Custom, Excise & Service Tax Tribunal
M/S. Manasa Impex Services vs Commissioner Of Customs, Central ... on 16 June, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/00328/2010
[arising out of Order-in-Original No.01/2010, dated 13.05.2010 passed by the Commissioner of Customs, Central Excise & Service Tax, Coimbatore]
M/s. MANASA IMPEX SERVICES
APPELLANT
Versus
COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, COIMBATORE
RESPONDENT
Appearance:
For the Appellant Shri S. Murugappan, Adv.
For the Respondent Shri K. Veerabhadra Reddy, JC (AR) CORAM:
Honbe Shri D.N. Panda, Judicial Member Honble Shri B. Ravichandran, Technical Member Date of hearing/decision 13-06-2016 FINAL ORDER NO. 41012 / 2016 Per B. Ravichandran:
The appellant is a Customs House Agent licensed to deal with the processing of import and export of consignments for Customs clearance. Certain investigations were carried out by the officers of Customs during the year 2006 regarding possible over-valuation of export products with the intent to avail ineligible draw-back and concession available on such export items. The investigation concluded and resulted in various proceedings under Customs Act, 1962. The proceedings against the appellant under Customs House Agents Licensing Regulations, 2004 [CHALR, 2004] has also been initiated vide show-cause notice dated 08.06.2006. The notice alleged that the appellant failed on three counts, namely, Regulation 13(a), 13(d) and 13(e). In short, the allegation is that the appellant failed to obtain authorization from his clients to deal with Customs, failed to advise his clients for proper compliance of Customs Act and failed to exercise due diligence to ascertain the correctness of information required to handle the work as a CHA. The appellants license was suspended on 15.02.2006, initially for a period of six months. The present show-cause notice was issued for cancellation of license on the above misdemeanors. An enquiry was conducted by the Assistant Commissioner in pursuance of the show-cause notice and he submitted a report holding that the allegation against the appellant stand proved. The enquiry report was dated 06.10.2006. Thereafter, the learned Commissioner held a personal haring on 07.02.2008. As no final order was passed by the learned Commissioner, the appellant approached the Honble Madras High Court by way of a Writ Petition No.4342 of 2010. The Honble High Court noted the delay in disposal of the appellants case and directed the learned Commissioner vide their order dated 16.04.2010 to decide the case within four weeks. The present impugned order came to be passed on such direction. The original authority by his order revoked the license of the appellant and also forfeited the security deposit of Rs.1,10,000/- furnished to the department.
2. Learned counsel appearing on behalf of the appellant submitted that the appellant is out of business for the past more than ten years. He further stated that all the export shipments were handled by them in the normal course of their business and they have no active role in the mis-declaration of export cargo or connivance with the exporters to draw undue benefit. There is no evidence to show that they are beneficiary of any admitted misdemeanor by the exporter. The work is done as per the fee paid per shipping bill and no other benefit has accrued to the appellant. Further, he strongly pleaded that the show-cause notice dated 08.06.2006 is very cryptic regarding the allegation against the appellant. Whereas, the impugned order relied on various facts, which are neither indicated nor relied upon in the notice issued to the appellant. He has given many such instances like reference to specific documents, which are not recorded in the original allegation. The learned counsels main plea, without reference to merit, is on two fold (a) Substantial delay in conclusion of proceedings against him from the date of suspension [15.02.2006] to the date of impugned order [13.05.2010] and (b) the order travelling well beyond the cryptic show-cause notice, which was the subject-matter of adjudication. The learned counsel relies on decision of Honble Delhi High Court in the case of Ashiana Cargo Services Vs Commissioner of Customs (I&G) reported in 2014 (302) E.L.T.161 (Del.), which was affirmed by the Honble Supreme Court in the case of Commissioner v. Ashiana Cargo Services reported in 2015 (320) E.L.T. A175 (S.C.)] to reiterate his plea that the consequences of the appellants misdemeanor, if any, resulted in his being out of business for more than ten years, which even if considered blame worthy act is disproportionate to the misdemeanor, if any, on their part.
3. The learned Authorised Representative strongly contested the submissions made by the learned counsel. He stated that the appellant is actively involved in processing more than 400 shipping bills, which resulted in mis-declaration and loss to the Government by way of ineligible export concessions. The CHA has not acted as per the mandate stipulated in CHALR, 2004. The violations of such regulations resulted in the revocation of his license, which is legally sustainable. Regarding the delay, he submitted that considering the voluminous documents and investigation with reference to Customs Act, 1962, parallel proceedings under CHALR, 2004 got delayed.
4. We have heard both sides and examined the appeal records.
5. We are taking up the two preliminary submissions made by the learned counsel for the appellant for examination first. It is a fact that there is a delay of four years in issue of the impugned order. Over and above, in the appellate stage another six years have passed. It is an admitted fact that the appellant is out of his livelihood for more than ten years. The second issue is regarding the validity of impugned order on the principle that it travelled beyond the allegations made in the show-cause notice. We find that though the show-cause notice alleged the violation of three clauses of Regulation 13, the detailed order by learned Commissioner quoted and relied on certain details which are not referred to in the show-cause notice. He relied on certain details as per adjudication proceedings under Customs Act, 1962.While there is no illegality per se with such reliance, the question is due notice to the appellant is required. We are unable to appreciate the findings and observations which are beyond the cryptic show-cause notice on these grounds. We note that in para 13.03 of the impugned order the original authority relies on investigations and the subsequent adjudication proceedings concluded during May to August 2009-10 to hold that the appellant failed to get authorization of the exporters and did not observe due diligence in verifying the correctness of the information given by their clients. The notice which resulted in the impugned order was dated 08.06.2006 and inquiry report was dated 06.10.2006. It is clear that reliance placed by the original authority on the investigation and adjudication (under Customs Act, 1962) done in 2009-10 is legally untenable. Clearly, the adjudicating authority considered developments/purported evidences that arose three years after the proceedings were initiated and inquiry completed. This is in clear violation of principle of natural justice.
6. Considering the above two issues without even elaborately commenting specifically on the merits of the case, we find the continued revocation of the license of the appellant is not justifiable. This is supported by the finding of the Honble High Court of Delhi in Ashiana Cargo Services (supra). The Honble High Court held that penalty imposed as in any ordered system be proportional to the violation. Just as the law abhors impunity for infraction, it cautions against the disproportional penalty. Neither of the extreme is to be encouraged. The Honble High Court applied proportionality doctrine to hold that inability of the appellant to work for long time has to be considered, while deciding the case. We also referred to decision of Honble Andhra Pradesh High Court in Commissioner of Customs & Central Excise, Hyderabad-II Vs H.B. Cargo Services reported in 2011 (268) E.L.T. 448 (A.P.). The Honble High Court held in para 11 of its order as under:
11. While issuance? of signed blank shipping bills would, by itself, amount to negligence on the part of the CHA, their doing so for a consideration of Rs. 150/- per shipping bill is an act of corruption. It is in this context that the proportionality of punishment imposed on the respondent, and the scope and amplitude of this doctrine, is required to be examined. Proportionality is a principle where the court is concerned with the process, method or manner in which the decision-maker has ordered his priorities, reached a conclusion or arrived at a decision. The very essence of decision-making consists in the attribution of relative importance to the factors and considerations in the case. The doctrine of proportionality places in focus the true nature of the exercise - the elaboration of a rule of permissible priorities. Proportionality involves balancing test and necessity test. While the former (balancing test) permits scrutiny of excessive onerous penalties or infringement of rights or interests, and a manifest imbalance of relevant considerations, the latter (necessity test) limits infringement of human rights to the least restrictive alternative. [Judicial Review of Administrative Action (1995), pp. 601-05, para 13.085; Wade & Forsyth: Administrative Law (2005), p. 366; Mukul Kumar Choudhuri - (2009) 15 SCC 620]. What is otherwise within the discretionary domain and sole power of the decision maker to quantify the punishment, once the charge of misconduct stands proved, is exposed to judicial intervention if exercised in a manner which is out of proportion to the fault. Award of punishment, which is grossly in excess of the allegations, cannot claim immunity and remains open for interference under limited scope of judicial review. One of the tests to be applied, while dealing with the question of quantum of punishment, would be: would any reasonable person have imposed such punishment in like circumstances? Obviously, a reasonable person is expected to take into consideration the measure, magnitude and degree of misconduct and all other relevant circumstances, and exclude irrelevant matters before imposing punishment [Mukul Kumar Choudhuri - (2009) 15 SCC 620]. The CHALR enables both suspension and revocation of the license of a CHA for violation of any of the conditions specified therein. If any such ground exists, two courses are open to the Commissioner. One is to suspend the license and the other is to revoke it. Suspension would mean that the license would be inoperative for a particular period. An order of revocation would mean that the license is totally inoperative in future, it loses its currency irretrievably. Suspension/revocation, as the case may be, has to be directed looking to the gravity of the situation in the background of the facts. For minor infraction, or infractions which are not of a serious nature, an order of suspension may suffice. On the contrary, when revocation is directed it has to be only in cases where the infraction is of a serious nature warranting exemplary action on the part of the authorities for, otherwise, two types of actions would not have been provided for. Primarily it is for the Commissioner to decide as to which of the actions would be appropriate but, while choosing any one of the two modes, the Commissioner has to consider all relevant aspects, and draw a balance sheet of the gravity of the infraction and the mitigating circumstances. The difference in approach for consideration of cases warranting revocation or suspension has to be borne in mind while dealing with individual cases. The proportionality question is of great significance as action is under a fiscal statute, and may ultimately lead to a civil death. [Falcon Air Cargo and Travels (P) Ltd. - 2002 (140) E.L.T. 8]. Considering the above ratio, we find that in this case also, the loss of more than ten years of business and livelihood for the appellant cannot be allowed to continue. Applying the doctrine of proportionality as well as the fact that the impugned order travelled beyond the notice, we hold that both the grounds as agitated by the appellant are tenable to set aside the impugned order.
7. Accordingly, we allow the appeal by setting aside the impugned order.
(Dictated and pronounced in open court)
(B. RAVICHANDRAN) (D.N. PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
ksr
17-06-2016
DRAFT
Remarks
I
II
III
Date of dictation
16.06.2016
Draft Order - Date of typing
17.06.2016
Fair Order Typing
17.06.2016
Date of number and date of dispatch
1706.2016
5
C/00328/2010