Custom, Excise & Service Tax Tribunal
M/S. Rishad Shipping & Clearing Agency ... vs Commissioner Of Customs, Mumbai on 19 October, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPLICATION NO. C/S/766/10 APPEAL NO. C/359/2010 (Arising out of Order-in-Original No. 37/2010 dated 07.04.2010 passed by the Commissioner of Customs (General), Mumbai.) For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. M Veeraiyan, 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?
====================================================== M/s. Rishad Shipping & Clearing Agency Pvt. Ltd. Appellant Vs. Commissioner of Customs, Mumbai Respondent Appearance: Shri V.N. Ansurkar, Advocate for appellant Shri B.P. Pereira, Authorised Representative (JDR), for respondent CORAM: Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr.M Veeraiyan, Member (Technical) Date of Hearing: 19.10.10 Date of Decision:19.10.10 ORDER NO Per : P.G. Chacko
The appeal is against the order dated 07.04.2010 of the Commissioner of Customs (General), Mumbai debarring the appellant (CHA) from operating in Mumbai Customs Zone under Regulation 20(c) of the Customs House Agents Licencing Regulations (CHALR for short), 2004. The application is for stay of operation of the Commissioners order. After examining the records and hearing both sides, we are inclined to dispose of the appeal itself finally and, accordingly, we take up the appeal.
2. The appellant M/s Rishad Shipping & Cleaning Agency Pvt. Ltd. obtained a licence from the Commissioner of Customs, Indore (Licence No. IND/R-I/99) in the year 1999 for operating business in any Customs Station in India. The appellant obtained permission from the Commissioners of Customs, Mumbai, Ahmedabad, Chennai and Kolkata to operate business in the respective Customs Zones, on the strength of the licence issued by the Indore Commissioner. The permission of the Commissioner of Customs (General), Mumbai was obtained on 9.11.2000 (No.11/1149) and, accordingly, the appellant was authorised to transact business in Mumbai Customs House. This permission, which was valid upto 31.12.2004, was renewed from time to time, the last of these renewals having been obtained on 9.2.2005.
3. The impugned order was passed on the basis of an inquiry report dated 16.11.2009 (obtained under Regulation 22) which reported that the appellant had failed to comply with Regulation 13(k) and (n) of CHALR, 2004. The inquiry had been ordered into three charges framed against the CHA by the Commissioner in relation to their conduct in connection with certain import made by one M/s. Montu Enterprises, Ulhasnagar, Thane in December, 2007. The said importer had filed a Bill of Entry on 12.12.2007 for clearance of what was declared to be Chinese toys. Physical examination of the goods revealed that the consignment contained wrist watches, digital cameras and many other non-declared goods instead of Chinese toys. Considering the conduct of the CHA in relation to the above import, the Commissioner of Customs (General) Mumbai suspended the operation of Licence No. 11/1149 with immediate effect by order dated 16.05.2008, which was, later on, revoked by him by order dated 14.7.2008. Subsequently, the Commissioner issued notice dated 9.3.2009 framing three charges against the CHA. It was alleged that the CHA had violated Regulation 13(d) (Charge I), 13(k) (Charge II) and 13(n) (Charge III). The CHA filed their written statement of defence vis-`-vis these charges. The Commissioner appointed an Inquiry Officer who, upon completion of enquiry, submitted a report, wherein the CHA was exonerated from Charge I and found guilty of the other charges. It was acting upon this Inquiry Report that the learned Commissioner of Customs passed the impugned order debarring the CHA from operating business in Mumbai Customs Zone.
4. In the present appeal, the CHA submits that the Commissioners order is based on extraneous considerations. Elaborating the grounds of the appeal, the learned Counsel for the appellant submits that the learned Commissioner travelled beyond the scope of the show-cause notice to indict the appellant in relation to a case of alleged smuggling of red sandal woods. It is submitted that the learned Commissioner relied on another order dated 8.3.2010 whereby he had himself suspended Licence No. 11/1149 on the basis of findings recorded in relation to the said case of alleged smuggling of red sandal woods. It is also submitted that the said order dated 08.03.2010 is under challenge in Appeal No. C/377/2010. The learned Counsel submits that the Commissioners earlier order dated 08.03.2010 pertains to a case wherein investigation is still under way. The learned Counsel further points out that the learned Commissioner also chose to rely on another complaint against the CHA, wherein the CHA had allegedly sub-let their licence to various operators at Mumbai. The said complaint was still under investigation when the impugned order was passed. Therefore, it is submitted, the learned Commissioner passed the impugned order by placing reliance on extraneous factors. With regard to the charges against the appellant, it is submitted that all the charges pertain to minor technical infractions and none of them could attract such a serious punishment as debarring ordered by the Commissioner. It is submitted that the first charge was dropped by the Commissioner on the basis of the Inquiry Report which was in favour of the CHA on the point. The learned Commissioner agreed with other findings of the Inquiry Officer without proper application of mind. In this connection, the learned Counsel refers to the Inquiry Report and submits that the findings recorded by the Inquiry Officer are ambiguous and do not disclose any cogent reason to indict the CHA under Regulations 13(k) and (n) of the CHALR, 2004. It is prayed that the Commissioners order be set aside and the appeal be allowed.
5. We have heard the learned JDR also who has reiterated the findings of the learned Commissioner.
6. After considering the submissions, we have found strong reasons to interfere with the Commissioners decision. The charges against the CHA were framed with reference to Regulations 13(d), (k) and (n) of the CHALR, 2004. The first charge was dropped. The second and third charges were held to have been proved. The articles of charges are reproduced below:-
1. Article of Charge I : As per Regulation 13(d) of the CHALR, 2004 A Custom House Agent shall advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Deputy / Assistant Commissioner of Customs.
In the instant case, Shri Mitul Poddar, employee of the CHA Firm M/s. Rishad Shipping & Clearing Agency Pvt. Ltd. in his statement dated 8.1.2008 admitted that the DEPB Licence No. 1210004105/5.1.2006 was utilised for the clearance of the said Bill of Entry by the CHA on their own, without being asked by the importer to do so. Thus, the CHA took their own decision to utilise the DEPB Licence without consulting the Importer and the same has not been brought to the notice of the Authority. Therefore, the CHA failed to comply with the provisions of Regulation 13(d) of the CHALR, 2004.
2. Article of Charge II : As per Regulation 13(k) of the CHALR, 2004 A Custom House Agent shall maintain records and accounts in such form and manner as may be directed from time to time by a Deputy Commissioner of Customs or Asst. Commissioner of Customs and submit them for inspection to the said Deputy / Asst. Commissioner of Customs or Officer authorized by him whenever required.
In this case, Shri Mitul Poddar, employee of the CHA Firm M/s. Rishad Shipping & Clearing Agency Pvt Ltd. in his statement dated 8.1.2008 admitted that the Job Register was not maintained properly. Further, Shri Behram Dadademery, MD of the CHA Firm, in his statement dated 9.1.2008 accepted that the Job Register was not maintained properly and the instant entry of M/s. Montu Enterprises was not made therein. Further, the CHA in the written submission dated 21.05.2008 has confirmed that after a certain period, all entries of Bills of Entries and Shipping Bills are made in the job register. That since the processing of bill of entries / shipping bill is computerized, the moment a Bill of Entry is filed, the details of Bills of entries are available in the system against that particular CHA. The CHA has admitted that they have been making entry in the job register only after completely processing the documents.
Since the CHA himself admitted that they have not maintained the Job Register, it is prima facie proved that the CHA failed to comply with the provisions of Regulation 13(k) of the CHALR, 2004.
3. Article of Charge III : As per Regulation 13(n) of the CHALR, 2004 A Custom House Agent shall ensure that he discharges his duties as Customs House Agent with utmost speed and efficiency and without avoidable delay.
In the instant case, Shri Mitul Poddar, Executive Manager of the CHA Firm M/s Rishad Shipping & Clearing Agency Pvt Ltd., CHA No. 11/1149, in his statement recorded on 8.1.2008 admitted that DEPB Licence No. 1210004105/5.1.2006 was utilised for the clearance of the said Bill of Entry by the CHA on their own without being asked by the Importer to do so. He further accepted that the Job Register of the CHA was not maintained properly. Shri Behram Dadademery, MD of the CHA Firm M/s. Rishad Shipping & Clearing Agency Pvt Ltd., in his Statement recorded on 9.1.2008 accepted that the Job Register was not maintained properly and the instant entry of M/s. Montu Enterprises was not made therein.
It is thus clear from the above that the CHA failed to discharge his duties with efficiency. Therefore, the CHA did not comply with the provisions of Regulation 13(n) of the CHALR, 2004. Obviously, in Charge III, the Commissioner reiterated the CHAs conduct with reference to DEPB Licence dated 5.1.2006. The first charge was that the CHA utilized his DEPB credit for payment of duty on the goods imported by their client, without being asked to do so. The very same fact was reiterated in the context of framing Charge III against the CHA, clearly disclosing overlapping of allegations between Charges I and III. Charge II pertains to maintenance of Job Register by the CHA. It was alleged that the CHA had not properly maintained the Job Register. This very allegation was repeated under Charge III to hold that the CHA had committed breach of Regulation 13 (n). Thus the grievance raised by the appellant against the articles of charges framed by the Commissioner appears to be genuine. As rightly pointed out by the learned Counsel, the Inquiry Officers report is also vitiated by the fact that the charges framed by the Commissioner in the aforesaid manner were found to have been proved. The learned Commissioner passed the order without application of mind to the above infirmities of the Articles of Charges and the Inquiry Officers findings.
7. The first charge was found to be not proved in the Inquiry Officers report and that finding was accepted by the learned Commissioner. As regards the second charge pertaining to maintenance of Job Register, we note that the case of the appellant is that all the relevant entries were made and maintained in the EDI system and, therefore, it cannot be said that the CHA did not properly maintain the register. The impropriety, if any, in the matter of maintaining register is too insignificant to invoke Regulation 13(k). We find that this case of the appellant has not been successfully rebutted. The Revenue has no case that the necessary entries were not made in the computerized system. We are of the considered view that it may not be reasonable or justifiable to indict the CHA under Regulation 13(k) on the ground that certain entries which were made in the computerized format were not immediately made available in the manual register. We are, therefore, inclined to discharge the appellant from Charge II.
8. We have already given enough indication of the shabby manner in which Charge III was formulated against the CHA. The very allegation raised under Charge I was repeated under Charge III. We have also found similar repeation of non-maintenance of register (subject-matter of Charge II) under Charge III. The learned Commissioner himself dropped Charge I and we have dropped Charge II. Consequently, Charge III also shall stand dropped.
9. In the result, the order of the Commissioner has to be set aside. It is ordered accordingly. The appeal is allowed. Stay petition also stands disposed of.
(Pronounced in Court) (M Veeraiyan) Member (Technical) (P.G. Chacko) Member (Judicial) nsk 1 9