Custom, Excise & Service Tax Tribunal
M/S.H.K.Dass & Co vs Commissioner Of Customs(Airport & ... on 21 February, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.Cus.Ap.240/2011
(Arising out of Order-in-Original No.KOL/CUS/AIRPORT/ADMN/2011 dated 30.05.2011 passed by the Commissioner of Customs(Airport & Admn.), Kolkata.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI S.K. GAULE, MEMBER(TECHNICAL)
HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL)
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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.H.K.Dass & Co.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Customs(Airport & Admn.), Kolkata
Respondent (s)
Appearance:
Shri Ramesh Chowdhury, Advocate & Shri B.N.Pal, Advocate for the Appellant (s) Shri S.Chakraborty, A.C.(A.R.) for the Respondent (s) CORAM:
Honble Shri S.K. Gaule, Member(Technical) Honble Dr. D.M. Misra, Member(Judicial) Date of Hearing:- 21.02.2012 Date of Pronouncement :-
ORDER NO.
Per Shri S.K.Gaule.
1. Heard both sides.
2. Appellant filed this appeal against order-in-original No. KOL/CUS/AIRPORT/ADMN/2011 dated 30.05.2011 whereby ld.Commissioner confirmed the order vide which the licence of the appellant was suspended in terms of regulation 20(2) of CHALR, 2004.
3. Briefly stated the facts of the case are that DRI, Ludhiana vide their letter DRI F.No.856(11)/Ldh/2010/PT II 1386 dt.15.4.2011 informed the Commissioner of Customs, Kolkata that a case being investigated against Delhi based importer Shri Mukesh Khurana of M/s. Classic Spares, Shri Vicky Suri of M/s. Jupiter Tools Corporation and Shri Joginder Singh who were using the IEC code No. of one Shri Manjit Singh, son of proprietor of the firm on paper but actually he used to run a cattle feed store and who had given blank authorization letter to Shri Shashi Ranjan Kumar, G.Card holder of the appellant to represent before customs as imports made in the name of his firm. The sub-regulation (0) of Regulation 3 of CHALR inserted by Notification 30/10-CUS(NT) dated 28.4.2004. The appellants licence was suspended vide establishment order No.127/2011 dated 04.05.2011 with immediate effect under regulation 20(2) of CHALR, 2004. Thereafter post-decisional hearing was granted to the appellant to decide as to whether the suspension order should be allowed to continue or otherwise. Thereafter ld.Commissioner confirmed the order of suspension of CHA licence of the appellant. Aggrieved by the same the appellants are in appeal.
4.1.1 The contention of the appellant is that the licence has been suspended under regulation 20(2) of CHALR, 2004 in violation of sub-regulation (0) of regulation 13 and 13B of CHALR, 2004 on the ground that the continuation of business by the appellant will be prejudicial to the interest of investigation into the case. The Commissioner of Customs however held that in view of the above immediate action under regulation 20(2) of CHALR, 2004 is warranted to prevent further misuse of CHA licence and to access to customs area of the said CHA firm and its employees/unauthorized person whom the CHA has authorized in the matter i.e. in connection with the import of M/s.MKD Road Carriers, Ludhiana. The contention is that long before the date of impugned orders the appellants had admittedly closed its business at Amritsar commissionerate and so far Kolkata commissionerate is concerned there had not been any allegation either against the appellants or any of its employees at Kolkata.
4.1.2 The contention is that the date, of incident, having nexus with the impugned order and for exercising any extraordinary power for immediate action, has not been disclosed to the appellant.
4.1.3 The contention is that at the time of post-decisional hearing on 18.05.2011 the hearing was granted without making available to the appellant the relied upon documents.
4.1.4 The contention is that Regulation 20(2) starts with non-obstant clause which can be invoked in extra-ordinary circumstances not covered by Regulation 20(1) or Regulation 21 of CHALR, 2004. Regulation 20(2) can be invoked subject to two conditions: (i) in appropriate cases where immediate action is necessary and (ii) An enquiry is pending or contemplated. However, in the establishment order there is neither any material showing the case to be a appropriate case whether immediate action is necessary and whether any enquiry is pending or contemplated. The establishment order merely stated that enquiry is warranted and immediate action is warranted. The contention is that thus the order is bad in law and in support of their contention they placed reliance on the judgement of Honble Supreme Court in the case of Jayalalitha vs. UOI and Another 1999 (005) SCC 0138 (SC). Similarly in case of expression immediate action without mentioning the date of incident amounts to mechanical exercise on the part of the ld.Commissioner and which runs a counter to the spirit and object of the regulation 20(1) and 20(2) of CHALR, 2004. In support of their contention they placed reliance on the following decisions :-
a) Kamal Kumar Agarwal vs. UOI 2004 (171) ELT 301 (Cal)
b) Ganesh Shipping Agency v. CC(Chennai) 2008(222)ELT536(Tri-Chennai)
c) International Cargo Services v. UOI- 2006 (193)ELT 546 (Del.) 4.1.5 The contention is that the allegation of transfer of licence is not correct since Shri Shashi Ranjan Kumar and Shri Mahesh Kumar were issued G-Card by Amritsar Customs and they were the employees of the appellant. The contention is that the seller of the licence of those employers as such is ex-facie contrary to the own admission to the department. There had not been any transfer or sub-let of licence in the present case. The appropriated statement relied upon by the department without complying to the mandatory requirement under section 138B of Customs Act, 1962 is unwarranted and uncalled for. They placed reliance in the case of UOI vs. A.S.A. Kabir 2011 (272) ELT 497 (Mad.).
4.1.6 The contention is that reference and reliance upon purported Show Cause Notice issued under regulation 22 of CHALR as also the particulars of imports under the same amounts to assigning fresh reason and thus the reason in the impugned order cannot be improved upon by the said appropriated Show Cause Notice or otherwise.
4.1.7 The contention is that their appeal is against order under regulation 20(2) and 20(3) of CHALR, 2004 in terms of provisions of regulation 20(2)/8 of said regulation. The proceedings for revocation of independent proceedings having no bearing on the order of suspension. Department is free to set up inconsistent grounds in the said two independent proceedings. The proceedings is sought to be initiated by the department under regulation 22 is not the subject matter of instant appeal.
4.1.8 The contention is that violation of regulation 13(0) of CHARL, 2008 is not sustainable since it is nobodys case that IEC No.3008007244 of the importer is fake or the particulars of the import including identity of the client and functioning of the client at the declared address was also not in issue. The department case was only that IEC code was not examined or was not looked into at the time of filing of the bills of entries.
4.2 Vide their letter dated 23/3/12 the advocate of the appellant also filed further submission in continuation of their written notes submitted on 1/3/12 which is reproduced below:
In continuation to the written notes submitted on 01.03.2012 in the aforesaid appeal, further submission of the appellant is as follows:-
The proceedings against the appellant have been initiated in connection with a case where M/s. M.K.D. Road Carriers, Ludhiana having I.E. Code No. 3008007244 has permitted others to import in the name of M/s. M.K.D. Road Carriers. According to the department, such transaction was not permissible in the law and the said other parties importing in the name of M/s.M.KD. Road Carriers could not succeed in such import in the event the applicant having followed his obligation under CHALR, 2004.
It is submitted that it is now settled law that there is illegality on prohibition in importing goods as name lender.
In this connection, reliance is placed on the decision in the case of Proprietor, Carmel Exports & Imports- Vs.-Commr. of Customs, Cochin reported in 2012 (276) E.L.T.505 (Ker.), copy enclosed.
5.1 The contention of the department is that department had already submitted the copies of Show Cause Notice dt.21.12.2011 issued vide file No.S-22-59/60 ESTT(PT) by the Commissioner of Customs (Airport & Admn.), Customs House, Kolkata under regulation 22(1) of CHALR, 2004 to the appellant along with copies of the relied upon documents from which it is clear that the incident took place in the year 2009-2010. The contention is that since the Commissioner of Customs (Airport & Administration), Customs House, Kolkata has already initiated proceedings against the Appellant CHA vide the SCN as above, therefore the same may kindly be allowed to be completed at the earliest after following the principles of natural justice and after affording the Appellant CHA sufficient opportunities of personal hearings etc. Its is further humbly submitted that in case the present Appeal is decided in favour of the Appellant, then it may likely to have a bearing on the proceedings initiated against the Appellant vide the SCN. In support of their contention they placed reliance on the following decisions :-
a) Sindhu Cargo Services Ltd.V.CC,Coimbatore2006(196)ELT51(Tri.-Chennai)
b) Sindhu Cargo Services Ltd.V.CC,Coimbatore-2006(203)ELT 218 (Mad.) 5.2 Ld.A.R. vide his letter dated 29.03.2012 filed written submission reiterating their earlier submission filed on 01.03.2012 and have also placed reliance on the two decisions namely M/s.Fast Track International Vs. Commr. Of Customs, Chennai 2011 (266) ELT 183 (Tri.Chennai) and M/s.Sindhu Cargo Services Ltd. vs. Commr. of Customs, Coimbatore 2006 (196) ELT 51 (Tri.-Chennai).
6.1 We have considered the submissions and perused the record. We find that Shri Shashiranjan Kumar, G-Card holder (I Card No.104/10) of M/s.H.K.Dass & Co. for Delhi in his statements dated 27.07.2010 and 28.07.2010 had admitted the lapses on their part by not following KYC Norms as required by him in terms of the CBEC s Circualr No.9/2010-Customs dated 08.04.2010 and as per the requirements under the sub-regulation (o) of regulation 13 of the Customs House Agents Licensing Regulations, 2004. He also stated tht he used to pay Rs.25,000/- per month in cash to M/s.H.K.Dass & Co. for using their CHA license. He also admitted that he had violated the provisions of Customs House Agents Licensing Regulations, 2004. He further arranged the transportation of illegally imported goods to Delhi. Thus, Shri Shashi Ranjan Kumar has connived with the importers of Delhi to make imports in the name of dummy front cover firm M/s.MKD Road Carriers, Ludhiana.
6.2 Shri Mahesh Kumar, G-Card holder (I Card No.16/2008 dated 18.07.2008) of M/s.H.K.Dass & Co. for Ludhiana in his statement dated 28.07.2010 has also admitted that he never checked the genuineness of the documents/never verified the IEC Number/identity of the client or his authenticity which was required as per the guidelines issued under CBEC Circular No.9/2010-Customs dated 08.04.2010 and as per the requirements under the sub-regulation (o) of regulation 13 of the Customs House Agents Licensing Regulations, 2004. He also admitted that he had violated the provisions of Customs House Agents Licensing Regulations, 2004.
6.3 Shri Kirti Kumar Shah, Partner of CHA firm M/s.H.K.Dass & Co. in his statement dated 13.04.2011 had admitted that he had subletted his license in lieu of Rs.25,000/- per month to Shri Shashi Ranjan Kumar and Shri Mahesh Kumar for transacting business at Delhi and Ludhiana as CHA. He also admitted that he had violated the provisions of Customs House Agents Licensing Regulations, 2004.
6.4 The appellant could not produce any evidence before ld.Commissioner regarding retraction of statement given by the partner of CHA nor they could produce any such evidence before us. It is pertinent to mention here that what is admitted need not to be proved. As regards the contention of the appellant that the incident is prior to introduction of Rule 13 (O), undisputedly there are certain consignments which are of a subsequent to introduction of Rule 13 (O) Therefore the contention is not valid. Thus we find that the Commissioner has satisfied himself that the suspension was necessary in the facts and circumstances while taking the decision on 04.05.2011 and 30.05.2011.
6.5 The net result of suspension or revokation of the license is to stop/end the operation. We find that the Department has already issued the show cause notice dated 21/12/2011 under Regulation 22 (1) of CHALR 2004 for revokation of the license and the proceedings 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 proceeding for revokation of license is already on.
6.6 This Tribunal in the case of M/s.Fast Track International (supra) held that :-
24.5 The staying of the operation of the suspension clearly gives the relief, which is sought for in the appeal itself. If, after finally having the appeal, it is concluded that CHA licence deserves to be suspended, the same would lead to undue benefit bestowed on the applicant during the interim period.
6.7 Therefore 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 SCN Dated 21.12.2011 issued under regulation 22(1) of CHALR issued for revokation of CHA license expeditiously preferably within 4 (four) months from the date of receipt of this order. The appellants are directed to co-operate in the proceedings.
(Pronounced in the court on 16.04.2012.) Sd/ sd/ (D.M.MISRA) (S.K. GAULE) MEMBER(JUDICIAL) MEMBER(TECHNICAL) sm 10 Appeal No.Cus.Ap.240/2011