Custom, Excise & Service Tax Tribunal
Peak Agencies vs Commissioner Of Customs (General) on 25 June, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. C/86847/13 (Arising out of Order-in-Original No. 29/2013/CAC/CC(G)/PKA-CHA(Admn) dated 25.02.2013 passed by the Commissioner of Customs (General), Mumbai). For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.K. Jain, Member (Technical) ========================================
1. Whether Press Reporters may be allowed to see : No
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 Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Peak Agencies
:
Appellant
VS
Commissioner of Customs (General)
Mumbai
:
Respondent
Appearance
Shri A.K. Prabhakar, Advocate, Advocate for Appellant
Shri M.S. Reddy, Dy. Commissioner (A.R) for respondent
CORAM:
Mr. Ashok Jindal, Member (Judicial)
Mr. P.K. Jain, Member (Technical)
Date of hearing: 25.06.2014
Date of Decision: .
ORDER NO.
Per : Ashok Jindal
The appellant is in appeal against the impugned order wherein their CHA licence No.11/896 has been revoked by the Commissioner of Customs (General) on 28.02.2013.
2. Brief facts of the case are that on a specific information the DRI officials detained three consignments and found that one Shri Dhirubhai Shah is using the CHA licence of the appellant for clearance of the mis-declared goods. On the basis of enquiry report, proceedings under Regulation 22 of CHALR, 2004 has been initiated against the appellant and charges were framed under Regulations 12, 13(a) and 13(d) 19(8) of CHALR 2004. After the enquiry report, personal hearing was granted to the appellant by the learned Commissioner who observed as given below:-
3. Acting on a specific information, officers of the DRI, Mumbai identified and detained thee consignments on 31.03.2003 arrived under three different Airway Bills at Air India Light Warehouse, ACC, Sahar showing consignee as M/s Peak Impex, M/s A.K. Traders and M/s Mufema Enterprises with the description of goods declared as Artificial Flowers and Key Chain suspected to contain Computer Parts, Button Cell and Electronic Goods. On further intelligence, two more consignments were intercepted by DRI at ACC on 03.04.2003 and 01.04.2003.
4. The aforesaid consignments were examined without waiting for Bills of Entry to be filed, as available intelligence indicated that the said consignments may be cleared by manipulation of Marks and Numbers on the packages or by substitution of packages. On examination of the said consignments, Intel Pentium Microprocessor and ICs (Rs.30,39,950/- CIF), Button Cell of Maxell Sony (Rs.14,81,610/-), Artificial Flowers and Game Circuit Board (Rs.5,88,720/- CIF), LCD Projectors, Data Projectors, Cameras (Rs.15,66,452/- CIF) and VCD Players, Iron Boxes (Rs.3,70,000/- CIF) were found and the said goods were seized under Panchanama dated 31.03.2003 & 01.04.2003.
5. On further investigation, statements of various persons have been recorded including Shri Dhirubhai Shah, an employee for the name sake of CHA M/s Peak Agencies, was using the CHA licence No. 11/896 of M/s Peak Agency for clearance of the said mis-declared goods and the statement of Shri Ved Kumar Kambil, Prop. Of M/s Peak Agency have also been recorded during the time of investigation.
6. Shri Ramesh Gada, Prop. Of M/s Pearl Impex in his statement dated 2.4.2003 recorded under Section 108 of the Customs Act, 1962 interalia stated that he had imported all the mis-declared consignments at ACC and cleared through Shri Dhirubhai Shah and the clearance was made through the use of CHA licence of M/s Peak Agencies. He further stated that since DRI has intercepted one more consignment he asked Dhirubhai to clear the consignment of six packages containing 240 nos. of Pentium 4 processors and 3500 nos. of key chains immediately; that on 1.4.03, Shri Ajay Patel, who ordered this consignment, came with his vehicle and took delivery of six packages. Shri Ramesh Gada was arrested on 3.4.2003.
7. Shri Dhirubhai Shah, in his statement recorded on 7.5.2003 under Section 108 of the Customs Act, 1962 interalia stated that he met Shri Ved Kumar Kambil, Prop. of M/s Peak Agencies and helped him in getting back his suspended licence by paying off his debts of Rs.56,000/-; that Shri Ved Kambil was indebted to him, Shri Ved Kumar Kambil allowed him to use his CHA licence and showed him as one of his employee so that he (Dhirubhai) could use his CHA pass; that he thereafter started using CHA licence and paid him Rs.5,000/- for the same; that he had handled the consignments of M/s A.K. Traders, M/s Muftema Enterprises, M/s Pearl Impex and M/s Dipanjali Enterprises; that he had done the clearance of all the four aforesaid firms by using the CHA licence of M/s Peak Agencies. He affirmed and confirmed that the statement of Shri Ramesh Gada was correct. He further admitted that the consignments which were cleared by him were misdeclared and Shri Ramesh Gada used to give him Rs.1 lakh for meeting all expenses of clearances and used to get his commission from the same. He was arrested on 7.5.2003.
8. Shri Ved Kumar Kambil, Prop. Of M/s Peak Agencies, CHA No. 11/896 in his statement inter-alia stated that during the time of suspension of his CHA licence, he met Mr. Bharat Bhai (brother of Dhirubhai) and the said Bharat Bhai had settled the matter with Ganpath Ingle to whom he had taken loan of Rs.42,100/- and got back his CHA licence in the year 1998; that Shri Bharat Bhai approached him for using his CHA licence on Rs.5,000/- per month; he agreed to the proposal; that in the year January 2003, CIU Customs, ACC, Mumbai had booked a case regarding under valuation against M/s Rishabh Enterprises run by Dhirubhai, brother of Bharat Bhai; that case was settled after paying a differential customs duty; that he got a wind and told Dhirubhai and Bharatbhai to stop using his CHA licence all together and surrender their Customs pass. Thereafter he revoked the CHA licence on the premise that the charges leveled have been proved. Aggrieved by the said order, the appellant is before us.
3. Heard both sides.
4. The learned Advocate appearing for the appellant submitted that with regard to Article of Charges under Regulation 12 of CHALR 2004, no licence shall be sold or otherwise transferred. At the time of investigation of DRI, Shri Dhirubhai Shah made a statement that he is using the licence of the appellant on payment of Rs.5,000/- per month. In fact, this statement was given under duress and coercing which was retracted by Shri Dhirubhai Shah within 24 hours. The said statement is not reliable in the light of the evidence produced by the appellant that Shri Dhirubhai Shah was an employee of the appellant and gets a salary of Rs.5,000/- per month. It was duly entered in the Books of Accounts and to support the genuineness of the Books of Accounts he produced the Income Tax Return which shows that the salary paid to the Shri Dhirubhai Shah as expenses by the appellant. Therefore, the charge of sub-letting of licence by the appellant to Shri Dhirubhai Shah does not proved.
4.1 The learned Advocate further submitted that the another charge against the appellant is that under Regulation 13(a) that he was not having proper authorization for clearance of the goods. In fact, all the documents including import register have been taken over by the DRI during investigation and the same have not been produced before the Inquiry Officer as well as before the Commissioner. In the absence of the said records, the appellant has not been able to produce the authority letter from the importers. When the Revenue themselves has not able to produce the required evidence which is in their custody therefore, adverse inference cannot be drawn against the appellant. He further submitted that at the time of enquiry, this fact has come on record that the records taken away by the DRI is not available with them. Therefore, this charge also stands not proved.
4.2 The learned Advocate further submitted that the Charge under Regulation 13(d) is consequently charged to Regulation 13(a). If the charge under Regulation 13(a) stands not proved therefore, the charge under Regulation 13(d) is also stands not proved.
4.3 The ld further submitted that another Article of charge against the appellant is for violation of Regulation 19(8) of CHALR 2004. The salary register and the Income Tax return for the relevant period shows that Shri Dhirubhai Shah was an employee of the appellant and the appellant was having full control over Shri Dhirubhai Shah and the said fact has been confirmed during the course of enquiry proceedings.
4.4 The ld further submitted that in the Customs proceedings, a penalty of Rs.20,00,000/- was imposed on Shri Dhirubhai Shah but the appellant was not made a party to the show-cause notice. The order of imposing penalty also has been stayed by this Tribunal observing that Shri Dhirubhai Shah has not mis-declared the goods as they have not filed Bills of Entry for clearance of the goods. As this Tribunal has already observed that the employee of the appellant i.e. Shri Dhirubhai Shah has not filed any Bills of Entry for clearance of the goods, the question of mis-declaration does not arise.
4.5 In these circumstances, the learned Advocate prays that the impugned order should be set aside.
5. On the other hand, the learned A.R. appearing for the Revenue reiterated the impugned order.
6. Considered the submissions made by both sides and perused the records.
7. With regard to the Charges leveled under Regulation 12, we find that the appellant has produced the salary certificate, Books of Accounts and the Income Tax Returns showing that Shri Dhirubhai Shah was an employee of the appellant and that facts have not been controverted by the Revenue with any supporting evidence. The learned Commissioner relied on only the statement recorded under Section 108 of the Customs Act by the DRI. The said statement was also retracted by the appellant at the earliest available opportunity within 24 hours. Therefore, the said statement cannot be relied upon. In these circumstances, we hold that the Charge under Regulation 12 of CHALR 2004 stands not proved.
7.1 With regard to the Charge leveled on the appellant under Regulation 13(a), we find that all the documents have been seized and were taken away by the DRI and the same have neither returned to the appellant nor produced during the inquiry proceedings. Therefore, the Revenue cannot take the benefit of their own wrong. As the Revenue has failed to produce the documents seized, in these circumstances, the contention of the appellant is that they were having proper authorization for clearance of the goods cannot be rebutted. In these circumstances, we hold that the Charge under Regulation 13(a) of CHALR 2004 stands not proved.
7.2 As the Charge under Regulation 13(d) is consequent to Charge under Regulation 13(a) therefore, we hold that the Charge under Regulation 13(d) also stands not proved.
7.3 Further we find that the Charge under Regulation 19(8) of CHALR 2004, the appellant was having full control over Shri Dhirubhai Shah being an employee of the appellant who was drawing salary from the appellant. Further, we find that in the proceedings initiated under the Customs Act also, the appellant was not made to a party. Moreover, the penalty of Rs.20,00,000/- imposed on Shri Dhirubhai Shah has been stayed by this Tribunal on the premise that the appellant has not filled Bills of Entry for clearance of the goods Therefore, the question of mis-declaration of goods does not arise. In these circumstances, we hold that the Charge under this Regulation also stands not proved.
8. As all the Charges leveled against the appellant stands not proved therefore, we set aside the impugned order revoking the CHA licence No. 11/896 with immediate effect. The appeal is allowed in the above terms with consequential relief.
(Order pronounced in Court on.) (P.K. Jain) Member (Technical) (Ashok Jindal) Member (Judicial) nsk Per : P.K. Jain
9. I have gone through the order recorded by my learned Brother. However, on certain Charges my views are different as per the details given below.
10. As far as the Charge under Regulation 12 of CHALR 2004 is concerned I agree with the conclusion drawn by my learned Brother. However, I would like to add that the learned Commissioner has relied upon the statements recorded under Section 108 of the Customs Act by the Directorate of Revenue Intelligence (DRI) on 07.05.2003 and 24.06.2003 of Shri Dhirubhai Shah. Only the statement dated 7.5.2003 has been retracted and that also on 12.5.2003. There is no evidence that statement dated 24.6.2003 was ever retracted. Commissioner has relied upon the statement of Shri Ved Kumar Kambil dated 09.05.2003 and that of Shri Ramesh Gada dt. 2.4.2003 and 3.4.2003. There are no evidence that the said statements were retracted. However, keeping in view of nature of the charge and the fact that the appellant has produced the income tax return and other documents as against the oral statement by the Revenue, which are not supported by further investigations and regarding financial flow or statements from various clients benefit of doubt has to go to the appellant and thus in my view also the Charge under Regulation 12 of the CHALR, 2004 stands not proved.
11. The 2nd Charge against the appellant is for violation of Regulation 13(a) of CHALR, 2004. The appellant has not given any details about the seizure of the documentsfrom his office/possession by DRI. It is also not clear when the documents were taken away by the Directorate of Revenue Intelligence and whether he has lodged protest or put in writing the details and whether such documents included authorization letters. In the absence of these detail, the question of returning the same to the appellant does not arise. Moreover, DRIs file was inspected and no such authorization letter seems to have been found. As per the Regulation 13(a), a Custom House Agent shall obtain an authorization from each of the companies, firm or individuals by whom he is for the time being employed as Customs House Agent and produce such authorization whenever required by the Deputy or Assistant Commissioner of Customs. Appellant has not been able to produce the said authorization. Their claim that such documents were taken away by the DRI is without any basis. There is no seizure memo or any other evidence to support the said contention. On the contrary, Shri Ved Kumar Kambil in his statement has stated that no authorization was obtained by him. It is also noted that after inquiry was over and during the personal hearing before the Commissioner, the appellant produced duplicate copy of the so called authorization. It is not understood why the appellant could not get produced the duplicate copies of the said authorization for 8 - 9 years. I also note that barring M/s. Pearl Impex all other addresses (M/s A.K. Traders, M/s Mufena Enterprises and M/s Dipanjali Enterprises were found to be fictitious. The said firms were not existing at addresses given in IEC Code. Keeping in view these facts, I hold that the Charge under Regulation 13(a) of CHALR, 2004 stands proved.
12. The 3rd Charge is under Regulation 13(d) of CHALR, 2004. As per the said Regulation, Customs House Agent shall advise his clients to comply with the provisions of the Customs Act, 1962, and in case of non-compliance, shall bring the matter to the notice of the Deputy/Assistant Commissioner of Customs. Since I am holding the Charge under Regulation 13(a) is stand proved and in view of the findings of the Commissioner in para 33 of the impugned order, I hold that the Charge under Regulation 13(d) also stands proved.
13. The fourth Charge under Regulation 19(8) of CHALR, 2004. Regulation 19(8) of CHLAR, 2004 provides that a Customs House Agent shall exercise such supervision as may be necessary to ensure the proper conduct of any such employees in the transaction of business as agents and be held responsible for all acts or omissions of his employees. As far as this charge is concerned; the fact that in the proceedings initiated under the Customs Act, the appellant was not made a party is of no consequence in as much as in the views of the investigator, it was Shri Dhirubhai Shah who had done all the manipulation and the appellant has sub-letted his CHA licence. Moreover, the fact that this Tribunal has stayed the recovery of penalty of Rs.20,00,000/- on Shri Dhirubhai Shah is of no consequence as it is only a prima facie view and is not a final order. Moreover the action proposed against the appellant is not relating to the consignment seized by the Customs/DRI but is also in relation to past conduct. In my view the CHA has failed to make effective supervision of his employee Shri Dhirubhai Shah and the charge against the appellant under Regulation 19(8) stands proved.
14. In view of the fact that three charges stands proved, invocation of the CHA licence and forfeiture of the entire amount of security is in order.
(P.K. Jain) Member (Technical) Difference of Opinion In view of Difference of Opinion in Member (Judicial) and Member (Technical), the matter may be referred to the President to nominate a 3rd Member to resolve the following issues:-
1. Whether in the facts and circumstances of the case the charges leveled against the appellant under Regulations 13(a), 13(d) and 19(8) of the CHALR, 2004 are stands proved or not.
2. If the charges are proved, in that case, the punishment suffered by the appellant is sufficient in the facts and circumstances of the case.
(P.K. Jain) Member (Technical) (Ashok Jindal) Member (Judicial) ??
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