adjudicating authority. The enquiry officer then issued a report on 19.9.2016 which was communicated to the appellant on 27.9.2016. It took another six months for the adjudication and issue of the impugned order dated 21.3.2017 for revocation of the license and forfeiture of security deposit. Interestingly, during the entire period, the CHA license was suspended only from 24.1.2006 to 31.8.2006 and was reviewed periodically till 7.7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellant cannot be faulted or punished in the manner it has been. 15. In these circumstances, the revocation of the appellant's CHA license is unjustified and is accordingly, set aside. The revocation of license which is in operation since 2005 i.e. almost 12 years, is itself a severe punishment and could also serve as a reprimand to the CHA to conduct its affairs with more alacrity. In these circumstances, the forfeiture of the security amount and the imposed penalty of ₹ 1 lakh also is set aside. The said amount shall be credited to the appellant's account. If the tenure of the license has expired but is otherwise extendable, then upon the appellant's application such extension would be granted as per rules. However, if an application is to be made for grant of a new license, then such an application if made, would be considered under the extant Regulations. The appeals are disposed of with the above directions. 9. In light of the discussions, herein above, we set aside the impugned order and allow the appeal of the CHA with consequential relief, if any, as per law. (Pronounced in open court on 14.12.2017) - - TaxTMI - TMITax - Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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