Custom, Excise & Service Tax Tribunal
M/S P.V. Cargo Carriers Pvt. Ltd vs Cc (General), New Delhi on 16 March, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV DATE OF HEARING : 16/03/2016. DATE OF DECISION : 16/03/2016. Customs Appeal No. 50741 of 2015 [Arising out of the Order-in-Original No. 12/NK/POLICY/2015 dated 18/02/2015 passed by The Commissioner of Customs (General), New Custom House, New Delhi.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s P.V. Cargo Carriers Pvt. Ltd. Appellant Versus CC (General), New Delhi Respondent
Appearance S/Shri B.L. Narsimhan and Abhas Mishra, Advocates for the appellant.
Shri Sanjay Jain, Authorized Representative (DR) for the Respondent.
CORAM : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No. 51084/2016 Dated : 16/03/2016 Per. B. Ravichandran :-
The appellant is a Customs House Agent (CHA) licenced for transacting Customs Clearance Work since 1998. They have filed a bill of entry in July 2012 on behalf of M/s Kohinoor Enterprises for import of certain chemicals through Air Cargo Complex, New Delhi. The chemical was declared as 2.2.4.4. tetrahydroxybenzophenone (intermediate chemical for pesticide). Based on certain intelligence the officers of SIIB ACC, New Delhi drew sample of the consignment and got it tested in Central Insecticide Laboratory, Faridabad. After testing it was reported that the sample contains 87.95% of oxyfluorfen which is a pesticide. Import of such pesticide requires licence under Section 17 of Insecticide Act, 1968. Further proceedings were initiated against the importers for confiscation of the goods and for imposing penalty. The appellant also was issued show cause notice under Customs Act. The allegation against the appellant is that they have not fulfilled the obligation of a Custom House Agent as required under Regulation 13 of Custom House Agent Licencing Regulation, 2004, in as much as they have failed to verify the antecedents, identity of their client and functioning of their client at the declared address by using reliable, independent, authentic documents, data or information. Due to this commission or omission, they have dealt with the goods which are liable to confiscation and hence the appellant are liable for penal action under Section 112 (a) (b) of the Customs Act, 1962. The case was adjudicated by the Additional Commissioner, Air Cargo Complex (Import), New Delhi vide his order dated 21/10/2014.
2. The Original Adjudicating Authority recorded the following finding with reference to allegations made against the appellant:-
26. Now, I come to the role played by M/s P.V. Cargo Carrier Pvt. Ltd. (CHA firm). I find that the CHA in the instant case was obligated to fulfill the KYC norms for their clients and on this front I find that the CHA had performed their duty. No findings have been given in the SCN that the CHA had not complied with the KYC norms. It was not the case that the Importer was not available or the importers address or particulars mentioned in the Bill of Entry were not found or were found wrong. I thus find that no case is made out against the CHA for imposing penalty under clause (a) or (b) of Section 112 of the Customs Act, 1962.
3. Accordingly, the Original Authority found no reason to impose penalty on the appellant in terms of Customs Act, 1962. However, a show cause notice dated 01/02/2012 was issued by the Commissioner of Customs (I&G), New Delhi to the appellant, proposing revocation of their CHA licence and forfeiture of security deposit for contravention of provisions of Regulation 13 (d), 13 (o) and 19 (8) of Custom House Agents Licencing Regulation 2004. An enquiry was conducted by Assistant Commissioner of Customs who submitted his enquiry report on 03/12/2014. After due process, the Commissioner revoked the licence of the appellant and ordered the forfeiture of whole amount of security deposit of Rs. 75,000/-. Aggrieved by this order the appellant is before us.
4. We have heard both the sides and perused the appeal records. The point for decision is the correctness of the impugned order regarding revocation of licence and forfeiture of security deposit of the appellant. The Original Authority concluded that the appellant did not advice their client to ascertain that the chemicals are required to be cleared relying upon the chemical composition and in case of difficulty, it can be done by drawing samples of the chemicals before hand. The Original Authority concluded that it is evident that the appellant did not advice their client that the chemicals are to be properly described/classified and supported by proper documents. It was also concluded that the appellant or their G Card holder did not report anything to the Deputy/Assistant Commissioner. The Original Authority proceed to conclude that this establishes that the appellant have actively connived with the importer under reference in their illegal and nefarious activities.
5. Before actually proceeding with the merits of the case, we find the conclusion of the enquiry report, the reasoning of the Original Authority are incoherent and inconsistent with each other. The Original Authority reproduced the conclusion of the enquiry report which states that the appellant failed in ascertaining the correctness of information furnished by client with reference to the work relating to clearance of Cargo, and also in verifying antecedent, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. Thus, the CHA was found responsible for all acts or omission in this regard. We find apart from mere reproduction of the wordings of the provisions of CHALR substantial portion of the conclusion in the enquiry report is totally contrary to the finding of the Original Authority vide order-in-original dated 21/10/2014. The relevant portion of the finding of the Original Authority in respect of proceedings under Customs Act has been reproduced (supra). To the extent that the appellant has not complied with the KYC norms with reference to client stands resolved by a clear finding by the Adjudicating Authority. A contrary conclusion drawn in the enquiry report prepared after the said adjudication order is not sustainable.
5. The other main allegation against the appellant is that they did not advice their client properly relating to importation of chemicals. We find that with this observation, Original Authority concluded that the appellant has actively connived with the importer under reference in their illegal and nefarious activities. We find such summary and serious conclusion has been drawn without any basis or evidence. Even if it is conceded that the appellant could have put in more efforts to explain to the clients the various conditions with reference to import of chemicals, such omission by itself cannot lead to a conclusion of active connivance which is a positive misconduct. The appellant obtained all the documents and filed the bill of entry based on the documents submitted by the importer. It is only on test by a competent laboratory the actual nature of the chemical could be found. We find that the appellant followed normal business practice in verifying the clients background like address, IEC Code etc. and filed the bill of entry based on documents submitted by the importer. We find that the appellant cannot be put to extreme action, like revocation of licence in the absence of evidence of misdemeanor on their part. In the present case, we find no sufficient cause for such extreme action. Accordingly, we set aside the impugned order and allow the appeal.
(Operative part of the order pronounced in the open court.) (Archana Wadhwa) Member (Judicial) (B. Ravichandran) Member (Technical) PK ??
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