Custom, Excise & Service Tax Tribunal
M/S S. C. Ghosh & Company (India) Pvt. Ltd vs Commissioner Of Customs (Admn. & ... on 3 July, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Cus. Appeal No.247/10
Arising out of O/O No.Kol./Cus/AirPort/Admn/20/2010 dated 12.07.2010 passed by Commr. of Customs (Admn. & Airport), Kolkata.
For approval and signature:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
DR. I. P. LAL, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see
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 His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s S. C. Ghosh & Company (India) Pvt. Ltd.
APPELLANT(S)
VERSUS
Commissioner of Customs (Admn. & Airport), Kolkata
RESPONDENT (S)
APPEARANCE Shri N. K. Chowdhury, Advocate for the Appellant (s) Shri S. Chakraborty, Asstt. Commr. (A.R.) for the Department CORAM:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER DR. I. P. LAL, HONBLE TECHNICAL MEMBER DATE OF HEARING : 03.07.2014 DATE OF PRONOUNCEMENT : 25.09.2014 ORDER NO.FO/A/75547/2014 Per Dr. I. P. Lal :
Heard both sides and perused the records.
2. This appeal is filed against the order of the Commissioner of Customs (Admn. & Airport), Kolkata, revoking the CHA Licence of the Applicant, namely, M/s S. C. Ghosh & Company (India) Pvt. Ltd. and forfeiture of the security deposit of the said Applicant.
3. Briefly stated the facts of the case are that on the basis of an intelligence received by the officers of Dock Intelligence Unit (Preventive) to the effect that a firm by the name of M/s Brij Spinners of Ludhiana, was involved in fraudulent exports under claim of export incentives, three export containers bearing nos.FSCU 3978092 (20), VMLU 3200981 (20) and VMLU 3201864 (20) were intercepted. It was found that in one case, ARE-I copy bearing Sl.No.15 dated 17.02.2004, was tampered. All the three containers declared to contain acrylic blankets were opened and examined on 09.03.2004, in presence of independent witnesses when gross mis-declarations in respect of description, quantity as well as value, were found. In as much as, in respect of Container No.FSCU 3978092 as against the declared quantity of 260 bales containing 7800 pcs, the goods were actually found to be 120 bales containing 3920 pcs. Similarly, in respect of other two Containers, as against quantity of 260 bales containing 7800 pcs declared in the shipping bill, the goods were found to be 116 bales each containing 3860 pcs. While the goods were declared as Dcrylic Mink Blankets, actually found to be Shoddy Blankets of relatively low value. The Shipping Bills were under the DEPB Scheme with a total credit entitlement of Rs.19.75 lakhs revenue, to this extent, appeared to have foregone and illegally availed by the parties, but for the said interception. On query, it revealed that the shipping bill in respect of the above export consignments, were filed by M/s S. C. Ghosh & Company (India) Pvt. Ltd., i.e. the Appellant. During the course of investigation, the Officers recorded the statement of various persons. Shri Jaladhar Bose, Jetty Sircar, the employee of the Appellant, CHA firm, in his statement admitted to have tampered the ARE-1, hearing Sl.No.15 dated 17.02.2004. Shri Arup Kumar Mukherjee, one of the persons, dealing with the processing the documents, in his statement dated 09.03.2004, admitted that he had worked earlier as a Custom House Agent (CHA) for two years, but after the expiry of the licence in 2000-01, he lost his job and thereafter, with the help of a broker, he has been doing the clearance job using the stamp of M/s N. N. Bose & Nephew and M/s S. C. Ghosh & Company (India) Pvt. Ltd. He stated that he was associated with the firm, M/s Shiva Trading Company and that the said firm was engaged in processing of Customs clearance of import and export cargo by using the stamp of CHA firm, M/s S. C. Ghosh & Company (India) Pvt. Ltd.. He stated that in this case, he approached by one Shri Supriya Kumar Panja, who had shown him one export invoice and that Shri Mukherjee had agreed to do the work on remuneration of Rs.7000/- per container. He stated that Shri Panja had handed over to him the necessary invoices and packing list in respect of the impugned consignments on the basis of which, he had prepared the shipping bill Nos.5144336 and 5144337 both dated 28.02.2004 and 5144564 dated 01.03.2004, which were filed to the Customs House, Kolkata. Shri Panja in his statement, stated that one Shri Vinod Garg, Proprietor of the Firm, M/s Brij Spinners, met him in a Hotel during last week of February, 2004 and from whom, he got this export clearance job. During search in the office of Shri Panja, several incriminating documents etc. were recovered. Searches were also conducted in the office of the Appellant, M/s S. C. Ghosh & Company (India) Pvt. Ltd. and certain documents and Registers were seized. Shri Sanjib Das, Director of the CHA Firm, stated, inter-alia, that he has started business with M/s Brij Spinners, who was his new client through his friend, Shri Subhas Chakraborty of M/s Shiva Trading Company. He further stated that Shri Chakraborty had taken his signature on three blank declaration forms and two dock challans. He stated that he did not know M/s Brij Spinners and he had also not enquired about his new client and had no letter of authority from him. As the investigation conducted in this case, revealed a gross mis-conduct on the part of the CHA, which had facilitated the attempted fraudulent export of acrylic blankets to Korea by resorting to mis-declaration of value and quantity by M/s Brij Spinners, Ludhiana, licence of CHA was suspended by the Department on31.03.2004. A show-cause notice dated 06.09.2004 was issued to the exporter firm and the two partners of the CHA, were made a notice for alleged aiding and abating an attempted illegal export of goods in question to Korea. Another show-cause notice dated 23.11.2004 were issued to the Appellant firm i.e CHA under Regulation 22 of the Customs House Agents Licensing Regulations, 2004 (CHALR) for revocation of their licence and forfeiture of the security deposit under the provisions of Regulation 20 (1) of the CHALR, 2004, for gross mis-conduct on their part and their failure to comply with authorization/obligation, put on the CHA under Regulation 13 (a), 13 (b), 13 (d) & 19 (8) of the CHALR, 2004. The CHA was directed to submit its explanation before the enquiry officers. The CHA submitted a reply on 11.01.2005 and appeared for personal hearing before the enquiry officers on 02.07.2005. After going through the materials on record and submissions made by CHA firm, the enquiry officers found that the charges made in Regulation 13 (a) & 19 (8) of the CHALR, were proved. Thereafter, the matter was taken for adjudication and during adjudication, the ld. Commissioner found that the CHA had violated the provisions of Regulation 13 (a) and that of Regulation 19 (8) of the CHALR, 2004, therefore, revoked the licence and forfeited the security deposit of the CHA.
4.1 The ld. Advocate appearing for the Appellant, had submitted that the Appellants were an authorized Shipping and Clearing Agent since 1914 having a licence No.G-1. He submitted that during the ordinary course of business, the Appellants had undertaken job of clearing of three export consignments of M/s Brij Spinners, Ludhiana. He submitted that the invoices and packing lists of the impugned consignments were received by the Appellants from the respective exporter, accordingly, shipping bills were prepared and filed to the Customs.
4.2 He submitted that prior to 08.04.2010, there was no standard format for showing authorization inasmuch as Know Your Customer (KYC) was introduced w.e.f. 01.04.2010. It is submitted that as the exporter had signed the invoices and the packing lists, the same amounts to authorization as held in the following cases :
(i) P.P.Dutta Vs. Commr. of Customs, New Delhi : 2001 (136) ELT 1042 (Tri.-Delhi) ;
(ii) C.C. (General) Vs. S. S. Clearing & Forwarding Agency Pvt. Ltd. : 2011 (263) ELT 353 (Bom.) ;
(iii) Landing & Shipping Agency Vs. C.C. (Admn.), Kol. : 2003 (158) ELT 78 (Tri. Kol.) ;
(iv) Vipil Pranlal Doshi Vs. C.C. (General), Mumbai : 2012 (279) ELT 427 (Tri.-Mumbai).
4.3 So far as the failure to supervise the work of CHA employees, the ld. Advocate submitted that the Dock Sircar, Shri Jaladhar Bose, had admitted that he had committed wrong by changing the number of the container without the knowledge of the CHA and his service was terminated. In view of this fact, the Appellant i.e CHA, cannot be held responsible for any mis-conduct by its employee. In support, he relied upon on the following case laws in this regard :
(i) Arebee Star Maritime Agencies Vs. Commr. of Central Excise, Rajkot : 2004 (173) ELT 185 (Tri.-Mumbai) ;
(ii) A. S. Gopinath Vs. Commr. of Customs, Cochin : 2007 (212) ELT 112 (Tri.-Bang.) ;
(iii) Neptune Clearing Agency Vs. Commr. of Customs (Gen.), Mumbai : 2007 (212) ELT 97 (Tri.-Mumbai) ;
(iv) Bharat Overseas Communications Vs. Commr. of Customs (Gen.), Mumbai : 2007 (209) ELT 142 (Tri.-Mumbai) ;
(v) Shree Ganesh Shipping Agency Vs. Commr. of Customs, Bangalore : 2011 (271) ELT 236 (Tri.-Bang.).
4.4 The ld. Advocate submitted that on 31.03.2004, the licence of CHA was suspended by the ld.Commissioner. The said order was not passed complying with the principle of natural justice nor any post decisional hearing was granted and hence, the order is bad in law and proceedings initiated on the basis of this suspension order is also bad in law. He submits that suspension for indefinite period was held to be non-sustainable as held in the following decisions :
(a) Ocean Shipping & Clearing Agency : 2010 (251) ELT 517
(b) Subrata Guha Sarkar : 2013 (293) ELT 488
(c) Mathre and Sons Vs. CC (G), Mumbai : 2007 (218) ELT 417 (Tri.-Mumbay).
4.5 The ld. Advocate submitted that in case of revocation of the licence, proportionality is required to be looked into since such proportionality is of great significance as action is under a fiscal statute and may ultimately lead to a civil death. He submitted that the punishment, therefore, should be commensurate with offence as held in the following judgments :
(i) Falcon Air Cargo & Travel (P) Ltd. Vs. Union of India : 2002 (140) ELT 08 (Delhi) ;
(ii) Falcon Air Cargo & Travel (P) Ltd. Vs. CC, New Delhi : 2002 (141) ELT 284 (Tri.-Del.) ;
(iii) CC (General), Mumbai : Rinku Shipping Agency : 2010 (254) ELT 445 (Bom.) ;
(iv) Vipil Pranlal Doshi Vs. C.C. (General), Mumbai : 2012 (279) ELT 427 (Tri.-Mumbai) ;
(v) Shri Venkatesh Shipping Service Pvt. Ltd. Vs. Union of India : 2013 (287) ELT 266 (Bom.) ;
(vi) Samrat Shipping Services Vs. CC (General), Mumbai : 2007 (213) ELT 103 (Tri.-Mumbai) ;
(vii) T. V. Shanmugam Vs. CC, Chennai : 2006 (199) ELT 700 (Tri.-Chennai) ;
(viii) Smita International Vs. CC (General), Mumbai : 2004 (167) ELT 219 (Tri.-Mumbai);
(xi) Ashiana Cargo Services : 2014 (302) ELT 161 (Del.) 4.6 It is submitted that in the above judgements, the doctrine of proportionality was considered at length and the revocation of licence was set aside in cases, where CHA had been unable to work with his license for the considerable period of time. He submitted that in the present case, the CHA has been already out of business for six years from 31.03.2004 to 12.07.2010 and now in 2014, it has become 10 years and he has been sufficiently punished. Considering the ratio of the above decisions and the decisions of the Honble High Court of Delhi in case of M/s Ashiana Cargo Services (cited supra), it is submitted that the revocation of CHA licence should be set aside.
5.1 The ld. A. R. for the Revenue reiterated the findings of the adjudicating Commissioner.
5.2 He submitted that Shri Jaladhar Bose, Shri Jetty Sarkar of the CHA firm vide his voluntary statement dated 09.03.2004, admitted that he has tampered the impugned ARE I. He submitted that during investigation, the statement of one Shri Arup Kumar Mukherjee, was also recorded , who was also handling the documents in the name of the Customs House Agent, Shri Mukherjee vide his voluntary statement dated 09.03.2004, submitted that he had worked earlier as a Customs House Agent for two years, but after the expiry of his licence in 2000-2001, he lost his job, that after, with the help of a broker, he had been doing the clearance job using the stamp of M/s N. N. Bose and Nephew and presently, he was using the stamp of M/s S. C. Ghosh & Company (India) Pvt. Ltd.. Shri Mukherjee stated that he had agreed to do the work on the condition that he would be paid Rs.7,000/- per container. The ld.A.R. submitted that even though the Appellant holding a CHA licence, are engaged in processing of Import and Export clearance documents for a long time, they are well-conversant with the procedure In spite of this, he did not obtain any authorization from the exporter before filing the shipping bills. He also failed to supervise his employee and therefore, violated the provisions of Regulation 13 (a) and 19 (8) of the CHALR, 2004. The ld. A. R. further submitted that Shri Sanjib Das, the Managing Director of the CHA firm, in his stated recorded under Section 108 of the Customs Act, 1962, admitted that the Exporter, M/s Brij Spinners, was a new client of the CHA. Till date, he has not produced any authorization. He also admitted to have signed the blank declaration and dock challans in respect of the impugned consignments and handed over the same to an un-authorized persons, namely, Shri Subhas Chakraborty for processing of export documents. He, therefore, submitted that the ld. Commissioner has rightly revoked their licence and forfeited the security deposit.
5.3 The ld. A.R. submitted that as the CHA is required to have an authorization from his client, but they failed to do so and therefore, they have followed the Regulation 13 (a) of CHALR, 2004. He submitted that the ld. Advocate has pleaded that as the Appellant CHA has filed the export documents on the basis of invoice and packing lists received from the exporter, the same can be considered as substantive compliance of Regulation 13 (a) as held in case of P. P. Dutta (supra) and other case laws. It is the submission that the facts of the present case are distinguishable in asmuch as the shipping bills was never signed by the exporter and that it is the categorical admission on the part of the Managing Director of CHA that he did not know the exporter. He relied upon a judgement in the case of Baraskar Brothers Vs. Commr. of Customs (General), Mumbai : 2009 (244) ELT 562 (Tri.-Mum.), where the Tribunal has held at Para 6.4 that the physical verification of the exporter/importer by the CHA cannot be dispensed with by CHA when he acts for or on behalf of importer or exporter for all Customs matters.
5.4 He submitted that the facts of this case are akin to the case of in the case of Shri Kamakshi Agency Vs. Commissioner of Customs, Madras reported in 2001 (129) ELT 29 (Mad.), wherein at Para 9, the Honble Madras High Court has held as follows :
9. ..As far as the allegations leveled against the Applicant are concerned, it has been found established that the proprietor of the Applicant Thiru Natarajan had signed on certain specific documents such as Bs/E and S/Bs without knowing the importers/exporters and the nature of goods imported/exported in spite of being in the clearing line over thirty (30) yearsThe respondents/therefore slightly revoked the Customs House Agent Licence of the Applicant It is submitted that the Honble Madras High Court had therefore held that the Department rightly revoked the Customs House Agency Licence of the CHA firm. This judgement has subse