Custom, Excise & Service Tax Tribunal
M/S Dakor Clearing & Shipping Pvt. Ltd vs Commissioner Of Customs (General), ... on 17 March, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. III Appeal No. C/85063/15 (Arising out of Order-in-Original No. 114/CAC/CC(G)/SRP/CBS (Admn) dated 19.11.2014 passed by the Commissioner of Customs (General), Mumbai). For approval and signature: Honble Shri Anil Choudhary, Member (Judicial) Honble Shri P.S. Pruthi, 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 Dakor Clearing & Shipping Pvt. Ltd. Appellant Vs. Commissioner of Customs (General), Mumbai Respondent Appearance: Shri S.N. Kantawala, Advocate for Appellant Shri S.J. Sahu, Assistant Commissioner (AR) for Respondent CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) SHRI P.S. PRUTHI, MEMBER (TECHNICAL) Date of Hearing: 17.03.2015 Date of Decision: .2015 ORDER NO. Per: Anil Choudhary
This is an appeal filed by the appellant, M/s Dakor Clearing & Shipping Pvt. Ltd., against Order-in-Original No. 114/CAC/ CC(G)/SRP/CBS (Admn) dated 19.11.2014 passed by the Commissioner of Customs (General), Mumbai whereby the CHA licence of the appellant has been revoked.
2. The brief facts of the case are that the appellant is holder of the CHA Licence No. 11/954. They have been granted CHA License under Regulation 10(1) of the CHALR, 1984 read with Regulation 9(1) of CHALR, 2004 read with Regulation 7(1) of CBLR, 2013 in Mumbai Customs.
2.1 A specific intelligence was received in the Directorate of Revenue Intelligence (DRI), that one Salim Lalani operating in the name of M/s Mahek Consultancy Services was engaged in the large scale import clearances of miscellaneous goods by using various CHA licenses. Accordingly, the office premises of M/s Mahek Consultancy Services were searched under panchanama dated 20.11.2008 and certain files, register, documents and Indian currency of Rs.1,30,000/- were recovered. The documents showed that the clearances were also effected using the CHA license of M/s Dakor Clearing & Shipping Pvt. Ltd. (appellant).
2.2 The premises of the present appellant were inspected on 21.11.2008 and the dockets pertaining to M/s Mahek Consultancy Services were taken over under summons and the live consignments of the CHA were put on hold for further investigation. In the meantime, the Bills of Entry filed for the import consignments by the appellant CHA - M/s Dakor Clearing & Shipping Pvt. Ltd. were kept on hold to avoid the unauthorized sub-agents from clearing the goods, under these Bills of Entry.
2.3 Statement of Shri Salim S Lalani, the proprietor of M/s Mahek Consultancy Services was recorded on 24.11.2008 under Section 108 of the Customs Act, wherein he stated that he did not have the CHA license; that he met Shri Nimesh Joshi, Managing Director of M/s Dakor Clearing & Shipping Pvt. Ltd. and requested him to allow him to clear the import consignments of his clients by using his name and CHA license; that Shri Nimesh Joshi agreed to lend him the name and license of his CHA company and it was agreed that M/s Dakor Clearing & Shipping Pvt. Ltd. would raise a bill directly in the name of his clients; that the CHA firm issued Customs Pass and BPT pass in the name of his brother Shiraz Lalani and Vinod Manjrekar showing them as their employees; that the role of the CHA was restricted to signing documents and all the work relating to the clearance of consignment was looked after by employees of M/s Mahek Consultancy Services; that he had filed around 25 Bills of Entry using the name and license of appellant-CHA firm.
2.4 Further, statement of Shri Nimesh J Joshi, Managing Director of the CHA firm was also recorded on 21.11.2008 under Section 108 of the Customs Act, wherein he stated that Salim Lalani had visited his office with the proposal of handling clearances of import of consumer goods from China; that Shri Salim asked him to clear the consignments through the CHA firm and agreed to pay Rs.10,000/- to Rs.12,000/- per job; that he allowed Salim Lalani to clear the goods for their clients under his CHA firm; that Salim brought 24 jobs of clearance of import consignments of various importers during the period 28.9.2008 to 4.10.2008; that since they filed the documents with the Customs online, Salim Lalani had given him documents like authorization, invoice, packing list, Bill of Lading, IEC code and GATT declaration of the respective importer; that the follow up and clearance related work like group passing, examination and delivery were handled by Salim Lalani through his persons namely, Vinod Manjrekar, Siraj Lalani and Feroz Lalani; that he did not interact with the individual importer/party whose jobs for clearance was brought by Salim Lalani; that he was aware that 9 of the IEC holders namely M/s Carol Enterprises, M/s Catelite Enterprises, M/s Fedex Traders, M/s Atlas Impex, M/s ASR Enterprises, M/s Mansoor Arts, M/s Flex Overseas, M/s Shivam Traders and M/s Manj International in whose name the above goods were imported, were fake.
2.5 In view of the above, it appeared to the Revenue that appellant/CHA firm has contravened the provisions of Regulations of the CHALR, 2004. Therefore, the CHA License No. 11/954 was placed under suspension vide Order No. 141/2009 dated 6.3.2009 under the provisions of Regulation 20(2) of CHALR, 2004 for suspected violation of Regulations of CHALR, 2004 and inquiry proceedings were initiated under Regulations 22 of CHALR, 2004 vide notice dated 8.6.2009. On the basis of the relied upon documents, the following Articles of Charges were framed against the CHA vide Notice dated 8.6.2009: -
Article of Charge I: As per Regulation 12 of the CHALR, 2004 every license granted or renewed under these regulations shall be deemed to have been granted or renewed in favour of the licensee and no license shall be sold or otherwise transferred.
Article of Charge II: As per the provisions of Regulation 13(a) A CHA shall obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as CHA and produce such authorization whenever required by the Dy. Commissioner of Customs or the Assistant Commissioner of Customs. Article of Charge III: As per Regulation 13(b) of the CHALR, 2004 A CHA shall transact business in the Customs Station either personally or through an employee duly approved by the Dy. Commissioner of Customs or the Assistant Commissioner of Customs. Article Charge IV: As per Regulation 13(d) of the CHALR, 2004 A CHA 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 Dy. Commissioner of Customs or the Assistant Commissioner of Customs. Article Charge V: As per Regulation 13(n) of the CHALR, 2004 A CHA shall ensure that he discharge his duties as CHA with utmost speed and efficiency and without avoidable delay.
Article Charge VI: As per Regulation 19(8) of the CHALR, 2004 A CHA shall exercise such supervisions as may be necessary to ensure the proper conduct of any such employees in the transaction of business as agents and be held responsible for all acts or omissions of his employees in regard to their employment. 2.6 The Inquiry Officer submitted his inquiry report vide letter dated 8.7.2014 wherein he held all the six charges as not proved against the CHA. The findings of the Inquiry Officer are as under: -
(i) The Inquiry Officer has stated that prima facie the Presenting Officer while making his submission that all the charges has been proved had squarely relied upon the confessional statement made by Shri Nimesh Jayantilal Joshi, MD of M/s Dakor Clearing & Shipping Pvt. Ltd., Shri Salim Lalani, Shri Javed Lalani and Shri Vinod Manjerekar recorded under Section 108 of Customs Act, 1962 during the course of preliminary investigation conducted at the time of registering cases against certain importers by the officers of DRI, by taking the support of some case laws. The case laws referred to, no doubt speak that the confessional statements given voluntarily shall have evidential value. Against this version of the Presenting Officer, the charged CHA has contested that the persons concerned were neither examined nor cross examined in the Enquiry proceedings, hence their statements shall not be taken into consideration. The inquiry officer has stated that he accepts the proposition made by the Presenting Officer regarding the validity and evidential value of confessional statement given voluntarily, at the same time, some weightage needs to be given to the version of the charged CHA that he was deprived of cross examining those persons whose statements were declared to be confessional. In this regard Inquiry Officer is of the opinion that it is required to be noticed that unless the persons concerned are examined and cross examined, it cannot be conclusively held whether the statements are voluntary or otherwise. Keeping aside this particular aspect of legal and technical nature, Inquiry Officer has further attempted to analyze the defense submission of the charged CHA with reference to the Article of Charges framed against them.
(ii) The Inquiry Officer has stated that the salient points that are urged by the charged CHA are as under: -
(a) It was stated that in his statement Shri Nimesh Joshi has deposed that he was aware that 9 IECs of 9 different firms were fake, which formed the basis for levelling charges against him. However there was no evidence established against the fake nature of the IECs. In as much as 2 persons have signed on authorization given to the CHA, one in the capacity of Proprietor and another in the capacity of partner, it was alleged the IECs were fake. However, their individual statements were not recorded nor relied upon, neither made available.
(b) The charge of transferring of licence is based on term used lending of licence as available in the relied upon statements of Shri Nimesh Joshi and Shri Salim Saddrudin Lalani. However the statements categorically speak out that the charged CHA has taken the assistance of Shri Lalani in developing business which does not amount to lending or transferring licence.
(c) While the Presenting Officer has squarely relied upon the statements of persons such as Shri Salim Saddrudin Lalani, Shri Javed Lalani and Shri Manjrekar and concluded that the statements are of confessional nature. However, it is to be noted from the status of the persons concerned, their educational qualifications etc., the language available in the statement is not in tune with the qualifications and status and gives an impression that the statements are not voluntary.
2.7 The Commissioner of Customs (General), vide the impugned order, held that the Inquiry Officer has miserably failed in bringing out the correct facts to the notice of the disciplinary authority, as the CHA has failed in performing their duties and committed various acts which display their lack of adherence to the CHALR, 2004 and are found to be culpable for violation of the impugned regulations of CHALR, 2004. He also held that the CHA deserves punishment proportionate to violations of various provisions of CHALR, 2004. Accordingly, in exercise of the powers conferred under Regulation 22(7) and 20(1) of the CHALR, 2004, the Commissioner ordered for revocation of the CHA License of the appellant, M/s Dakor Clearing & Shipping Pvt. Ltd., with immediate effect and also ordered for the forfeiture of entire amount of Security Deposit.
2.8 Being aggrieved, the appellant-CHA is in appeal before this Tribunal.
3. The learned Counsel for the appellant submitted that on 04.03.2009, the CHA licence was suspended by an ex-parte order by the respondent. The licence continued to remain under Suspension and the charge-sheet under the Regulations came to be issued on 08.06.2009. Pursuant to the completion of the Inquiry, the Presenting Officer submitted a Brief Report dated 5.2.2013, copy received by the CHA on 24.2.2013. A reply was filed before the Inquiry Officer by written submission dated 16.05.2013. All the articles of charges were denied by the appellant CHA. By report dated 08.07.2014, the Inquiry Officer filed his report and held that none of the Articles of Charges have been proved. The Commissioner issued a Disagreement Memo on 04.08.2014 and thereafter by Written Submissions dated 01.09.2014 and 29.09.2014, the appellant CHA filed a detailed rebuttal/reply to the Disagreement Memo. The respondent Commissioner by Final Order dated 19.11.2014 held that all the articles of charges stood proved against the CHA and permanently revoked the CHA licence and also ordered for forfeiture of the entire amount of Security Deposit.
3.1 The learned Counsel further submitted that the Commissioner has not brought on record any fresh evidence to factually disprove/upset the findings of the Inquiry Officer, who had dropped the Articles of charges, being the initial fact finding authority.
3.2 The Commissioner also did not appreciate that the appellant/CHA has suffered enough punishment, as an alternative submission, as the CHA licence has remained inoperative/suspended for approximately 6 years, from the date of suspension i.e. 04.03.2009. Reliance is placed on the judgments of the Hon'ble Madras High Court reported in 2014 (309) ELT 433 in the case of A.M. Ahmed & Company and Ashiana Cargo Services, reported in 2014 (302) ELT 161. This Tribunal in the case of Adarsh Clearing agency has set aside the revocation of the CHA license following the earlier precedents on the same principle of law of enough and sufficient punishment. Reliance is also placed on the Order No. A/1750/14/CSTB/C-I dated 19.11.2014 of this Tribunal passed in the case of Jai Ambe Logistics, following the same principle and in the case of Manilal Patel Clearing Forwarding Pvt. Ltd. reported in 2013 (294) ELT 472, wherein this Tribunal followed its earlier decisions and withdrew the revocation order on the ground of sufficient punishment already undergone. In Manilal Patels case the enquiry officer had dropped the articles of charges and the notice was not issued under the CHALR within 90 days from receipt of the offence report. Recently the Commissioner in the case of Daroowala Brothers and Company has passed an adjudication order dated 18.07.2014, following the same principle of law.
3.3 The appellant also relied on the ruling of Hon'ble Madras High Court in the case of Commissioner of Customs, Chennai Vs. CESTAT, Chennai reported in 2014 (310) ELT 673 (Mad.), the Division Bench of the Hon'ble Madras High Court has inter alia held that there has to be strict compliance of time limit to complete the inquiry under the CHALR, which is to be completed within the stipulated period of 9 months from the date of Offence Report. The CHA inquiry has not been completed within the stipulated time limit and on this ground also the impugned order requires to be set aside. The appellant therefore prays that since the impugned order is passed after almost 6 years from the date of suspension order i.e. on 19.11.2014, whereas the suspension order was passed on 04.03.2009, the fundamental right to do business has been restricted for this entire period, and the case is not falling under the category of the rarest of the rare cases or serious moral turpitude, which would entail revocation of the CHA licence, this Tribunal may extend its mercy on the appellant CHA.
4. The learned AR appearing for the Revenue relies on the impugned order.
5. Having considered the rival contentions, we find that in charge-sheet dated 8.6.2009, no name of witnesses have been given or cited. Further, the statements of the persons which have been relied upon by the learned Commissioner, accepting the same as confessional in nature, but the said persons were neither examined nor cross-examined in the proceedings before the Commissioner and as such, have got no evidentiary value in terms of the provisions of Section 138B of the Customs Act. There is no evidence on record that the CHA license of the appellant have been allowed to be used by unauthorized person for monitory benefit. There is no evidence of any sale or transfer of the license and that there is no illegality in procuring work through other persons and/or referees. It is further a matter of record from the statement of Shri Javed Lalani that Shri Salim Lalani, who was working with Mahek Consultancy Services and also Vijay Manjrekar were issued BCHAA Pass (Bombay Custom House Agents Association), which is not a pass recognized by the Customs authorities for clearance work. None of the three persons namely, Javed Lalani, Salim Lalani and Vijay Manjrekar connected with Mahek Consultancy Services were examined during inquiry, nor any opportunity of their cross-examination, was given. There is no evidence on record that non-authorized persons or non-employee of the appellant CHA have handled the clearance works. The appellant through its partner had produced an authorization letter for carrying out the clearance work on behalf of the client. It is further evidence that there is no restriction on the CHA to accept the authorization of a client through the trusted intermediary. The observations of the learned Commissioner that in view of the fact that authorizations have been obtained by the appellant through the intermediary, the same are not valid. This finding is not tenable and the same is fit to be set aside. It is further pointed out that by way of footnote on the BCHAA Pass, it is mentioned not valid for Customs work.
5.1 We further find that so far Article of Charge under Regulation 13(d) is concerned, there is no finding or admission of any person that there have been lack of advice or any mis-advice from the CHA. No specific instance of violation of advice has come on record. Further, no discrepancies have been found by the Customs authorities in the documents filed by the appellant-CHA. So far the mis-declaration is concerned, as regards the goods under Bill of Entry, it has no way come on record that the same was with the knowledge or abetment of the CHA. Further, no case of violation of Regulation 13(d) of CHALR has been made out, which requires the CHA to transact business in the Customs Station either personally or through its employees duly approved by the Customs authorities.
5.2 So far Article of Charge under Regulation 13(n) is concerned which provides that the CHA shall conduct and/or discharge his duties with the utmost speed and efficiency and without avoidable delay, we find that the clearance work was undertaken only after receiving the authorization. There is no case of any slackness on part of the appellant-CHA save and except the authorization for clearing work on behalf of the importer was through the intermediary and did not make any attempt to personally meet the importer. Thus, we find that there is a venial breach of the provisions of Regulation 13(n) of the CHALR. None of the importers have been found to be take or non-existent.
5.3 So far the Article of Charge under Regulation 19(8) is concerned, the appellant CHA as per Regulation 19(8) of CHALR, 2004 is required to exercise such supervision as may be necessary to ensure the proper conduct of its employees in the transaction of the business. We find that the Inquiry Officer has not found the charge proved. We find that the learned Commissioner has not brought any additional material on record and has erred in disagreeing with the report of the Inquiry Officer. Thus, there is no case of violation of Regulation 19(8) of CHALR is made out. Thus, we find that save and except venial breach on part of CHA under Regulation 13(n) of the CHALR, no other Articles of Charges are proved against the appellant CHA. In this view of the matter, we set aside the order of revocation of CHA license and restrict the amount of forfeiture of security deposit to Rs.25,000/- (rupees twenty five thousand only).
6. Consequently, the license of the CHA is restored forthwith and the balance amount of security deposit forfeited by the impugned order shall be re-credited to the CHAs account. Thus, the appeal is allowed in part in the above terms.
6.1 We also take notice of the fact that the appellant is suffering for more than 6 years as his license was suspended on 4.3.2009 which was subsequently revoked by the impugned order. We also take notice of the fact that the disciplinary proceedings were initiated vide show-cause notice dated 8.6.2009, which are required to be completed within a period of nine months as per the instruction of the CBE&C and the proceedings have been concluded by the impugned order dated 21.11.2014, which is more than five and half years.
(Pronounced in Court on .)
(P.S. Pruthi) (Anil Choudhary)
Member (Technical) Member (Judicial)
Sinha
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Appeal No. C/85063/15