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TMI Blog2018 (1) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... des. Statements were recorded from Shri K.N. Poonja, partner of the appellant, wherein it was deposed inter alia that Shri Ranganathan, his staff, used to attend to export clearances at ICD Tirupur on behalf of the appellants; that he used to sign the shipping bills and bills of entry; that he did not have any contact with any exporters and had kept duplicate copies of GR forms of the shipping bills since the exporters had not taken them; that he had not seen the exporters and he had no idea about their whereabouts; that he used to keep pre-signed documents in his Tirupur office; that his staff Ranganthan had misused the pre-signed documents; that he was aware of the provisions of the Goods and Services Regulation 2000 as to the submission of the GR forms to the authorized foreign exchange dealer within 21 days of export; that he was not informed of the non-delivery of GR forms to exporters; that in respect of certain exporters they have not recovered Bill of Lading and that usually a copy of Bill of Lading was collected for filing of drawback claims and that he did not have any contact with exporters directly. It therefore appeared to the department that appellants had transacted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant also registered a complaint with the Police department on 5.2.2004, for misuse of appellant's pre-signed documents. 2.5 The drawback fraud was perpetrated by certain unscrupulous individuals with the connivance of customs officials and an employee of the appellant because of which the appellant had no occasion to verify the bonafide nature of the exporters. The exporters did produce valid IEC codes and bank account numbers. 2.6 Subsequently, only in the year 2010, KYC norms were introduced to prescribe guidelines for CHAs to verify the reliability of the clients. Thus, there was no established procedure for verification of antecedents of the importer or exporter prior to 2010. 2.7 The said employee had acted on his own and the appellant had no role or knowledge of the offence. On coming to know of the offence, the appellant lodged a complaint with the police authorities against the said employee. 2.8 The appellant cooperated with the investigation and in the case registered by the police department, no charges were levied against them and they were arrayed only as prosecution witnesses. Also no proceedings were initiated against the appellant for any violation under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maximum penalty of revocation of the license. 4. We have heard both sides and have gone through the case records. 5.1 Without doubt, the appellants were the CHA in respect of the exporters involved in 62 shipping bills wherein the BRCs were found to be fake and the exporters themselves have been found to have obtained IE Codes by giving non-existent addresses. In such circumstances, the needle of suspicion would also ordinarily fall on the CHA as one who had plausibly connived or at least abetted in the fraud. However, from the facts, what emerges is that there is no allegation that the appellants themselves were hand-in-glove with the fraudulent exporters. Appellants had only opened a branch office in Tirupur to cater to the ICD / CFS which were located there. Pre-signed shipping bills or bills of entry were kept in the Tirupur office for use by the staff working there. From the facts, it is also not disputed that one Mr. Ranganathan, an employee of their Tirupur branch had misused such pre-signed documents and was ostensibly in league with the exporters filed the export documents in their name and facilitated the fraudulent claims of drawback. 5.2 The ld. AR for the departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff. True, one of the appellant's own employee at Tirupur Shri Ranganathan was implicated as the person who facilitated the fraudulent claim of drawback by the exporters by making use of such pre-signed export documents. Nevertheless, there is nothing on record to insinuate that Shri K.N. Poonja, partner or for that matter any of the other partners of the appellants were fully in the know ab initio, of the entire modus operandi of the said exporters or that Shri Ranganathan acted at the behest or in conspiracy with the said partner(s). There is also no allegation that the appellant themselves received any sums or money or other consideration in addition to their normal CHA fees, for the purpose of facilitating such fraud. While the appellants cannot escape responsibility for the acts of Shri Ranganathan by the doctrine of vicarious liability, the question that comes up is whether the punishment that ought to be given to the CHA for such vicarious liability should only be revocation of license. In our considered opinion, the answer thereof is resoundingly in the negative. 6. It is also kept in mind that even in the CBI proceedings that have been launched against the exporters et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.4.2010, there was no specificity in completion of the process initiated against the CHA, had to be completed, nonetheless, by no stretch of imagination a period of 10 years of period of delay cannot be justified. 7. In the circumstances, 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. While arriving at this conclusion, we draw sustenance from the following case laws:- (a) M/s. Falcon Air Cargo & Travel (P) Ltd. - 2002 (141) ELT 284 (Tri. Del.) wherein the Tribunal held that there is no case for revocation of CHA's license if the CHA was not aware of the fraud committed by their employees. (b) Lohia Travel and Cargo Vs. CC, New Delhi - 2001 (129) ELT 668 (Tri. Del.) wherein the Tribunal has held that if the Director is not aware of the fraud committed by the employee, revocation of the CHA license is a grave punishment. (c) P.V. Cargo Carriers P. Ltd. Vs.CC (General), New Delhi - 2016 (337) ELT 586 (Tri. Del.) wherein the Tribunal held that no extreme action should be taken in the absence of any misdemeanor. 8. The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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