Customs, Excise and Gold Tribunal - Mumbai
C.J. Joshi And Sons vs Commissioner Of Customs on 5 May, 1998
Equivalent citations: 1999(113)ELT900(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. Appellant was Custom House Agent (CHA) licensed under the Regulations at Kandla. Appellant filed a shipping bill, under a claim for drawback, in February, 1995 for export of PVC pipes weighing 48 metric tonnes by M/s. Ultratex Exports, Ahmedabad. Permission was also asked for loading this export cargo into the containers in which it was to be carried at the exporter's premises at Ahmedabad. On such permission being granted, empty containers were taken from Kandla. The CHA subsequently presented the shipping bill to the Custom House accompanied by an invoice, on the reverse of which has a certificate of the Superintendent of Central Excise, Ahmedabad that the export cargo had been examined and stuffed into the containers in his (Superintendent's) presence on 11th February, 1995. The containers were opened and examined by the Customs in Kandla, in pursuance of information received. They found the PVC pipes within the containers of weigh only 949 kg found over 200 empty cartons. Goods were seized. In the course of subsequent investigation carried out by the Department, statement of Shailesh Varu of Gandhidham was recorded. In that statement, he stated that, while he was, on record, an employee of the appellant, he was actually looking after affairs of Ambalica Enterprises which was being run by his brothers and that he was paying Rs. 125/- per container to the appellant in return for being so shown as an employee and utilising its name. S.D. Solanki, employee of the appellant, in his statement, said that he did not know M/s Ultratex Exports; that Shailesh Varu was completely in charge of the job relating to the shipper in question. Ajay Varu, Shailesh Varu's brother confirmed the admissions made by Shailesh Varu and states further that BC Joshi, proprietor of the appellant firm trusted him and Shailesh Varu and gave shipping bills blank except for the signature of Joshi. On this basis notice was issued proposing cancellation of the CHA licence held by appellant.
2 We have heard the representative of the appellant and the Departmental Representative, who adopt the reasonings in the order impugned in the appeal.
3. The charges alleged that the appellant transferred his licence to Shailesh Varu, and not brought this fact to the notice of the Department, that Shailesh Varu was not its employee; appellant failed to exercise due diligence in ascertain the status of the export cargo and did not ensure that documents prepared and presented in the CHA was strictly in accordance with the orders, paid Rs. 125/- per container to Ambalica Enterprises in return of payments prescribed by the Custom House, and allowed the unapproved persons to sign the application to remove the containers. The officer who was appointed to enquire into these charges confirmed these allegations. Accepting this report/the Commissioner, in the impugned order revocation of the CHA licence.
4. The contention before the enquiry officer by the representative of the appellant that Shailesh Varu was in fact being paid Rs. 95/- per month as salary has not been accepted on the ground that it has not been shown that these payments were reflected in the income tax returns filed by it.
5. Enquiry officer's refusal to accept that Shailesh Varu was not being paid Rs. 125/- per month as salary because this payment was not reflected in the income tax return submitted by the appellant is not acceptable. There is no requirement that such payment has to be shown in the returns. However, as against this payment Shailesh Varu's admission that he was paying Rs. 125/- per container to the appellant goes against him. An employee is not expected to pay this such amount to his employer. The position is that while he was an employee on record, he was not in reality. Such an employee would rather in the nature of a free agent. However, it does not follow from this that the licence itself has been transferred to Shailesh Varu. Therefore, the first article of charge cannot be said to have been established. Consequently the second and third articles which relate to the first article also are not established.
6. Articles 4 and 5 alleging lack of to exercise due diligence in ascertaining correct information of export cargo and failing to ensure that the documents were strictly in accordance with the application are also not sustainable. The examination report on the reverse of the invoice was signed by the jurisdictional Superintendent at Ahmedabad. There is no allegation that this report was forged and was not actually signed by the Superintendent nor does it allege that the appellant has connived in the loading of cargo much less than what was not declared or in obtaining certificate from the Superintendent. The Superintendent who signed the report does not say, in his statement, that Shailesh Varu was aware or connived with the report which the Superintendent signed without supervising the shipment. He says that he handed over the blank certificate to Vijay, Manager of Ultratex Exports. It is therefore possible to infer that Shailesh Varu would have known that the certificate was fraudulent and the cargo contained in the container was less than the declared one. There is nothing to show that he communicated this to the knowledge of the appellant. Therefore, the charges could be established only to the extent that Shailesh Varu as an employee signed the documents or was permitted by the appellant to file the shipping bill signed by the appellant. While there are no specific charge as to the last, the fact remains that Shailesh Varu was given copies of blank shipping bills which at the last facilitated commission of frauds such as the present one.
7. Further, the allegation in article 6 that appellant charging Rs. 125/- per container which is in excess of the amount specified by the Commissioner has to be upheld. The Public Notice 11/90 issued by the Collector of Customs, Kandla which specifies the amounts which could be chargeable by the CHA did not provide for any amount chargeable for containers. The amount charged by the appellant for taking out the containers was contrary to such public notice which has been issued in terms of the regulations. Nominally Shailesh Varu was an employee of the appellant drawing a salary. Therefore, the charge that the application for removal of containers which was signed by Shailesh Varu was not permissible also is not supported.
8. Charges relating to excess payment and such minor procedural formalities are not such as would justify revocation of the licence. The relative law of gravity of such contravention should not have deserved such a severe punishment. However, the question is whether the activities of Shailesh Varu, who was a nominally employed by the appellant were such to justify revocation of the appellant's licence. From the facts that we have discussed above, particularly the payment that Shailesh Varu was making to the appellants and presence of blank shipping bills, it cannot be said that Shailesh Varu was acting as a bona fide employee of the appellant. However, assuming that Shailesh Varu was aware or knowingly facilitated attempting to claim drawback without exporting the goods, it is not possible to hold that the appellant knew or reasons to believe that Shailesh Varu was engaged in such a course of action. None of the statements recorded or other evidence brought on record, indicates any knowledge on the part of the appellant or its proprietor of the activities of Shailesh Varu. It appears likely that the appellant has placed undue trust and confidence in Shailesh Varu. This alone, however, is not, in our view, sufficient to revoke the licence once and for all.
9. Recovation of a licence is a grave punishment, as it deprives the person concerned of the means of livelihood for the rest of his lifetime. Having regard to the effect of involvement of the appellant's proprietor and absence of mala fides against him, we are of the view that while action against him was called for, it would not justify total revocation of the licence. The licence was suspended in February, 1995 and the appellant was without a licence for three years. This, we feel is sufficient punishment to the appellant. Only on this consideration and subject to the condition that Shailesh Varu does not continue in the employment of the appellant for dealing with Customs clearance or connected matters, we set aside the order impugned and allow the appeal.