Custom, Excise & Service Tax Tribunal
M/S. Adarsh Clearing Agency vs Commissioner Of Customs (G) on 28 November, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
CUSTOMS APPEAL NO. 71 & 485/09 and 440/10 Mum
Arising out of Order-in-Original No. 116/2009 dated 28.01.2009 and CAO No. 40/2010/CHA/Commissioner of Customs(G)/SLM dated 22.04.2010 passed by the Commissioner of Customs, Mumbai.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri P.R. Chandrasekharan, 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?
M/s. Adarsh Clearing Agency
:
Appellant
Versus
Commissioner of Customs (G)
Mumbai
Respondent
Appearance Shri S.N. Kantawala, Advocate for appellant Shri A.K. Prabhakar, Supdt. (A.R.) For Respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri P.R. Chandrasekharan, Member (Technical) Date of Hearing : 28.11.2011 Date of Decision : 28.11.2011 ORDER NO.
Per Ashok Jindal The appellant M/s. Adarsh Clearing Agency who is a CHA has filed Appeals No. C/71 and 485 of 2009 against suspension of their CHA licence which was ultimately revoked by Commissioner of Customs (General) on 22.04.2010. Therefore, the learned Counsel for the appellant sought withdrawal of the above mentioned appeals, as the same have become infructuous.
2. The request of the learned Counsel is accepted and the above appeals are dismissed as withdrawn.
3. Appeal No. C/440/10 is against the revocation of the CHA licence.
4. Brief facts of the case are that an intelligence was gathered that three merchant exporters namely M/s. Metal Concepts (India), M/s. Flamingo Overseas and M/s. Venture Impex have shown export of stainless steel washers and other product of stainless steel under duty exemption scheme from the manufacturing unit of one M/s. Leena Ice and Cold Storage Pvt. Ltd. situated at Thane. The said three exporters have declared M/s Leena Ice and Cold Storage as their manufacturing units.
4.1 As per the data of EDI system total quantity of 213.918 MT S.S. Sheets/coils and unwrought tin ingots valued at Rs.2.34 crores were imported under DEEC Scheme by the merchant exporters. During the course of investigations Shri Surinderpal Aggarwal, Proprietor of M/s Metal Concepts and M/s Flamingo Overseas has stated that he had obtained five DEEC licence from DGFT. The export obligation has been discharged. One licence has not been utilized for any export and import purposes. In the said licence they have declared M/s Leena Ice and Cold Storage Pvt. Ltd. as their supporting manufacturer. He also stated that the goods supplied to M/s. Metal Concepts India and M/s Flamingo Overseas were only on paper and that actual supplies were not made to these companies except for the goods manufactured as trial production. Therefore, on the basis of investigation it was revealed that M/s. Metal Concepts (India) had fraudulently availed the rebate of Central Excise duty on the export of Bajaj Auto Rickshaws. The said consignments were handled by the appellant on behalf of M/s Metal Concepts (India) and M/s Venture Impex. In the statement of the appellant it has been stated that these job for clearing the export and import cargo was assigned to them by Shri Vikrant Agarwal and Mr. Ajay of M/s Venus Maritime Service who is engaged in the business of Freight forwarders & Logistics supports and most of the shipments of the above said companies under DEPB and DEEC Schemes were carried by them. Therefore, it was alleged that the appellant did not check the authenticity of the merchant exporter / importer. They have colluded with them and they have not brought to the notice of the officers of Customs/Central Excise about the diversion of the goods of the above said importer/exporters. Therefore, it was observed that the appellant has not discharged their duties as CHA and violated the provisions of CHA. The CHA licence was suspended and thereafter enquiry was conducted and the articles of charges were framed as below:
(a) As per Regulation 13(a) of the CHALR, 2004 a CHA shall obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as Customs House Agent and produce such authorization whenever required by the Dy. Commissioner of Customs or the Asst. Commissioner of Customs.
(b) As per Regulation 13(d) of the CHALR, 2044 A CHA shall advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Dy. Commissioner of Customs or Asst. Commissioner of Customs.
(c) As per Regulation 13(n) of the CHALR, 2004 A CHA shall ensure that he discharges his duties as CHA with utmost speed and efficiency and without avoidable delay.
4.2 An enquiry was conducted and report was furnished holding that the charges against the CHA were held to be proved on the basis of the enquiry report the matter was examined by the Commissioner of Customs (General) resulted in revocation of the CHA licence under Regulation 22(7) of CHALR, 2004. Therefore the appellant is in appeal before us.
5. Shri S.N. Kantawala, Advocate, learned Counsel for the appellant appeared before us and submitted that the main charge against the appellant is that they have not obtained proper authorization from the importer/exporter. He submitted that there is no prescribed format for authorization. Moreover, the Bill of Entry signed by the importer is not in dispute. If the Bill of Entry is signed by the importer who is an I.E.C. holder, therefore it is deemed that they have obtained the authorization. He further submitted that the authorization has been issued by the person who has been authorized by the importer for the clearance of the goods. The Inquiry Officer in his report has observed that the CHA has failed to obtain the authorization letter directly from two of the importing firms M/s Metal Concepts and M/s Flamingo Overseas. It is further observed by the Inquiry Officer that as per CHALR, 2004 the appellant did not verify the authenticity of the exporter/importer and also failed to verify antecedents of the exporter/importer. He only emphasized that the authorization has not been obtained directly from the importer/IEC holder.
5.1 Shri S.N. Kantawala further relied on in the case of P.P. Dutta vs. Commissioner of Customs, New Delhi 2001 (136) ELT 1042 (Tri. Del.) wherein this Tribunal has held that signature by the importer/exporter on prescribed forms of bills of entry of shipping bills is sufficient compliance of obligation of CHA to get authorization and CHALR does not prescribe that authorization has to be obtained directly from the importer/exporter. He further submitted that in similar set of facts in the case of M/s Ramji Bhanji Thakkar, CHA No. 11/371, the Commissioner of Customs (General) has revoked the order of suspension of CHA licence by forfeiting an amount of Rs.10,000/- from the security deposit and made operative their CHA licence. He further submitted that in case of Commissioner of Customs (General) vs. S.S. Clearing & Forwarding Agency P. Ltd. 2011 (263) ELT 353 (Bom.) the Honble High Court has held that it is true that the CHA should not have acted without authorization on behalf of its client but at the same time it was duty of the Customs Officer to check the authorization in favour of CHA before allowing him to act as CHA for the importer. Thus there is a contributory default on the part of the both. Under these circumstances, the CHA alone cannot be blamed and punished. Therefore, he prayed that other charges are supplementary charges to the main charge of non-obtaining the authorization from the importers. Finally, he submitted that as the CHA is out of business since January, 2009 and the punishment suffered by the CHA is sufficient and the licence of the appellant be restored.
6. On the other hand, Shri A.K. Prabhakar, Authorised Representative strongly opposed the contention of the learned Advocate and submitted that it is a case of diversion of goods cleared by the CHA. When CHA was not knowing whereabout of the importer and was not duly authorized by the importer, the CHA was involved in the diversion of the goods. He further submitted that in case of OTA Kandla Pvt. Ltd. vs. Union of India 2011 (269) ELT 457 (Guj.) wherein the Honble High Court of Gujarat has dealt with the issue and held that on the ground of breach of statutory regulations and mis conduct by misusing its licence, once decision is arrived at against CHA on these grounds taking to consideration all relevant material and following due process of law, all legal consequences of such violation/breach have to follow. Therefore, the licence of the CHA has been rightly revoked by the Commissioner.
7. We have heard both the sides at length and found that the main allegation against the CHA in the article of charge the CHA has acted in clearance of the goods without proper authorization from the importer/exporter. We have gone through the case records wherein the Commissioner has observed that in order to obtain the authorization from the importer it is necessary to ascertain the genuineness of the importer, and to verify whether the importer is actually in existence of not. Unless these facts are verified, how can a CHA ensure that he has received authorization from the companies/firms/individuals. It was also observed that the CHA has been very casual in ensuring compliance with Regulation 13(a) of CHALR, 2004. We have also examined the Inquiry Report submitted by the Inquiry Officer wherein the logistic firm has specifically submitted that the documents have been handed over to the CHA with the consent of the importer/exporter and they are paying normal charges for the work executed by the CHA. The authority letters have also been issued to the CHA on behalf of the importers. We have seen in the case of P.P. Dutta (supra), this Tribunal has observed that once the signatures are appended on the bills of entry and shipping bills forms by the importer/exporter and the CHA it should be taken to be substantive compliance of the afore stated provisions of the CHALR. Admittedly in this case there is no denial on behalf of the importer/exporter that they have not signed the bill of entry/authorization issued in favour of the CHA.
7.1 We have also examined the decision of the Honble High Court in the case of S.S. Clearing & Forwarding Agency P. Ltd. (supra) wherein the Honble High Court has observed that it is true that the CHA should not have acted without authorization on behalf of its client but at the same time it was duty of the Customs Officer to check the authorization in favour of CHA before allowing him to act as CHA for the importer/exporter. As in the case of M/s Ramji Bhanji Thakkar the Commissioner himself dropped the proceedings in similar facts. Therefore, considering the charges against the appellant is of same nature and the appellant is out of business since January, 2009 is sufficient punishment. We withdraw the order of revocation of CHA licence No. 11/940 subject to forfeiture of Rs.10,000/- from their security deposit.
8. The appeal is allowed accordingly.
(Pronounced in open Court) (P.R. Chandrasekharan) Member (Technical) (Ashok Jindal) Member (Judicial) nsk 8