Custom, Excise & Service Tax Tribunal
Aquarius Maritime Pvt Ltd vs Mumbai on 26 April, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/86812/2015
[Arising out of Order-in-Original No: 64/2014-15 dated 12th January 2015 passed by the Commissioner of Customs (General), Mumbai]
For approval and signature:
Honble Shri M V Ravindran, Member (Judicial)
Honble Shri C J Mathew, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
No
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Aquarius Maritime Pvt Ltd.
Appellant
Versus
Commissioner of Customs (General)
Mumbai
Respondent
Appearance:
Shri V R Naik, Advocate for the appellant Shri C Singh, Asstt. Commissioner (AR) for the respondent CORAM:
Honble Shri M V Ravindran, Member (Judicial) Honble Shri C J Mathew, Member (Technical) Date of hearing: 26/04/2016 Date of decision: 26/04/2016 ORDER NO: ____________________________ Per: C J Mathew:
The customs broker licence no. 11/1841 dated 17th December 2012, issued to M/s Aquarius Maritime Pvt Ltd and suspended on 11th December 2014, was ordered to be continued under suspension vide order no. 64/2014-15 dated 12th January 2015 of the Commissioner of Customs (General), New Custom House, Mumbai. M/s Aquarius Maritime Pvt Ltd is before us for quashing the suspension following the order of Honble High Court of Bombay dated 10th August 2015 in Writ Petition no.7306/2015 thus about alternate and equally efficacious remedy of appeal:
and in the light of his concession that the order impugned in the writ petition is appealable and that remedy is efficacious and complete, we do not think that we should entertain the writ petition. We have no doubt that the Tribunal will redress all the grievances of the petitioner in the vent that the Tribunal is approached by the petitioner.
2. The appeal is against the following direction .in exercise of powers conferred under Regulation 19(2) of CBLR, 2013, hereby order that the suspension of M/s Aquarius Maritime Pvt Ltd, CB No 11/1841, [PAN No AACCAA2707P] ordered vide Order No. 62/2014-15 dated 11.12.2014 is hereby continued pending inquiry proceedings under Regulation 20 of CBLR, 2013. of Commissioner of Customs (General) in the impugned order.
3. On 2nd February 2015, appellant was issued with notice communicating the articles of charge and the appointment of Inquiry Officer. The Inquiry Officer, noting the non-response of noticee to the many letters issued to them, finalized his report on the three articles of charge on 11th January 2016.
4. Appellant has challenged the suspension on the ground that no action lies against them under the Customs Brokers Licencing Regulations, 2013 as they, in the absence of access to the customs clearance systems, had not undertaken any work. It is their contention that any contravention can arise only in connection with acts of omission and commission while functioning as customs broker. It is their further contention that notice under regulation 20(1) was required to be issued within 90 days of receipt of offence report with report of inquiry authority to be submitted within another 90 days of issue of notice and action against licencee to be ordered within 90 days thereafter. The appellant has challenged the continuation of proceedings and the suspension on the grounds of failure to comply with the schedule prescribed in the Regulations.
5. We have heard both Learned Counsel and Learned Authorized Representative and have perused the report of the Inquiry Officer furnished by the Learned Authorized Representative. The suspension and further proceedings are related to the three charges in the notice issued to the appellant and it may assist us to recall these here. The first article reproduces Regulation 3 and alleges contravention thereof in that appellant had attempted to carry on customs brokering business by using the licence of M/s Vignesh Freight Forwarders Pvt Ltd because none of their own employees had been granted customs passes. The second article reproduces Regulation 10 and alleges that, in contravention thereof, the appellant had sub-let the licence of M/s Vignesh Freight Forwarders Pvt Ltd. The third article reproduces Regulation 17(9) and alleges contravention thereof by not preventing their employees from obtaining customs passes as employees of M/s Vignesh Freight Forwarders Pvt Ltd.
6. The appellant is, admittedly, a freight forwarder who applied for and obtained a new customs brokers licence and its authorized person, Shri Aloysius Pais, was duly qualified under the Customs Brokers Licencing Regulations, 2013. As freight forwarder, a number of their customers required clearances under the Customs Act, 1962 which was executed through a sister concern, M/s Vignesh Freight Forwarders Pvt Ltd. It would appear that their employees were issued with customs passes on the application of M/s Vignesh Freight Forwarders Pvt Ltd and this was taken up for investigations leading to proceedings against both the entities. Commissioner of Customs, Chennai passed final order against M/s Vignesh Freight Forwarders Pvt Ltd imposing penalty of ` 50,000/- and restoring the licence.
7. From a cursory perusal of the facts, it would appear to us that the appellant, though a holder of a customs brokers licence, continued to function within the logistics chain as it did before obtaining its own licence. It is normal bona fide practice in the trade for a freight forwarder to engage a customs broker to handle the clearance formalities of its customers. There is no bar on the services of a customs broker being contracted by freight forwarders or even other customs brokers. It is the contracted customs broker, who, in the present instance, is M/s Vignesh Freight Forwarders Pvt Ltd, to ensure compliance with the provisions of the Customs Act, 1962. There is no allegation of non-compliance of contravention of the Customs Act, 1962 against appellant or contracted customs broker. Further, we notice that there is no prescription on the manner and terms of employment of individuals by customs brokers. To the extent that a broker has sought for and obtained passes for individuals claimed to be their employees, the brokers are responsible vicariously for any contravention of the provisions of the Customs Act, 1962 or breach of the Regulations by such employees.
8. We take note that all the documentation and clearance of cargo of customers referred by appellant were undertaken by M/s Vignesh Freight Forwarders Pvt Ltd and who, for those very activities, was proceeded against under the Customs Brokers Regulations, 2013 and penalised by Commissioner of Customs, Chennai. It is clear that the Regulations bind brokers to act in conformity with the Regulations while discharging functions as a broker. In relation to specific export or import consignments, there can be only one broker and only such broker can be held accountable for acts of omission and commission. Any other broker may have been associated with that consignment but, not being in the capacity of a broker, can be proceeded against as any other person under the penal provisions of the Customs Act, 1962, wherever applicable. In relation to the matter in which M/s Vignesh Freight Forwarders Pvt Ltd has been penalised, action cannot be initiated against the appellant also as a customs broker. Moreover, the appellant has not rendered any service as a customs broker in relation to import or export consignment and is, therefore, outside the ambit of the said Regulations. We do not comment on the legality, propriety and appropriateness of the inquiry proceedings or inquiry report as no detriment to appellant has emanated from it yet.
9. We also take note of the failure of the licencing authority to comply with the schedule for issue of notice for initiating inquiry and action thereafter. That is also sufficient ground to quash the suspension and other proceedings against the appellant under the Customs Brokers Regulations, 2013.
10. For the above reasons, we set aside the suspension order and direct restoration of licence of the appellant. We also direct the respondent-Commissioner to ensure immediate operationalising of the licence to enable the appellant to undertake customs broker activities on its own account.
(Operative Part Pronounced in Court) (M V Ravindran) Member (Judicial) (C J Mathew) Member (Technical) */as 2 2