Custom, Excise & Service Tax Tribunal
K.S.Sawant & Co vs Commissioner Of Customs on 24 May, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.C/556/11 (Arising out of Order-in-Original No.CAO No.45/2011/CAC/CC(G) /SLM/CHA (Admn) dated 22/06/2011 passed by Commissioner of Customs (General), Mumbai) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, 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 : 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? ========================================
K.S.Sawant & Co. Appellant
Vs.
Commissioner of Customs Respondent
(General), Mumbai
Appearance:
Shri.D.H.Nadkarni, Advocate for appellant
Ms.D.M.Durando, Dy. Comm. (AR) for respondent
CORAM:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. P.R.Chandrasekharan, Member (Technical)
Date of Hearing : 24/05/2012
Date of Decision : /06/2012
ORDER NO
Per: P.R. Chandrasekharan
1. This appeal is directed against order-in-original No. CAO No.45/2011/CAC/CC(G) /SLM/CHA (Admn) dated 22/06/2011 passed by Commissioner of Customs (General), Mumbai.
2. The facts arising for consideration are as follows.
2.1 The DRI received intelligence about import of Multi-channel monitoring system in the guise of advanced pulse oximeter systems by misdeclaration of the product. The importer was M/s. Advanced Micronics Devices Ltd. and the CHA involved was M/s.K.S.Sawant & Co. On the basis of the report of the DRI, the CHA licence was suspended vide order No.53/2008 dated 19/09/2008 and the suspension was revoked vide order No.151/09 dated 25/03/2009 based on the representation made by the CHA. An inquiry was initiated against the CHA with respect to their role in the alleged transaction. Statements of Shri Badrinath Sirsi, Vice President (Marketing Of M/s. Advanced Micronics Devices Ltd., was recorded, wherein he admitted that the misdeclaration of the imported goods was done in co-ordination with the clearing agent, Shri Sunil Chitnis of M/s.M.S. Shipping Agency. Shri Sunil Chitnis in his statement given before the DRI admitted that he had used the CHA licence of M/s.K.S.Sawant & Co., as a sub-agent for clearance of the medical equipment imported by M/s. Advanced Micronics Devices Ltd., and admitted to the under valuation. A statement of Shri.Ashish Patekar, authorised signatory of M/s.K.S.Sawant & Co. was recorded wherein he admitted that Shri Sunil Chitnis was using his CHA licence and he used to bill him for using the licence and in all 9 to 10 consignments were imported for which he had charged Shri Sunil Chitnis @ Rs.500/- to Rs.1000/- depending upon the weight of the cargo. A charge sheet was issued to the CHA alleging violation of Regulation of 12 of CHALR 2004 for sub-letting their licence to Shri Sunil Chitnis. Regulation 13 (a) for non-procurement of authorisation from the importer for undertaking the transaction, Regulation 13 (b) for transacting the business through Shri Sunil Chitnis who was not an employee. On conclusion of the inquiry, the charges were held to be proved by the inquiry officer. On the basis of the inquiry report, the impugned order has been passed revoking the licence of M/s.K.S.Sawant & Co. under Regulations 22 (7) of CHALR 2004. Hence, the appellants are before us.
3. The Ld. Advocate for the appellant submits that there is no evidence to show that the CHA licence was sold or transferred to Shri Sunil Chitnis of M/s.M.S. Shipping Agency for a monetary consideration and therefore, there is no violation of Regulation 12. Shri Sunil Chitnis of M/s.M.S. Shipping Agency was acting as intermediary/agent to generate business for the CHA and under CHALR 2004 there is no bar in accepting business from intermediary. He relies on the judgement of this Tribunal in the case of P.P.Dutta reported in 2001 (136) ELT 1042 (Tri-Del) in support of the above arguments.
3.1 The Ld. Advocate further submits that there is no violation of Regulation 13 (a) inasmuch as they had obtained an authorisation from the importer for undertaking the transaction. As regards the violation of Regulation 13 (b), the Advocate submits that the business has been transacted through their own employees and all the documents submitted to the Customs would prove this fact and, therefore, the charge of violation of Regulation 13 (b) is also not sustained. He further submits that even though he has billed M/s.M.S. Shipping Agency for the transaction undertaken, the name of client, M/s. Advanced Micronics Devices Ltd., is mentioned in the bill. The billing was done to M/s. M.S. Shipping as he brought the customer. In the light of these submissions he prays for setting aside the order of revocation.
4. The Ld. AR appearing for the Revenue submits that as per the statement recorded from Shri Ashish Patekar, authorised signatory of the appellant CHA, there is a clear admission that the appellant did not know their clients directly and they knew them only through Shri Sunil Chitnis. It is also an admitted position that Shri Sunil Chitnis was using the CHA licence and this was done so as to help to Shri Sunil Chitnis to overcome his financial crisis. It is also on record that even though the appellant had signed the Customs documents, the filing of the documents and clearance of goods was undertaken by Shri Sunil Chitnis and, therefore, it cannot be stated that the appellant has not violated the provisions of the CHALR, 2004. Accordingly he prays for upholding the impugned order.
5. We have carefully considered the rival submissions.
5.1 From the records, it is clear that the business in respect of the client M/s. Advanced Micronics Devices Ltd., was brought in by Shri Sunil Chitnis, who claims himself to be a sub-agent of the appellant CHA. The statements of Shri Badrinath and Shri Sunil Chitnis amply proves this fact. The question is merely because the appellant procured the business through an intermediary who is not his employee, can it be said that he has sub-let or transfered the business to intermediary. The Tribunal in the case of Commissioner of Customs Vs. Chhaganalal Mohanlal & Co. Ltd., held that if the Customs clearance has been done through intermediary and business was got through intermediary, the same is not barred by the provisions of CHALR, 2004 and it cannot be stated that the appellant has sub-let or transferred his licence. In the case of Krishan Kumar Sharma Vs. Commissioner of Customs New Delhi reported in 2000 (122) ELT 580 (Tri), this Tribunal held that the mere fact of bills raised on the intermediary cannot be held against the CHA firm to prove that the CHA licence was sub-let or transferred. Therefore, in the light of the judgements cited above, the charge of violation of Regulation 12 is not established. As regards the violation of Regulation 13 (a), the adjudicating authority himself has observed that the I have no doubt to say that the CHA might have obtained the authorisation but it is surely not from the importer. Therefore, the authorisation submitted is not a valid one. This finding is based on a presumption. Obtaining an authorisation from the importer does not mean that the same should be obtained directly; so long as the concerned import documents were signed by the importer, it amounts to authorisation by the importer and, therefore, it cannot be said that there has been a violation of Regulation 13 (a). As regards the last charge, i.e. the appellant did not transact the business through his employee but through Shri Sunil Chitnis thereby violating the provisions of Regulation 13 (b), there is some merit in the argument. Both Shri Sunil Chitnis and Shri Ashish Patekar, authorised signatory of the appellant CHA, has admitted that it was Shri Sunil Chitnis, who undertook the clearance work on behalf of the CHA. Mere signing of the documents does not prove that the clearances were undertaken by the appellant CHA and, therefore, there is some merit in the argument that Regulation 13 (b) has been violated by employing Shri Sunil Chitnis for doing the clearance work of M/s. M/s. Advanced Micronics Devices Ltd. The question now is whether revocation of licence is warranted for such a violation. In our view, the punishment should be commensurate with the gravity of the offence. Revocation is an extreme step and a harsh punishment, which is not warranted for violation of Regulation 13 (b). Accordingly, we are of the view that forfeiture of security tendered by the appellant CHA is sufficient punishment and revocation is not warranted. Accordingly, we set aside the order of the revocation and direct the Commissioner of Customs (General) to restore the CHA licence subject to the forfeiture of entire security amount tendered by the CHA.
(Pronounced in Court..) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 7