Custom, Excise & Service Tax Tribunal
M/S. Dhl Lemuir Logistics Private ... vs The Commissioner Of Customs on 14 March, 2011
THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT BANGALORE Appeal No: C/2275/2010 (Arising out of Order-in-Original No: 1/2010 dated 26.10.2010 passed by the Commissioner of Customs, Bangalore.) 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 their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. DHL Lemuir Logistics Private Limited Appellant Vs. The Commissioner of Customs Bangalore. Respondent
Appearance Shri Prakash Shah, Advocate for the appellant.
Smt. Sudha Koka, SDR for the revenue.
CORAM SHRI M. V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) SHRI P. KARTHIKEYAN, HONBLE MEMBER (TECHNICAL) Date of Hearing: 25.11.2010 Date of decision: 14.03.2011 FINAL ORDER No._______________________2010 Per Shri P. Karthikeyan This is an appeal filed M/s. DHL Lemuir Logistics Private Ltd. (DHL), a custom house agent (CHA) whose licence has been suspended under Regulation 20 (2) of Custom House Agents Licensing Regulations, 2004 (CHALR) vide the impugned order passed by Commissioner of Customs, Bangalore. Facts of the case in brief are that DHL used to handle clearance of consignments of tyres imported by M/s. Michelin India Tyres Pvt. Ltd. (MITPL) from China, Thailand etc. through Nhava Sheva port. Government imposed Anti Dumping Duty (ADD) on such consignments of tyres originating from, inter alia, China and Thailand under Notification No.12/2010 Cus. dated 19.02.2010. Rate of ADD varied depending also on the particular producer and exporter. Authorities at Nhava Sheva port found that DHL knowingly filed shipping documents showing M/s. Michelin Asia Pacific Import Export (HK) Ltd., Hong Kong (MAPIEHK) as exporter whereas the corresponding original documents had shown the exporter to be Transityre,BV,Netherlands(TBV). Other factors remaining same when MAPIEHK was shown as exporter entitled the consignment for assessment of lower ADD. Thus DHL facilitated the importer clear consignments of tyres on payment of a lower rate of duty not admissible to the goods and evade significant amount of duty.
2. The Commissioner of Customs (Export) Jawaharlal Nehru Custom House, Nhava Sheva vide letter dated 20.10.2010 had informed the Commissioner of Customs (General) New Custom House, Mumbai that a case of evasion of ADD by MITPL involving willful suppression of facts, mis-statement, manipulation of documents based on advice given to the importer by DHL had been detected. DHL had violated the code of conduct prescribed under CHALR. Pursuant to the above report, the Commissioner of Customs (General), Mumbai vide Order No.25/2010 dated 22.10.2010 prohibited DHL from transacting any CHA related business in Mumbai Custom Zone I, II and III with immediate effect invoking Regulation 21 of CHALR. Vide the order impugned before us, the Commissioner observed that the CHA had full knowledge of manipulation of documents submitted to customs, had in their possession copies of original and manipulated documents and had advised the importer to evade payment of ADD. CHA had violated Regulation 13 (d) of CHALR in as much as they had failed to advise their client to comply with the provisions of the Customs Act 62 (the Act). It was evident to him that DHL had willfully manipulated the invoice, packing list, sea way bill and bill of lading in order to evade payment of ADD. By withholding original and manipulated documents, the CHA had failed in discharging its obligation under Regulation 13(d), 13(e), 13(n) and 19(8) of CHALR. Pending enquiry contemplated against DHL under Regulation 22 of CHALR and finding continuance of the CHA in transacting business prejudicial to the interest of the revenue, the impugned order was passed suspending the license of the CHA to prevent further misuse.
2.1 Considering the representation made by it before the Honble High Court of Mumbai that the appellant had obtained authorizations from several clients and the suspension of the licence would inconvenience a large number of its clients and damage its reputation in the international market, their Lordships of the Honble High Court of Mumbai allowed DHL to operate for 15 days from the date of the order on the basis of authorizations already issued or given in its favour by its clients up to 26.10.2010. The Writ Petition filed before the Honble High Court of Mumbai is pending disposal. Vide Stay Order No.857/2010 dated 15.11.2010, this Tribunal stayed the operation of the impugned order till the disposal of the appeal filed by DHL.
3. In the appeal filed before the Tribunal, the impugned order is assailed on the following grounds.
3.1 The impugned order was based on the order of the Commissioner of Customs (General), Mumbai without conducting an independent enquiry into the facts and circumstances of the case. The said order had been passed in violation of the principles of natural justice. The adjudicating authority had relied on an order of the Commissioner of Customs (General), Mumbai which was similarly passed without hearing the appellant. Immediate suspension was a drastic action and no exceptional circumstances existed warranting such an order. The impugned order recorded details of the correspondence within the organization which clarified the correct provision of the notification prescribing ADD which applied to the goods involved and the correct course of action required to be followed by the importer. The impugned order wrongly ordered suspension of the licence. The Commissioner relied on a statement of Shri Sanjeev Nayak (Manager Supply Chain) of MITPL as per which changes in the documents had been made after discussion with the appellant. This statement was not substantiated nor the appellant given an opportunity to cross-examine him. The impugned order wrongly held that the appellants were aware of the corrections carried out in India by the importers. The Commissioner wrongly found that the documents seized from the computer of the appellants were original (one set) and manipulated (another set). The customs authorities had released the consignment against the shipping documents produced by the CHA. The allegation that the appellants had full knowledge of the manipulation and was aimed at evading due amount of ADD was an error. The finding that the appellants had advised the importer to evade ADD was also false. There was no basis for holding that the appellant had violated Regulation 13 (d) of CHALR and colluded with the importer in perpetrating fraud. The finding that the appellant had failed in discharging its obligations as required under Regulation 13(d), 13(e), 13(n), 19(8) of CHALR was incorrect. No ground was made out to justify recourse to immediate action against the CHA. The appellants employed 400 persons in their organization and cleared 15000 shipments every month on an average and were paying customs duty aggregating Rs.2500 crores per annum. The impugned order suffered from the vice of non-application of mind and severely affected the business of the appellant and its infrastructure including the employees.
4. During hearing, the learned counsel for the appellant submitted that the finding of the Commissioner that the appellant had violated Regulation 13 (d) and perpetrated fraud by manipulating documents was without evidence. The impugned order was passed following the order of the Commissioner of the Customs(General), Mumbai which recorded that the importer had tampered the shipping documents in his office after discussion with DHL(paragraph 9). The thrust of his argument is that the finding of the Commissioner of Customs, Bangalore that DHL had willfully manipulated invoice, packing list, seaway bill and bill of lading in order to evade payment of ADD by withholding original and manipulated copies of the documents and advised the importer to evade payment of ADD in violation of Regulation 13(d), (e), (n) and 19(8) of CHALR was unsubstantiated and incorrect. He invites our attention to paragraph 8 of the Order No.25/2010 wherein the Commissioner of Customs(General), Mumbai had recorded the correspondence between Shri Suresh Narayanan, Operation Manager, DHL and the Customs Brokerage and Clearance Division of DHL regarding the correct provisions of the relevant notification which applied to the consignment imported by MITPL and the clarification by Shri Subash, Manager, Compliance and Training, DHL. It was stated that the correct Sl. No. would be 13 and 17 of the table to Notification No.12/2010 Cus. dated 19.10.2010 for the impugned goods if imported from China and Thailand, respectively. He had also clarified that if the client insisted on Sl. No. 16, the impugned goods would be subject to duty in terms of Sl. No. 17 of the notification. The Commissioner also recorded in para 10 of the order that DHL had refused the suggestion by MITPL that DHL may make appropriate correction of the shipping documents. We are shown the internal e-mail wherein the staff of DHL were directed not to carry out corrections of the documents. This was in August 2010. It is submitted that there was no evidence of the appellants carrying out any such corrections. The impugned order was passed on a wrong basis that DHL manipulated the documents. The order was therefore liable to be set aside.
4.1 Further, as per the Regulation 20 (2), the Commissioner of Customs is empowered to suspend the licence of CHA, where an enquiry against such agent is pending or contemplated, in appropriate cases, where immediate action is necessary, within 15 days from the date of receipt of a report from the investigating authority. This was subject to the condition that the grounds enumerated in (a), (b) and (c) of Regulation 20 (1) existed which was not the case in the instant case. In the instant case, there was no investigation report received by the Commissioner as contemplated in the Sub-Regulation 2 of Regulation 20. This invalidated the order of suspension. The Commissioner referred to material evidence such as statements recorded, email, print outs of documents taken from computers of DHL, etc., which had yet to be furnished to the CHA. In the circumstances, even the post decisional hearing would be rendered a farce. The order of prohibition issued by Commissioner of Customs (General) , Mumbai could not be a basis for the order of suspension. The investigation report sent by the Commissioner of Customs, Nhava Sheva to the Commissioner of Customs, Mumbai also did not constitute the investigation report envisaged in Regulation 20 (2) of CHALR. Immediate action was warranted to prevent perpetration of further violations. There was no finding that any such imminent danger existed in allowing DHL to continue to operate as CHA.
5. The learned counsel for the CHA relied on the judgment of Apex Court in the case of M/s. Swadeshi Cotton Mills. Vs. UOI- (1981) 1 SCC in a case which interpreted powers of a statutory authority to take immediate action under the Industries (Development and Regulation) Act 1951.The Honble Apex Court had held that even where the statute conferred discretionary power and did not regulate or hedge around the formation of opinion by the statutory authority in regard to existence of preliminary jurisdictional facts with express checks, the authority had to form that opinion reasonably like a reasonable person. The court was entitled to examine the validity of the formation of such opinion, where an issue was raised, whether the governments opinion as to urgency had been formed in a manifestly arbitrary or perverse fashion without regard to patent, actual and undeniable facts, or that such opinion has been arrived at on the basis of irrelevant considerations or no material at all, or on materials so tenuous, flimsy, slender or dubious that no reasonable man could reasonably reach that conclusion. It is submitted that the impugned order called for interference by the Tribunal in the light of the above observations of the Apex Court.
6. The learned SDR defended the impugned order and submitted that the importer paid Rs.5 crore admitting the liability to duty evaded. The question was the role of CHA in the evasion attempted. After perusing the shipping documents, the CHA had intimated the importer that the impugned imports attracted higher ADD unless the notification was amended. She invited our attention to internal correspondence of DHL between Shri Danny Fernandes and Shri Amita Shedge endorsing copy to other executives wherein it was advised as under.
Kindly take a print of the revised B/L, invoice and packing list of Michelin job 675326 attached herewith.
Plz discard and throw all B/L, invoices & packing list copy sets sent to NSA in the docket and replace them by these.
Please note that Im also sending a set in todays afternoon dispatch however, it will reach NSA in the evening only.
Hence request you to kindly do the needful.
6.1 She also draws our attention to a communication from Shri Suresh Narayanan to Shri Danny Fernandes wherein he had directed his colleagues that all previous documents were to be hand torn and destroyed. The learned SDR submitted that the correction in the original documents was carried out to enable the importer avail the concessional rate initially DHL had intimated MITPL as not admissible to the consignment involved.
7. The learned counsel for the appellant and the learned SDR made an endeavour to canvass their respective cases that the consignment in question was eligible for the concessional rate availed on the strength of the documents initially received by DHL and the departments case that but for the amendment to the shipping documents, the said concessional rate would not have been admissible. The importer ended up paying differential ADD based on the original documents, the learned SDR submitted.
7.1 The learned counsel for the appellant submitted that the importer had produced the amended documents and it had no means of knowing that the corrections involved had not been made abroad and by persons authorized. Countering the claim, the learned SDR takes us through the order of the Commissioner of Customs(General), Mumbai wherein it was indicated that searches had been conducted in the premises of the CHA in Mumbai and other places. The tampering of documents had been done with the knowledge and after consulting the CHA. She invites our attention to the deposition by Shri Sanjeev Nayak of MITPL where he stated that he had intimated Shri Suresh Narayanan of DHL that if Transityre was shown as exporter, they would end up paying higher ADD. After two days, Shri Sanjeev Nayak had advised Shri Gaurav Chopra that after Transityre, if the words on behalf of Michelin Asia Pacific (HK) was written, he would be able to file bill of entry with lesser ADD. Shri Sanjeev Nayak also informed that all the executives of DHL concerned were aware of the amendments made to the documents. The learned SDR submits that the CHA had used the amended documents fully knowing that the documents originally submitted were different and did not entitle the assessee to obtain the benefit of lower ADD.
7.2 She submits that the letter dated 20.10.2010 received from Commissioner of Customs (General), Mumbai formed the investigation report envisaged under Regulation 20 (2) of CHALR. The impugned order was therefore passed satisfying the requirements of the relevant regulation.
7.3 She relies on the following judgments in support of the impugned order.
(a) Orient Clearing & Forward Agency Vs. UOI - 2001 (136) ELT 3(Cal.) In this judgment their Lordships of the Honble High Court of Calcutta had held as follows:
17. In the case therein, the said order was not on merely subjective satisfaction of the Collector, but ample reason had been given in the order itself indicating that he had bona fide exercised his power under sub-regulation (2) of Regulation 21. When the wide powers given to the Collector of Customs had not been misused or arbitrarily used and when such power has been exercised for immediate action, the Court is debarred from interfering with the order. Therefore such case is not helping the petitioner but the respondent authority of course, in the fact situation.
(b) Collector of Customs Vs. Jeena and Company - 1990 (45) ELT 72 (Cal.) In this judgment, the Honble High Court of Calcutta observed that while construing the said rule this court if introduces something which the rules did not provide by allowing a hearing to the parties concerned, to our mind, that would defeat all purposes of the said rule and sub-rule of exercising powers in cases of emergency, inasmuch as it would paralyze the administrative process or frustrate the need of utmost promptitude in cases where necessity so demands for exercise of such emergent power. It was submitted that the Honble High Court was interpreting the provisions corresponding to the present Regulation 20 (2) of CHALR. The Court went on to observe as follows:
11. The Court is required to look into the matrix of the present case which presents quick succession of events and circumstances warranting the exercise of power under Regulation 21 (2) of the Regulation. All the events and circumstances should not be lost sight of. The decision of the Supreme Court in the case of Commissioner of Police v. Gobordhandas Bhanji (supra) has no application to the factual situation here.
(c) Ocean Shipping & Clearing Agency Vs. UOI - 2010 (251) ELT 517 (Cal.) This judgment is cited for the observation of the Honble High Court that for issuance of order of suspension under Regulation 20 (2) compliance with Regulation 22 is not necessary.
(d) Fairdeal Enterprises (P) Ltd. Vs. C. C (Airport & Administration) - 2010 (256) ELT 545 (Cal.) In this judgment, the Honble High Court observed that there can be no doubt that power under Regulation 20(2) has serious civil consequences for a customs house agent and the principles of natural justice must be complied with. However, in cases that required immediate suspension the post decisional hearing may suffice.
(e) Jasjeet Singh Marwah Vs. UOI - 2009 (239) ELT 407 (Del.) In this judgment, the Honble High Court rejected the contention of the CHA that licence could be suspended only for violation of the regulations under CHALR and upheld suspension under Sub-Regulation 2 of Regulation 20. In the said case, offending transactions had taken place in the year 2002-03 and adjudication of the offences by the importer had been concluded on 20.10.2006. The licence of the CHA was suspended on 29.1.2007. The Honble High Court upheld the order of immediate suspension under Regulation 20. The High Court went on to observe that it was not only for the CHA to ensure that the entries made in bills of entry were correct but also that a true and correct declaration of value and description of goods was made and in the event of any infraction such as mis-declaration of goods, he could be penalized under the Regulation 20 of CHALR, 2004 if it resulted in mis-conduct which was of the nature which rendered him unfit to transact the business of CHA at the customs station.
(f) Sindhu Cargo Services Ltd. Vs. Commissioner of Customs, Coimbatore - 2006 (203) ELT 218 (Mad.) In this judgment, the Honble High Court held that an order passed under Regulation 20 (2) for suspending the license pending proceedings under Regulation 22 (1) could not be construed as a punishment and the power conferred under Regulation 20 (2) empowered the Commissioner to pass an order of suspension pending enquiry having satisfied that immediate action was necessary for the reasons mentioned in the order itself.
8. We have considered the various case laws cited by the learned SDR. We find that all the judicial authorities cited are relevant to the case in hand and support the order challenged by the CHA.
8.1 We now discuss the citations relied on by the learned counsel for the CHA.
(a) Navin Clearing and Forwarding Agency P. Ltd. Vs. Commissioner of Customs (G), Mumbai 2010 (250) ELT 372 (Tri.-Mumbai) In this interim order, the tribunal found that if the Commissioner of Customs (General) New Custom House, Mumbai had suspended the CHA license on the ground that Commissioner of Customs, Jaipur had suspended the operation of that licence within the jurisdiction of that Commissioner, the suspension order was issued for a reason relatable to the permission granted by the Jaipur Commissioner for carrying out the CHAs business within his jurisdiction on the strength of the Mumbai Commissioners license. Prima facie, the suspension order was illegal.
We observe that the order cited is an interim order and not a final order. Moreover, the order of the Commissioner of Customs, Mumbai in the case on hand is subjudice before the Honble High Court of Mumbai.
(b) N. C. Singh and sons Vs. UOI - 1998 (104) ELT 11 (Cal.) This judgment is cited to support the claim that the suspension order did not spell out that immediate action was required. We find that the facts in the instant case are different and the immediate suspension of license was justified.
(c) Kunal Travels (Cargo) and Commissioner of Customs, New Delhi - 2005 (180) ELT 345 (Tri.-Del.) In this decision, the Tribunal found that the order impugned did not indicate how the Commissioner had formed an opinion that immediate action was necessary to suspend the CHA licence pending enquiry and vacated order as not passed in accordance with Regulation 20(2) of CHALR.
We find that the facts of the cases cited are distinguishable and the case laws cited do not apply to the instant case.
9. We have carefully considered the case records and submissions made by both sides. We find that the impugned order was passed on the basis of a report dated 20.10.2010 of the Commissioner of Customs (Export), Customs House, Nhava Sheva and Order No.25/2010 dated 22.10.2010 issued by the Commissioner of Customs (General) Mumbai. The outcome of the investigation communicated by the Commissioner of Customs, Nhava Sheva was the following conclusion arrived at after conducting searches at various premises of DHL.
(i) DHL had full knowledge of manipulation of invoice, packing list, seaway bill / BL in order to evade payment of correct amount of anti-dumping duty.
(ii) DHL also had in their possession copies of original and manipulated documents.
(iii) DHL had advised the importer to evade payment of anti-dumping duty.
He referred the matter to the Commissioner of Customs (General), Mumbai for considering suspension of CHA licence in terms of CHALR.
9.1 The Commissioner of Customs (General), Mumbai after conducting investigations recorded in his Order No.25/2010 dated 22.10.2010 that the importer had admitted forging the shipping documents and paid Rs.5 crore towards part of the differential ADD due from them and that such goods valued at Rs.5.8 crore had also been seized. He observed the sequence of events and involvement of staff of DHL and MITPL in the offending transactions in the paragraphs 8 & 9 of the order reproduced below.
8. On 8.8.2010, Operations Manager of DHL Lemuir Logistics P. Ltd. (DHL in short) Shri Suresh Narayanan by email requested for clarification from the Customs Brokerage and Clearance division of his company. Shri S. Subash, Manager, Compliance and Training, by his two mails dated 9.8.2010, clarified that since the goods are not supplied by MAPIEHK, the correct Sl. Nos. would be 13 and 17 for goods from China and Thailand respectively. Further, he categorically mentioned that if the client is insisting on Sl. No.16, wherein the goods are originating and exported from Thailand where the producer is Michelin Siam Co. Ltd. and exporter is Transityres BV Netherlands which will fall under Sl. No.17, to get the notification amended accordingly as per their new documentation pattern.
9. In his statement recorded on 18.10.2010, Shri Sanjeev Nayak, Manager, Supply Chains of MITPL has admitted that the documents of the supplier were tampered in his office in Delhi by Shri Gaurav Chopra, another employee using the software PDF writer. He also admitted that the changes in documents were done after discussion with DHL.
9.2 He came to the same conclusion as the Commissioner of Customs, Nhava Sheva as regards the involvement of DHL in the manipulation of shipping documents, the intent to obtain inadmissible concessional rate of ADD and violation of regulations of 13 (d), (e), (n) and 19 (8) of the CHALR by DHL. The impugned order gives the case of the revenue in brief in paragraphs 4, 5, and 6 of the impugned order as follows.
4. As could be seen from the facts of the case, during the relevant period Anti Dumping Duty on truck and bus tyres imported from China and Thailand was leviable under Notification No.12/2010, dated 19.02.2010. The quantum of duty was linked with four factors namely, Country of Origin, Country of Export, Producer and Importer(sic)(Exporter). In the case of consignment exported by M/s. Michelin Import Export HK Ltd., from China, (MAPIEHK) the Anti Dumping Duty was $ 37.83 per tyre set and from Thailand the duty was $ 76.22 per tyre set. Even if all other criteria are same but if the exporter is not of the same company, the rates were $ 88.27 and $ 99.05 respectively. It was reported that till June 2010, MITPL was importing tyres from MAPIEHK and paying lower rate of Anti Dumping Duty. From July, MITPL was importing (sic) M/s. Transityre BV (TBV) and invoices were issued by TBV and Bill of Lading also showed consignor as TBV. However, when import documents namely, invoice, bill of lading were submitted to the Customs, these were found to be forged to show goods were exported by MAPIEHK. The documents were manipulated to claim lower rate of ADD as against the correct amount of ADD of $ 88.27 and $ 99.05 per tyre set. As a result of above manipulation, total duty evaded was worked out to Rs.5.18 crores out of which Rs.5 crores has since been paid by the importer towards differential duty.
5. Further it has been reported that from the above facts and other material evidences such as statements recorded, emails, printouts of documents taken from computers of M/s. DHL Lemuir Logistics P. Ltd., it appears that the CHA had full knowledge of manipulation of documents submitted to the Customs, had in their possession copies of original and manipulated documents and had advised the importer to evade payment of anti dumping duty. Further it was also reported that the CHA has grossly violated Regulation 13 (d) of CHALR 2004 in as much as they have not only failed to advise their client to comply with the provision of the Customs Act but instead willfully colluded in perpetrating the fraud. The CHA has also acknowledged that the original invoice, bill of lading, sea way bill and manipulated copies of invoice, sea way bill, bill of lading were available with them and that amendments were made to the said documents without any endorsement or seal of the Shipping Line.
6. From the above, it is evident to me that the CHA M/s. DHL Lemuir Logistics P. Ltd., has willfully, with full knowledge, have manipulated invoice, packing list, sea way bill, bill of lading, in order to evade payment of anti dumping duty by with holding original and manipulated copies of the documents. The CHA has thus deliberately advised the importer to evade payment of anti dumping duty and has also failed in discharging his obligation as a CHA at Mumbai Customs as required under Regulation 13 (d), 13 (e), 13 (n) & 19 (8) of CHALR, 2004.
10. We find from the records that on presentation of the shipping documents for clearance of the impugned goods under Notification No.12/2010 dated 19.2.2010, DHL advised MITPL in July 2010 that the consignment would have to suffer higher ADD unless the notification was amended. Subsequently, the invoice initially submitted as of Transityre BV Netherlands was modified by introducing the expression Michelin Asia Pacific Import Export (HK) Ltd. Hong Kong below the logo of the exporter in the invoice in addition to Transityre BV Netherlands. This was done at the office of Shri Sanjeev Nayak, Supply Agent, MITPL by Shri Gaurav Chopra, an employee of MITPL using the software pdf writer. Shri Sanjeev Nayak admitted that the changes in the documents were done after discussion with DHL. This submission as regards consulting DHL is not corroborated or tested in cross examination before the impugned order was passed. We also observe that DHL had refused to carry out amendments to the shipping documents though Shri Sanjeev Nayak offered to authorize DHL to carry out such amendments. Therefore, it is not established that DHL themselves had carried out any incriminating corrections of documents. However, as per the CHAs understanding of the provisions of the relevant Notification No.12/2010 Cus. dated 19.10.2010, MITPL was not entitled to the lower rate of ADD as per the said notification with the original set of documents. Subsequently, the importer produced invoice showing M/s. Michelin Asia Pacific Import Export (HK) Ltd., Hong Kong below the logo of exporter Transityre BV Netherlands. Name Transityre BV Netherlands was already there in the invoice as exporter. It was obvious and known to the CHA that the exporter in the invoice was initially by TBV Netherlands as reflected also in other shipping documents. The CHA was aware that the description Michelin Asia Pacific Import Export (HK) Ltd., Hong Kong was a later insertion. Though the appellant had initially intimated the correct legal position according to their understanding of notification to the importer, they kept silent and suppressed from the department the tampering of the documents resorted to by the importer for getting the goods assessed at inadmissible lower ADD. MITPL availed inadmissible benefit of lower ADD on the strength of amended shipping documents filed by DHL.
Regulation 13 (d) of CHALR reads as follows:
REGULATION 13.?Obligations of Customs House Agent. - A Customs House Agent shall
(d) 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 Deputy Commissioner of Customs or Assistant Commissioner of Customs;
This provision clearly mandates that the CHA intimates the department any violation committed by the importer to obtain a benefit not authorized by law. In finding a violation of this provision, the fact whether the correction was carried out by the CHA or by MITPL has no relevance.The impugned order rendered a finding that DHL manipulated invoice, seaway bill and bill of lading in order to evade ADD by withholding original and manipulated documents. The finding that DHL manipulated invoice, seaway bill and bill of lading is not supported by evidence. However, in the paragraph 5 which precedes this observation contains the finding that the CHA had full knowledge of manipulation of documents submitted to the customs and that it had in its possession copies the original and manipulated documents. They had failed to advise their client to comply with the provisions of Act and colluded in perpetrating the fraud thereby violating regulation 13 (d) of CHALR. This finding, we observe, is correct.
10.1 We find that the violation involved is of a serious nature and we cannot find fault with the Commissioner deciding to resort to immediate suspension of the licence of the CHA under Regulation 20 (2) of CHALR.
10.2 Regulation 20 (2) of CHALR is reproduced below:
REGULATION 20.?Suspension or revocation of licence. - (1) The Commissioner of Customs may, subject to the provisions of regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely :-
(a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under regulation 10;
(b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else;
(c) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or any where else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station.
(2)?Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, [within fifteen days from the date of receipt of a report from investigating authority, suspend the licence] of a Customs House Agent where an enquiry against such agent is pending or contemplated.
[(3) Where a licence is suspended under sub-regulation (2), notwithstanding the procedure specified under regulation 22, the Commissioner of Customs may, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs House Agent whose licence is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs House Agent.]
11. The Commissioner is empowered to invoke powers in cases like this under Regulation 20 (2) of CHALR. In ordering suspension, the Commissioner relied on a report of Commissioner, Nhava Sheva. We find that there is no necessity of putting the party on notice of such action proposed and the material relied on. Suspension is not a punishment. The CHA gets adequate opportunity to present its case before the Commissioner at the post decisional hearing which the CHA is yet to attend pending these proceedings initiated by it. We have no doubt in our mind about the immediacy that necessitated the order. The order is competently and justifiably made. The civil consequences of such an order cannot be avoided. We reject the appeal. The Commissioner shall hear the CHA in ten days from today and pass orders under Regulation 20 (3) of CHALR within a week thereafter failing which the order of suspension shall stand vacated. Needless to say that the CHA shall be provided all relied upon material sought by it to defend its case.
(Pronounced in open Court on 14.03.2011 ) (P. KARTHIKEYAN) Member(T) (M. V. RAVINDRAN) Member (J) /rv/ 19