Customs, Excise and Gold Tribunal - Mumbai
Bharat Overseas Communicators vs Commr. Of Cus. (General) on 12 December, 2006
ORDER Archana Wadhwa, Member (J)
1. Vide his impugned order, the Commissioner of Customs, has revoked the CHA Licence of the appellant and forfeited the security deposit on the allegations and findings of violation of the provisions of Custom House Agents Licencing Regulations, 2004.
2. After hearing both sides duly represented by Shri A.V. Naik, Ld. Advocate for the appellant and Shri Umashankar, Ld. D.R. for the respondent and after going through the impugned order, it is seen that the proceedings were initiated against the present CHA on the basis of detection of fraudulent export case by M/s Payal Exim, which was being handled by the present CHA. The disputed goods were declared as welding electrodes with varying declared unit rates, which, on examination, were found to be of low quality, less in quantity and of lesser value. One Mr. Jayesh Gala, who was the main person behind the export fraud admitted the offence and was arrested.
3. During the course of enquiry against the present CHA, statements of Mr. Bhagwan Sippy, Chief Executive Officer and Power of Attorney holder were recorded, wherein he deposed that Mr. Jayesh Gala was not their employee but was using CHA licence on commission basis. He also deposed that he had never met owner of M/s. Payal Exim and three blank letter heads signed by him were handed over to Mr. Jayesh Gala.
4. As a result of enquiry conducted against the said CHA, Enquiry Officer, vide his report dated 8-9-05, upheld the charges against the CHA. The Commissioner, while revoking the licence, has gone by the enquiry report.
5. The appellants strongly contended that Enquiry Officer's report is fallacious and the Commissioner, instead of acting upon the same in a mechanical manner, should have considered the allegations himself and should have arrived at a finding based upon independent evidence. Drawing our attention to statements of result of cross examination, Shri Naik, has submitted that the same have been misconstrued by the Enquiry Officer and there is nothing on record to show that the CHA was misutilising his licence.
6. The Revenue, on the other hand, has contended that the appellant was handling export of M/s Payal Exim without meeting the owner of the same and only at the instance of Mr. Jayesh Gala. Further, blank letter heads were handed over to Mr. Jayesh Gala with the sole intention of misutilising the same.
7. It is seen that the appellant CHA is a proprietary firm with Shri Vishnu Sippy being the sole proprietor. He was neither interrogated during the investigation, nor his statement recorded. We have seen the Power of Attorney executed in favour of Shri Bhagwan Sippy, which is a specific Power of Attorney and not a general Power of Attorney authorizing Mr. Bhagwan Sippy to take decisions on behalf of CHA firm. We also note that the said CHA firm which is a proprietary concern was not issued any show cause notice for cancellation of their licence. The notice was issued to Mr. Bhagwan Sippy, Chief Executive Officer. We further note that the Commissioner, in para 22 of his order, has observed that Shri Bhagwan Sippy was imposed with a penalty of Rs 3.00 lakhs for his role in aiding and abetting the export fraud in his individual capacity and as an employee of M/s Bhagwan Overseas Communicators. As such, even if some fraud is Committed, the same is by Mr. Bhagwan Sippy, in his individual capacity (emphasis provided) and not by the CHA firm. On this ground alone the impugned order is liable to be set aside.
8. In any case, we have seen the cross examination of Mr. Bhagwan Sippy during the course of personal hearing held before the Enquiry Officer. For better appreciation, we reproduce relevant question No. 1 and 2 and Shri Bhagwan Sippy's answers to the same:
Q. 1 - With reference to statement dated 16-1-2004 your have stated that Mr Jayesh Gala is looking after 50% clearance export document pertaining to M/s Bharat Overseas Communicators too. Is it true?
Ans. No. Mr Jayesh Gala use to bring business for us i.e. M/s. Bharat Overseas Communicators & also sometime he use to go to Customs with any man (employee) Mr Shantaram who has got a custom pass.
Q. 2 For what purpose Mr Jayesh Gala was used to go with your employee Shantaram? & in what capacity?
Ans. As a client he use to go their with my employee.
9. As such, it is clear from the above, that Shri Jayesh Gala was bringing business to the appellant and not acting as a CHA on the strength of the licence given to the appellant. Similarly Mr Jayesh Gala's examination conducted on 24-1-05 revealed as under:
Q.I What is your name?
Ans. My name is Jayesh Gala.
Q. 2 When did you join this CHA line and with whom you were attached and what type of work you were doing?
Ans. Since 2000 I am in CHA line and was attached with M/s. Premji Kalayanji & Co. as a customs clerk with customs pass with category 'TWO'. In 2001,1 left the job and surrendered the custom pass and started as liaisoning the DBK claim of various clients. I started export clearance work of various parties and use to get their clearance through CHA.
Q. 3. I am showing you a statement dated 1-3-2004 in which you have confirmed that you were using CHA license on Rental/Commission Basis on payment of Rs. 500/- per shipping bill in addition to normal Agency charges. Is it true?
Ans. No. It is not true. I use to get Commission of Rs. 500/- per shipping bill.
Q. 4. Please refer the same statement, you have stated that 1 EC code was already registered for M/s, Payal Exim. Even thought you have stated that 1 EC code is not registered? What is the actual fact?
Ans. IEC code was registered. But due to some technical reason it was not retrieved from the system. So I have taken permission for filing manual shipping bills.
Q. 5. For what purpose signed blank letter heads from CHA were obtained by you?
Ans. For amendment purpose and some urgent problem.
Q. 6. In what capacity you were holding, signed blank letter of CHA?
Ans. In the interest of my client.
Q. 7 Whether document of M/s. Payal Exim were passed and got examined by you?
Ans. No but I was present at the time of examination.
Q. 8. In your statement dated 1-3-04 you have stated that yourself and Mr Bhanushali has proceeded all the documents for clearance of the consignments pertaining to Payal Exim. No person from M/s Bhagwan Overseas was present while processing the said documents and examination of the said consignment is it true?
Ans. That was taken forcefully by D.R.I, which was also retracted in Esplende Court Mumbai. Photocopy of retracted is produced herewith. However I will produced a certified copy of the retraction shortly within 2 days. Photocopy taken on record.
10. The above examination of Mr Gala also reveals that he was only getting commission for procuring business for the appellant and was acting as a representative of M/s Payal Exim. The export goods were electrodes which were found to be electrodes only through of inferior quality. CHA is not under any obligation to verify the quality of the goods or to verify value of the same. As such, if the goods to be exported by M/s Payal Exim has been found to be lesser value, the appellant, as a CHA, cannot be blamed for the same. As such, we are of the view that revocation of his licence is neither justified nor warranted. The same is accordingly set aside and the appeal allowed with consequential relief.
(Pronounced in Court on 12-12-2006)