Custom, Excise & Service Tax Tribunal
Frontier Shipping Agency Pvt Ltd vs Commissioner Of Customs (General), ... on 17 June, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Application C/MA/ORS/641/10 & Appeal No. C/419/09 (Arising out of Order-in-Original No. 139/09 (No. 8-82/2008-Admn/1984) dated 4.3.2009 passed by Commissioner of Customs (General), Mumbai.) For approval and signature: Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K.Gaule, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Frontier Shipping Agency Pvt Ltd Appellant (Represented by: Shri C.K. Dawar, Director) Vs Commissioner of Customs (General), Mumbai Respondent (Represented by: Dr T.Tiju, SDR) CORAM:
Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K.Gaule, Member (Technical) Date of Hearing : 17.06.2010 Date of Decision: 17.06.2010 ORDER NO..
Per: P.G. Chacko
1. The appeal is by a Customs House Agent who is aggrieved by the suspension of the CHA Licence. The appellant was the Customs House Agent of numerous exporters who exported readymade garments under claim for drawback. After investigations into such exports, the Directorate of Revenue Intelligence (DRI) framed a case of fraud against the exporters. The DRI found that the exporters had indulged in gross overvaluation of the export goods with intent to get undue benefit of drawback. The DRI also found the CHA to have abetted the offence of the exporters and accordingly, sent a report to the Commissioner on 11.12.08 about the role played by the appellant as CHA of the aforesaid exporters. This report came to be placed before the Commissioner on 15.12.08. On 17.12.08, the Commissioner suspended the CHA licence under Regulation 20 (2) of the Customs House Agents Licensing Regulations (CHALR, for short) 2004 vide Order No 92/2008. Later on, after giving the CHA an opportunity of being heard, the Commissioner confirmed the suspension order. The present appeal is against this confirmatory order of suspension passed by the Commissioner.
2. Also arising before us is what was registered as Miscellaneous Application (No. 641/10) of the appellant. On a perusal of this application, we note that it is an elaborate narration of the appellants case and does not seek any specific relief to be granted. The Managing Director of the company, who filed the appeal and the so-called application, gives an account of the facts of the case and reiterates the grounds of the appeal as well as the averments made in the application. It is submitted that the delay involved in the suspension of the licence is enough to rele out urgency for immediate action under Regulation 20 (2) against the appellant. It is submitted that the exports in question had been made in October to December 2007 but the licence was suspended as late on 17.12.2008. As no urgency was brought out, the suspension order is liable to set aside. It is also pointed out that a statement of the CHA had been recorded under Section 108 of the Customs Act as early as on 6.2.2008 and a statement of their employee Mr Vishwas Lanke was also recorded shortly thereafter, but it took ten months since then for the Commissioner to suspend the CHA licence. According to the appellant, there is no satisfactory explanation for this delay. It is also submitted that any statement recorded under Section 108 of the Act was not to be relied upon by the Commissioner for disciplinary action against the CHA under the CHALR, 2004. Referring to the facts of the case, the appellant submits that they had duly discharged their obligations under the Regulations in respect of the exports in question and that they had no liability after the department issued Let Export Order in respect of those consignments. The appellant has also argued that the learned Commissioner has chosen to attribute fraud and collusion to the appellant in his order even though none of these expressions had been used in the relevant show-cause notice. It is also pointed out that, in the appeal filed by the CHA against the order passed by the Commissioner in adjudication of show-cause noticed dated 26.12.2008 (issued to the exporters and others including the CHA), this Tribunal was pleased to grant waiver of pre-deposit and stay of recovery in respect of the penalties imposed on the CHA.
3. The appellant has also referred to the ongoing inquiry proceedings against him. A show-cause notice under Regulation 22 (1) was issued to the CHA on 13.2.2009 and a statement of defence was filed by the CHA on 10.04.2009. An inquiry officer was appointed by the Commissioner and he has since held two hearings on 22.10.09 and 14.6.10. A list of documents has been filed by the CHA, before the inquiry officer. The CHA wanted to cross-examine that person whose statement under Section 108 of the Act was prejudicial to the CHA before the inquiry officer and a prayer in this behalf was made before that officer. The inquiry officer issued summons to the above witness but the latter did not turn up for cross-examination.
4. The learned SDR has filed a compilation of judgments so as to rebut the grounds of this appeal. He has, however, referred to only one judgment and the same is Order No. A-164/CSTB/WZB/MUM/2009/C-II dated 16.07.2009 passed by this Bench in (appeal C/1119/08) Baraskar Brothers vs Commissioner of Customs (General), Mumbai. It is submitted that the decision rendered by this Bench in the case of Baraskar Brothers is an effective counter to the grounds raised in the present appeal. The learned SDR further submits that, as the inquiry proceedings are under way, it may not be appropriate, nor expedient, for this Tribunal to interfere with the suspension order of the Commissioner at this stage. The learned SDR has also contested the claim of the appellant that his role as a CHA was over with the issue of Let Export Order by the proper officer of Customs.
5. We have given careful consideration to the submissions. As we have already noted, at the outset, that the so-called miscellaneous application contains no specific prayer for any interlocutory relief. It is only a narrative account of the facts of the case as also of the appellants contentions against the Commissioners order. Therefore, there is no occasion for us to make any order on the said application. Nevertheless, we have heard the appellant, who has reiterated the averments contained in the said application. We are considering those averments also.
6. The grounds of this appeal are limited. The very first ground raised by the appellant is that the suspension order passed by the Commissioner is too belated to justify his plea of urgency under Regulation 20 (2) of the CHALR. The exports, in question, were made by the CHAs clients during November-December 2007. The DRI subsequently started investigations. Even according to the appellant, these investigations were concluded by 10.12.2008. It appears from the records that the DRI tendered a report to the Commissioner on the very next day (11.12.08) about the role played by the CHA in relation to the above exports. However, this report was put up before the Commissioner on 15.12.08 only. This fact has not been disputed by the appellant. The Commissioner passed his provisional order of suspension of licence on 17.12.08 holding that continued transaction of business by the CHA might be prejudicial to the interests of the revenue in the facts and circumstances reiterated by the investigating agency. The order was, of course, passed without personal hearing. However, the learned Commissioner subsequently offered to the CHA an opportunity of being heard on the question whether the suspension should be continued or not. The CHA was accordingly heard. The learned Commissioner, by a speaking order on the said question, held that there was no reason to vary the earlier order of suspension. The present appeal is against the confirmatory order of suspension. In the aforesaid circumstances, it cannot be said that there was any delay, whatsoever, on the part of the Commissioner in suspending the licence. Another ground raised in the appeal is regarding the admissibility of statements recorded under Section 108 of the Act as evidence in disciplinary proceedings against the CHA under the CHALR. Yet another ground raised by the appellant is about the scope of CHAs function in relation to export of goods. These are aspects which have to be considered by the Commissioner after examining the inquiry report. The grievance of the appellant against the use of expressions like collusion and fraud by the Commissioner can also be redressed by the Commissioner himself at the appropriate stage.
7. An oft-repeated grievance of the appellant today is that the company is without any business for the last 1= years and their employees without a livelihood. This grievance, however, is not reflected in the grounds of appeal.
8. As we have already noted, the inquiry proceedings against this appellant have already made a headway inasmuch as a show-cause notice under Regulation 22 was issued on 13.2.09, an inquiry officer was appointed shortly thereafter, the statement of defence of the CHA was submitted on 10.4.09 and a few hearings were conducted by the inquiry officer since then. We understand that the delay, if any, on the part of the inquiry officer is on account of the CHAs witness not having responded to the summons issued by the inquiry officer, for which the latter cannot be blamed. At this stage, it is for the CHA to decide whether they should insist on cross-examining the said witness. In case they decide to avoid such cross-examination, it appears, the inquiry proceedings can be taken ahead smoothly in the interest of the CHA. We trust, in this regard, the CHA would fully co-operate with the inquiry officer. In this scenario, we find this to be a fit case for disposal accompanied by issuance of appropriate directions to the inquiry officer and the Commissioner inasmuch as such a course of action is bound to serve the ends of justice for the CHA as well.
9. Accordingly, without interfering with the order of suspension of CHA licence, we dispose of this appeal with the following directions:
(a) The inquiry officer shall complete his proceedings within 30 days from the date of receipt of a certified copy of this order and the appellant shall wholeheartedly co-operate with the inquiry officer for time-bound conclusion of the proceedings;
(b) The inquiry officer shall submit his report to the Commissioner of Customs within seven days from the date of conclusion of the proceedings;
(c) The learned Commissioner of Customs shall take final decision in the matter within a further period of 30 days thereafter after examining the said report and giving the appellant a reasonable opportunity of being heard.
10. The miscellaneous application also is disposed of for the record.
(Dictated in Court.) (S.K.Gaule) Member (Technical) (P.G. Chacko) Member (Judicial) rk 8