Custom, Excise & Service Tax Tribunal
M/S R. N. Lall & Bros vs Commr. Of Customs (Airport & Admn.), ... on 23 August, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Cus. Appeal No.33/12
Arising out of O/O No.Kol/Cus/Airport/Admn/25/2010 dated 8.12.2010 passed by Commr. of Customs (Airport & Administration), Customs House, Kolkata.
For approval and signature:
SHRI S. K. GAULE, HONBLE TECHNICAL MEMBER
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
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 should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not? :
3. Whether His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s R. N. Lall & Bros.
APPELLANT(S)
VERSUS
Commr. of Customs (Airport & Admn.), Kolkata
RESPONDENT (S)
APPEARANCE Shri R. K. Chowdhury & Shri B.N.Pal, both Advs. for the Appellant (s) Shri S. Chakraborty, Asstt. Commr. (A.R.) for the Department CORAM:
SHRI S. K. GAULE, HONBLE TECHNICAL MEMBER DR. D. M. MISRA, HONBLE JUDICIAL MEMBER DATE OF HEARING : 06. 08. 2012 DATE OF PRONOUNCEMENT : 23. 08. 2012 ORDER NO..
Per Shri S. K. Gaule :
Heard both sides. The appellant filed this appeal against the Order-in-Original No. Kol/Cus/Airport/Admn/25/2010 dated 8.12.2010, whereby the ld. Commissioner (Appeals) has confirmed the suspension of CHA license of M/s R. N. Lall & Bros. in terms of Regulation 20 (2) of Customs House Agents Licensing Regulations, (CHALR), 2004.
2.1 Briefly stated the facts of the case are that DRI, Regional Unit, Ludhiana, intercepted two import containers pertaining to one M/s Agro Impex, Delhi, containing undeclared goods as Organ Pipe Coral (OPC) in concealment but the goods declared as Sea Shells, were recovered. OPC scientifically known as Tubipora Musica falling under CTH 05080010, are restricted items for import as per Foreign Trade Policy and prohibited under Chapter IVA of Wildlife (Protection) Act, 1972. In case of Bill of Entry No.156203 dated 11.12.09, 15.171 MT of Cypraea Annulus (Sea Shells) as against declared quantity of 22 MT were found. In case of Bill of Entry No.156153 dated 11.12.09, 9.218 MT (approx.) of Sea Shells and 4.8 MT of OPC as against declared quantity of 18 MT of Sea Shells were found. In these manner, the OPC prohibited items were found concealed in the guise of OGL items. The goods were placed under seizure on 14.12.2009 under Section 110 of the Customs Act, 1962.
2.2 On the basis of preliminary investigation conducted and the various statements and also the seizure of samples of coral from the office of one Shri Dinesh Pathania, proprietor of one M/s Sea Hawk, it was revealed that Shri Dinesh Pathania, Prop. of M/s Sea Hawk and Shri Sukhdev Singh, Assistant Marketing Manager of M/s Sea Hawk World Wide Logistic, Ludhiana were found to be facilitating the Customs clearance with the active assistance of Shri Amardeep Singh G Card Holder and Shri Sandeep Singh H Card Holder of the appellant. Shri Sandeep Singh, H Card Holder of the appellant was facilitating in lieu of illegal gratification, the clearances of import of OPC by fully knowing that the same is restricted item for import. Similarly, Shri Amardeep Singh, G Card Holder of the appellant, signed and presented import bills of entry without obtaining authorization from M/s Agro Impex. Shri Amardeep Singh and an another person, Shri Ghanshyam Sharma, G Card Holder of the appellant, were using license of the appellant on sub-letting basis by payment of Rs.10,000/-per month in violation of sub-regulation (a) and (b) of Regulation 13 of CHALR, 2004.
2.3 Vide Establishment Order No.271/2010 dated 25.10.2010, operation of CHA license of the appellant was ordered to be suspended with immediate effect in terms of Regulation 20 (2) of CHALR, 2004 and in terms of Regulation 20 (3) of CHALR, 2004, post decisional hearing was granted to the appellant and vide the impugned order dated 08.12.2010, the license was suspended in terms of Regulation 20 (2) of CHALR, 2004. The appellant filed Writ Petition No.250 of 2011 befoere the Honble High Court at Kolkata and vide its Order dated 10.02.2012, the Honble High Court directed the appellant to file appeal against the Establishment Order.
3.1 The contention of the appellant is that an incident took place at Amritsar on 11.12.2009, when M/s Agro Impex filed two bills of entry mis-declaring the imported goods in order to import OPC in the guise of Sea Shells. The contention is that there are no allegations that the declarations made in the said bills of entry are not corresponding to the documents made over by the said importer. The contention is that there is no allegation that the CHA was guilty of making any mis-declaration. The contention is that there is no allegation that the CHA is concerned with imported goods or had any interest in the said import except the charges for rendering services for filing import documents with bill of entry for clearance of imported goods. The contention is that an incident was brought to the notice by DRI vide their letter dated 8.1.10, the correspondence was duly received by the Kolkata Customs. The Commissioner of Customs, Amritsar, suspended the license of CHA on 5.2.2010 and the suspension at Amritsar is continuing, there had not been any allegation subsequent to 8.1.2010 against the appellant at Kolkata, the Commissioner of Kolkata preferred not to suspend the appellants license at Kolkata.
3.2 The contention is that CHALR, 2004 underwent amendment and provisions were made for giving an opportunity of hearing within prescribed time limit of passing order of suspension, with effect from 8.4.2004.
3.3 The contention is that DRI, New Delhi has already issued show-cause notice under Section 124 of the Customs Act, 1962 on 8.6.2010 against the importer including the appellant. The appellant and H Card Holder have been called upon to show-cause why penalty should not be imposed in terms of Section 117 of the Customs Act, 1962 on the ground that H Card Holder employees of the appellant are found to have indulged themselves facilitating clearance of the imported consignment. The contention is that there is no allegation that the appellant had any knowledge or involvement in the said import.
3.4 The contention is that Vide Establishment Order No.271/2010 dated 25.10.2010, suspension was ordered in connection with an incident which took place on 11.12.2009 at Amritsar on the ground that an inquiry is contemplated against the appellant under Regulation 22 of the said Regulations, 2004 and as such the continuation of the appellant as CHA transacting business pending such inquiry is considered prejudicial to the interest of revenue and warrant immediate action to prevent further misuse of the CHA license. The contention is that the fact, on completion of inquiry and investigation by the DRI, a show-cause notice dated 8.6.2010, has already been issued against all the concerned including the appellant has not been taken into consideration. The contention is that the allegations made in the said order, is nothing but the reproduction of allegation in the said show-cause notice.
3.5 The contention is that the inquiry with regard to the incident took place on 11.12.2009, cannot remain pending till October, 25, 2010.
3.6 The contention is that there had not been any finding in the impugned order that the appellant had committed any serious or grave offence warranting immediate suspension.
3.7 The contention is that the authority below has failed to consider the provisions made under sub-regulation (3) of Regulation 20. The contention is that the expression immediate action is followed by the expression is necessary, (within fifteen days from the date of receipt of a report from investigating authority, suspend the license) this means that there should be proximate connection between the date of occurance/incident and the date when the order of suspension is made. The contention is that in the present case, the incident took place in December, 2009, the report of the investigating agency was received by Kolkata Customs from DRI on 8.1.2010 and the order of suspension has been made on 25.10.2012, that too, without any explanation for delay and there being no subsequent incident.
3.8 In support of their contention, they placed reliance on the following decisions cited as under :
(i) B.N. thakkar & Co. Vs. CC (G), Mumbai :2011 (271) ELT 102 (Tri.-Mumbai)
(ii) Babaji Shivram Clearing & Carriers Pvt. Ltd. Vs. Union of India : 2011 (269) ELT 222 (Bom.)
(iii) K. S. Kannan & Coo Vs. Commr. of Customs, Chennai : 2008 (227) ELT 414 (Tri.-Chennai)
(iv) Crown Shipping Agency Vs. Commr. of Customs, Mumbai : 2004 (178) ELT 885(Tri.-Mumbai)
(v) P. P. Dutta Vs. Commr. of Customs, New Delhi : 2001 (136) ELT 1042 (T)
(vi) Krishan Kumar Sharma Vs. Commr. of Customs, New Delhi : 2000 ( 122) ELT 581(Tribunal)
(vii) Fairdeal Enterprises (P) Ltd. Vs. CC (Airport & Administration) : 2010 (256) ELT 545 (Cal.)
4.1 The contention of the Department is that the appellants were directly involved in the modus operandi of the illegal importation of OPC as Shri Amardeep Singh, G Card holder and Shri Sandeep Kumar, H Card Holder of the appellant were in full knowledge of the concealment of the prohibited goods in the import containers and before import, they had discussed, negotiated with the importers and others regarding the concealment of the prohibited goods and had sought payment of Rs.1,65,000/- for two containers of the goods which were prohibited as is clear from the show-cause notice dated 21.2.2012.
4.2 The contention is that Shri Amardeep Singh, G Card Holder and Shri Sandeep Kumar, H Card Holder of the appellants, in their statement, admitted that they were paying Rs.20,000/- and Rs.10,000/- per month respectively to the appellant for using their name for import and export clearances.
4.3 Shri Ghanshyam Sharma, G Card Holder of the appellant, has also admitted that he was paying Rs.10,000/- per month for using name of the appellant for import and export clearances. The contention is that Shri Sharma was shown as employee with salary of Rs.8,500/- per month, but actually Shri Sharma did not receive any salary from the appellant. On the contrary, he was paying Rs.10,000/- per month to the appellant.
4.4 Shri Nishant Kumar Singh, Authorized Signatory of the appellant firm, admitted that the appellant firm was receiving Rs.10,000/- per month in cash from these three above mentioned employees which was not reflected in CHAs Books of Accounts, whereas these three employees were shown as receiving monthly salary of Rs.8,500/- & Rs.5,500/- per month respectively. The contention is that this statement has not been retracted till date.
4.5 The contention is that in the show-cause notice issued by DRI, Ludhiana vide DRI F.No.856 (28) LDH/2009/Pt.-XI dated 08.06.2010 regarding illegal import of OPC and illegal export of goods which are prohibited goods. The appellant has been made a noticee and penal action under the Customs Act, 1962, has been proposed against them for facilitating the import and concealment of prohibited goods. The contention is that in case the present appeal is decided in favour of the appellant, it may likely to have a bearing on the investigation/proceedings initiated against the appellant. In support of their contention, they placed reliance on the Tribunals decision in the case of Fast Track International Vs. Commissioner of Customs, Chennai reported in 2011 (266) ELT 183 (Tri.-Chennai).
4.6 The contention of the Department is that the appellant is a habitual offender vide F.No.S-45-01/1979 Estt. (Pt.) dated 11.4.2008. The contention is that the notice for suspension of license was issued for offences committed by their employee and power of attorney-holders at the Mumbai Customs House. The contention is that the said notice was set aside by the Honble High Court of Calcutta vide its Order dated 23.3.2009.
4.7 The contention is that after the issuance of the show-cause notice issued vide F.No.S 45-01/1979 Estt. (Pt.) dated 21.2.2012 under Regulation 22 of the CHALR, 2004, the CHA firm did not file any reply before the Inquiry Officer till date and also did not respond to the personal hearing dates fixed in this regard on 19.06.2012, 22.06.2012 & 28.06.2012 as reported by the Inquiry Officer in this regard.
5.1 We have carefully considered the submissions and perused the records. Undisputedly, the license was suspended vide Establishment Order No.271/2010 dated 25.10.2010. The ld. Commissioner while exercising his power vested in him under Regulation 20 (2) of CHALR, 2004, has suspended the CHA license by recording the reason for which he has come to the conclusion for the said suspension with immediate effect. Thereafter, while following the principle of natural justice by way of giving post decisional hearing, he has confirmed suspension of the appellants license. He has also ordered for the proceeding for revocation of license under Regulation 20 (2) of CHALR, 2004. The net result of suspension or revocation of the license is to stop/end the operation. The ld. Commissioner in his order of continuance of suspension has disclosed evidences against the appellant justifying the suspension of CHA license. The suspension is required to be followed by an inquiry which only can establish the facts relating to the case after which the Authority can cancel the CHA license or revoke the CHA license or can revoke the suspension itself. We note that the appellants have not challenged jurisdiction of the suspending authority nor it is their allegation that the authority has acted beyond his jurisdiction.
5.2 The Honble Bombay High Court in the case of Commissioner of Customs (General) v. Worldwide Cargo Movers - 2010 (253) E.L.T. (Bom.), has observed in paragraph 28 as follows :-
In our view, the Tribunal has committed a grave error in interfering with the decision of a domestic authority. In a departmental proceeding one has to see whether the principles of natural justice are followed and the findings are Justified from material on record. Once both these aspects are satisfied if an outsider Tribunal interferes, its findings and order will be improper and perverse which is what has happened in the present case. Similarly, when one comes to the disciplinary measures, one must not lose sight 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 5.3 The Honble Madras High Court in the case of Arvind C. Bhagat v. Commissioner of Customs, Chennai - 2000 (122) E.L.T. 678 (Mad.), the CHA licence is given on the basis of confidence built by the Customs House Agent. When an agent breaches the trust reposed in him by the Department, the Department would be well justified in refusing a CHA to continue work in the Custom House. This decision of the Honourable Madras High Court has been maintained by the Honourable Supreme Court vide Arvind C. Bhagat v. Commissioner - 2001 (129) E.L.T. A191 (S.C)].
5.4 The Honble Calcutta High Court in the case of Union of India v. Shashi Deo Jha - 1999 (113) E.L.T. 385 (Cal.), reasons as regards expediency of suspending the licence immediately are required to be recorded by the authority ordering suspension. In this case we find that the order of suspension and the order of continuance of suspension, both record such reasons. Moreover, by giving post-decisional hearing and passing a speaking order, the jurisdictional Commissioner has also followed the principles of natural justice. In the cited case, the Honble Calcutta High Court has also expressed the view that once the court exercising power of judicial review is satisfied that an order does not suffer from total non-application of mind nor it is a non-speaking one, it may refrain itself from going into the merit of the matter.
5.5 In so far as the case of B. N. Thakkar & Co. (supra) cited by the appellant is concerned, no enquiry was initiated against the appellant under CHALR, 2004. Similarly, in the case of Babaji Shivram Clearing & Carriers Pvt. Ltd. (supra), the Honble Bombay High Court held that though post decisional hearing was given, but no order was passed. In the case of K. S. Kannan & Coo (supra), the Tribunal held that no enquiry was pending and no show-cause notice was issued. Admittedly, the facts are not relatable to the present case. The Tribunals decision in the case of Crown Shipping Agency (supra), is also not relatable to the present case. The decision of the Tribunal in the case of P.P.Dutta (supra) relates to revocation of license. Similarly, the facts and circumstances of the decision of the Tribunal in the case of Krishan Kumar Sharma (supra) are not relatable to this case. In so far as the decision of the Honble High Court of Calcutta in the case of Fairdeal Enterprises (P) Ltd. (supra) is concerned, the case has been referred to Division Bench and the appellant has not produced any final outcome thereof.
5.6 As already discussed, the net result of suspension or revocation of the license is to stop/end the operation. We find that the ld. Commissioner has ordered for revocation of license under Regulation 20 (2) of CHALR, 2004. and the Department has already been issued the show-cause notice vide F.No.S-45-01/1979 Estt. (Pt.) dated 21.02.2012 under Regulation 22 of CHALR, 2004. We find that the proceedings for revocation of license are on and are likely to be completed. Therefore, revoking the suspension at this stage would clearly give relief to the appellant for interim period while the proceedings for revocation of license is already on. In these circumstances, we do not have any reason to interfere with the impugned Order-in-Original and the same is upheld and the appeal is dismissed. However, keeping in view the facts and circumstances of the case, we direct the ld. Commissioner to complete the entire proceedings relating to show-cause notice dated 21.02.2012 issued under Regulation 22 of CHALR, 2004, for revocation of CHA license expeditiously preferably within three months from the date of receipt of this order. The appellant is directed to co-operate in the proceedings. Appeal is disposed of in the above manner.
(Pronounced in the open Court on 23.08.2012) Sd/ Sd/ ( DR. D. M. MISRA ) ( S.K.GAULE ) JUDICIAL MEMBER TECHNICAL MEMBER mm 9 Cus.Appeal No.33/12