Custom, Excise & Service Tax Tribunal
M/S. Global Marine Agencies vs Cc (Prev.), Jaipur on 9 August, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM,
NEW DELHI-110066
COURT NO. II
Customs appeal No. 522 of 2011-Cus
[Arising out of Order-in-Original No. 03/CHA/2011 dated 26.7.2011 passed by the Commissioner of Customs (Prev.), Jaipur]
Reserved on: 28th June, 2012
Pronouncd on: _____________
M/s. Global Marine Agencies Appellant
Reptd. By Shri Prabhat Kumar, Advocate
Vs.
CC (Prev.), Jaipur Respondent
Represented by Shri Amresh Jain, SDR Coram: Honble Shri D.N. Panda, Judicial Member Honble Shri Mathew John, Technical Member FINAL ORDER NO. ________________ Per D.N. Panda:
Proceedings before learned Commissioner commenced on the basis of the order of prohibition passed by the Commissioner, Jamnagar on 31.5.2011 (Ref: page 63A of appeal folder).
2. The appellant was allowed to transact business at Pipavav, Customs station under the jurisdiction of Commissioner of Customs (Preventive), Jamnagar on the strength of parent CHA licence No. 01/CHAL/R/2000 issued by the Commissioner of Customs, Jaipur till the validity of the licence i.e. up to 3.4.2015. It was found by the Commissioner (Pre.), Jamnagar that appellant filed shipping bill No. 3716184 and 3716193 both dated 18.5.2011 at CFS, Pipavav for export of 42 M.T. of Muriate of Potash(PT) in the garb of organic chemicals Cobalt Sulphate valued at Rs. 1.66 crores under duty draw back scheme on behalf of exporter M/s. Suave Chemical (India), Ahmedabad (IEC No. 0810003368). When samples of the goods were drawn and tested at Customs laboratory, Kandla, that proved to be MOP (Muriate of Potash) covered by Srl. No. 132 of Schedule 2 to the Foreign Trade Policy. Such goods being restricted for export those were seized by Customs, Pipavav and investigation commenced.
3. Finding involvement of this appellant in the aforesaid export, it was opined by learned Commissioner, Jamnagar that appellant should be prohibited to transact as CHA at Pipavav Customs for violating Regulations 13(a), 13(d) and 13(o) of Customs House Agent Licensing Regulations, 2004 (hereinafter referred to as 2004 Regulations). Accordingly, that authority in exercise of power conferred on him under Regulation 21 of the said Regulations prohibited the appellant to transact business at Pipavav Customs station with immediate effect in terms of order dated 31.5.2011 and also directed the appellant surrender Customs cards in form F, G and H, if any issued.
4. On the basis of prohibitory order dated 31.5.2011 as aforesaid, learned Commissioner, Jaipur passed an order vide exparte No. 02/CHA/2011 on 17.6.2011 suspending CHA licence of the appellant with immediate effect and also ordered for surrender for G card and H card at his office immediately. While passing that order, learned authority allowed opportunity of hearing to the appellant on 11.7.2011 under Regulation 20(3) of 2004 Regulations so as to pass further order.
5. Granting opportunity of hearing, learned Commissioner passed the impugned interim order of suspension dated 26.7.2011 holding that the exparte order of suspension dated 17.6.2011 shall continue to operate till further orders. To reach to such conclusion, learned authority viewed that for the breach of law committed by the Appellant, no suspension of its CHA licence may cause further jeopardy to the State. Appellants plea of no blemish conduct in past was discarded by that Authority for the omission and commission reported by learned Commissioner, Jamnagar and gross violation of law committed by the Appellant.
6. Learned Commissioner, Jaipur examined gravity of the statement of Shri Sanjay N. Gandhi, proprietor of the appellant recorded on 2.6.2011 under Section 108 of Customs Act, 1962. That disclosed that appellant consented to work as CHA with M/s. Gulsi Logistics Pvt. Ltd. at Pipavav Port; and as per the mutual agreement, M/s. Tulsi Logistics Pvt. Ltd. had to pay Rs. 20,000/- per month to the appellant for using its CHA licence; few staff of M/s. Tulsi Logistics Pvt. Ltd. were also working on behalf of the appellant CHA under H Cards issued. As per understanding between the Appellant and Shri Haresh Shah, Managing Director of M/s. Tulsi Logistics Pvt. Ltd., the office premises as well as staff of the said company was used in relation to work pertaining to CHA activities and salary of the staff at Pipavav was being paid by M/s. Tulsi Logisictics. Learned Adjudicating Authority tested above statement in the light of the judgement of the Honble High Court of Delhi in the case of Jasjit Singh Marwa, reported in 2009 (239) EL T407 (Del.) and viewed that interim order of suspension should continue pending investigation against the appellant.
7. Learned Counsel Shri Prabhat Kumar, appearing on behalf of the appellant summarily submitted as under:-
(i) The time limit of 90 days prescribed by Regulation 22 of 2004 Regulation was not followed and Adjudicating Authority did not follow Boards Circular No. 8/4/2010;
(ii) Appellant had not committed any offence in last 6 years in any port for which breach at Jamnagar alleged shall not be a ground to continue with suspension order;
(iii) The statement recorded from the proprietor of the Appellant under Seciton 108 need not be heavily relied.
(iv) 13 months having been elapsed in the meantime, further suspension is not warranted since the appellant has already under gone suffering;
(v) Sub-letting of CHA licence is a financial arrangement and that is not denied for which the appellant finds support of decision reported in 2000 (122) ELT 581. So also reliance was placed on the decision of Honble High Court of Bombay in the case of A.M. Ganatra & Co. 2010 (254) ELT 454 (Bom.), approving Tribunals order reported in 2007 (219) ELT 316 (Tri.-Bom.). Further reliance was placed on the order of the Tribunal reported in 2002 (141) ELT 284 (Tri.-Del.) in the case of Felcon Air Cargo & Travel (P) Ltd., and decision of Tribunal in the case of N.D. Oza & Sons 1999 (106) ELT 412. Emphasis was placed on the order of the Tribunal in the case of Cargo Care 2012 (279) ELT 295 (Tri. Del.)
8. Per contra, submissions of the learned representative of Revenue was that granting a lee way to the appellant shall cause obstruction the process of investigation and the appellant shall cause further prejudice to the interest of Revenue. The appellant was subjected to Regulation 22(2) whereby interim suspension of licence was ordered during pendency of the inquiry for good reason. Misconduct of the appellant being patent from its act covered by Regulation 20(1), the administrative order of suspension passed should continue till conclusion of investigation and adjudication under Regulation 20 of 2004 Regulation as without being intervened by Tribunal. Plea of failure to follow the time limit under Regulation 22 has no basis when misconduct under Regulation 20 comes up and Revenue was gravely injured and Offence report is yet to reach to learned Commissioner, Jaipur. Interim suspension was ordered following due procedure of law granting opportunity of hearing when the appellant failed to come out with clean hands. Rather appellant has misplaced the circular without appreciating that circular is not a bar against law and fraud nullifies every solemn act. It was also submission of the Revenue that its interest being prejudiced by the appellant, no interference to administrative action should be made in this appeal following the ratio laid down in the judgement in the case of Jasjeet Singh Marwaha vs. UOI reported in 2009 (239) ELT 407, 2011 (268) ELT 448 (A.P.) and the judgement in writ petition No. 7122 disposed on 14.9.2011 by Honble High Court of Bombay in the case of M/s. Delta Logistics vs. UOI & Ors.
9. Heard both sides and perused the record.
10. In the course of hearing it was informed by Revenue that investigation against the appellant is in progress and the fact recorded by prohibitory order dated 31.5.2011 passed by the learned Commission, Jamnagar remained un-refuted while that was basis of interim suspension order dated 17.6.2011. Similarly, the impugned order dated 26.7.11 rested on that edifice of facts recorded in above two orders which remained uncontrovered in absence of any material to the contrary.
11. The association of the appellant with M/s. Tulsi Logistics (P) Ltd., Vadodara came out from the statement recorded under Section 108 of Customs Act, 1962 from the proprietor of the appellant concern. Appellant was paid consideration for the arrangement made with the user of its CHA licence. So also the statement recorded from the appellant brought out that Customs was persuaded to act on the basis of letter issued by appellant to get H Card in the name of the staff of M/s. Tulsi Logistics (P) Ltd. There was no rebuttal to the test report came out from Customs Laboratory and appellant failed to prove to be stranger to the export of consignment of restricted goods by M/s. Sauave Chemicals (India) valued at Rs. 1.66 crores covered by two shipping bills aforestated. Filing of the shipping bills by the appellant was undenied and its nexus, connection as well as association to the seized goods i.e. MOP (Muriate of Potash) surfaced. Prima facie it was established that there was an attempt to defraud the interest of the country by mis-declaration of the description of the goods which were restricted item under law and export being made under Drawback scheme Revenues interest was prejudiced. All these material facts dragged the appellant to the interim order of suspension as Revenue administration measure to arrest evasion.
12.1 The very purpose of granting licence under Regulation 9 of 2004 Regulations is to authorize a person to act as CHA on behalf of importers and exporters to occasion import and export of goods at any customs station in accordance with the provisions of Customs Act, 1962. In order to discharge such responsibility, the CHA is expected to have basic knowledge of Customs provisions. Regulation 8 of 2004 Regulations requires a person to appear examination conducted by Customs Department to test his capability in the matter of preparation of various documents, determination of value, procedures of assessment, payment of duty and to assess the extent to which he is conversant with the provisions of Customs law and certain other enactments etc. 12.2 Upon qualifying the prescribed examination one becomes eligible to get CHA licence subject to fulfilment of other provisions of Customs Act, 1962. Object of this Act is that CHA should ensure that he does not act as an Agent to carry out illegal activities for any person who avails his services in the matter of import and export and he should also not be a party to the violation of the provisions of the said Act misusing or permitting to misuse his position as a CHA and should not in any way associate himself in evasion of duty. Law reposes confidence on him. Therefore, breach of trust is not expected from him because any misuse of his position has far reaching consequences under law for which penal consequence of law is prescribed against his wrong doings.
12.3 Under Regulation 13(d) of 2004 Regulations, it is the responsibility of the CHA to comply with the provisions of the Customs Act, 1962. He is expected to advise his clients lawfully and in case of non-compliance to law of Customs, his duty is to bring such act to the notice of the Customs authorities. Regulation 13(e) requires the CHA to exercise due diligence to ascertain the correctness of the information. Regulation 13(l) requires that all the documents must show the correct names of the parties. Regulation 19(8) requires CHA to exercise all necessary supervision of the conduct of its employees and failure thereof makes the CHA responsible for the acts or omissions of his employees. His obligations as prescribed by Regulation 13 are as follows:
13. Obligations of Custom house Agent. - A Custom House Agent shall:
(a) Obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as Custom House Agent and produce such authorisation whenever required by an Deputy Commissioner of Customs or Assistant Commissioner of Customs;
(b) Transact business in the Customs Station either personally or through an employee duly approved by the Deputy Commissioner of Customs or Assistant Commissioner of Customs;
(c) Not represent a client before an officer of Customs in any matter to which he, as officer of the Department of Customs gave personal consideration, or as to the facts of which he gained knowledge, while in Government service;
(d) 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 Commissioner of Customs, orAssistant Commissioner of Customs;
(e) Exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;
(f) Not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Commissioner of Customs, from a client who is entitled to such information;
(g) Promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debt or obligations owing to the Government and promptly account to his client for funds received for him from the Government or received from him in excess of Governmental or other charges payable in respect of the clearance of cargo or baggage on behalf of the client;
(h) Not procure or attempt to procure directly or indirectly, information from the Government records or other Government sources of any kind to which access is not granted by proper officer;
(i) Not attempt to influence the conduct of any official of the Customs Station in any matter pending before such official or his subordinates by the use of threat, false accusation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing of value;
(j) Not refuse access to, conceal, remove or destroy, the whole or any part of any book, paper or other record, relating to his transactions as a Custom House Agent which is sought or may be sought by the Commissioner of Customs;
(k)Maintain records and accounts in such form and manner as may be directed from time to time by a Deputy Commissioner of Customs or an Assistant Commissioner of Customs and submit them for inspection to the said Deputy Commissioner of Customs or Assistant Commissioner of Customs or an officer authorised by him whenever required;
(l)Ensure that all documents such as bills of entry and shipping bills delivered in the Customs Station by him show the name of the importer or exporter as the case may be and the name of Custom House Agent, prominently at the top of such documents;
(m)In the event of the licence granted to him being lost, immediately report the fact to the Commissioner of Customs;
(n)Ensure that he discharges his duties as Custom House Agent with utmost speed and efficiency and without avoidable delay;
(o)Verify antecedent, correctness of Importer Exporter cod (IEC) number identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information;
(p)Not charge for his services as Custom House Agent in excess of the rates approved by the Commissioner from time to time under Regulation 25.[Emphasis supplied] 12.4 CHA licence is not transferable under Regulation 12. Regulation 20 prescribes disciplinary measures to prevent misconduct of CHA. Therefore, defeating of the object of Customs Act, 1962 by CHA is punishable. Action under Regulation 20 may result in revocation of CHA licence and forfeiture of security deposited by him or forfeiture of such security alone. The grounds on which such consequences arise are described in sub-clause (a), (b) & (c) of Regulation 20(1). Sub-regulation (2) of Regulation 20 provides for interim measure of suspension which the Commissioner of Customs may order ex-parte in view of specific provision to Regulation 22(1) within 15 days of receipt of report from investigating authority and such interim order may be confirmed or reversed within 15 days of date of hearing of CHA under Sub-regulation (3) of Regulation 20 granting him opportunity of being heard. For convenience of reading, Regulation 20 is reproduced as under:
20. Suspension or revocation of licence. - The Commissioner of Customs may subject to the provisions of Regulation 22, revoke the licence of a Custom House Agent and order for forfeiture of part or whole of security or only order forfeiture of part or whole of security, on any of the following grounds namely :-
(a) failure of the Custom House Agent to comply with any of the conditions of the bond executed by him under Regulation 10;
(b) failure of the Custom House Agent to comply with any of the provisions of these regulations, whether within the jurisdiction of the said Commissioner of Customs or anywhere else;
(c) Any misconduct on his part whether within the jurisdiction of the said Commissioner of Customs or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station.
(2)Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate case where immediate action is necessary, [within fifteen days from the date of receipt of a report from investigating authority, suspend the licence] of a Customs House Agent where an enquiry against such agent is pending or contemplated.
(3) Where a licence is suspended under sub-regulation (2), notwithstanding the procedure specified under regulation 22, the Commissioner of Customs may, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs House Agent whose licence is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs House Agent.[Emphasis supplied] 12.5 Regulation 22 has prescribed detailed procedure to ascertain whether there exists any of the grounds enumerated in Regulation 20(1) for ultimate revocation or suspension of CHA licence and time limit of 9 months from the date of receipt of offence report is prescribed to complete the process. Such time limit does not run from the date of interim suspension and should not be misconstrued. Such procedure reads as under:
REGULATION 22. Procedure for suspending or revoking licence under Regulation 20. (1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent within ninety days from the date of receipt of offence report stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit within thirty days, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the Customs House Agent desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.
Provided that the procedure prescribed in regulation 22 shall not apply in respect of the provisions contained in sub-regulation (2) of regulation 20.
(2)?The Commissioner of Customs may, on receipt of the written statement from the Customs House Agent, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent.
(3)?The Deputy Commissioner of Customs or Assistant Commissioner of Customs shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs House Agent, for the purpose of ascertaining the correct position.
(4)?The Customs House Agent shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing.
(5)?At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording [his findings and submit his report within ninety days from the date of issue of a notice under sub-regulation (1).].
(6)?The Commissioner of Customs shall furnish to the Customs House Agent a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and shall require the Customs House Agent to submit, within the specified period not being less than [thirty days], any representation that he may wish to make against the findings of the Deputy Commissioner of Customs or Assistant Commissioner of Customs.
(7)?The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs House Agent, pass such orders [as he deems fit within ninety days from the date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5).].
(8)?Any Customs House Agent aggrieved by any decision or order passed under regulation 20 or sub-regulation (7) of regulation 22, may prefer an appeal under section 129A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under sub-section (1) of section 129 of the Act.[Emphais supplied] 12.6 If interim order of suspension is not revoked under Regulation 20(3), process of passing final order for revocation or suspension of CHA licence under Regulation 20(1) is initiated in terms of Regulation 22(1) within 90 days from the date of receipt of offence report. Opportunity is granted to the CHA to defend against proposed action filing reply before the designated Dy. Commissioner of Customs or Asst. Commissioner of Customs within 30 days of the issuance of notice. Such designated authority, upon inquiry, is required to submit report to the Commissioner of Customs within 90 days of issuance of notice under Regulation 22(1). In between, 6 months period expires. Within 90 days of receipt of report of enquiry from the designated Dy. Commissioner of Customs or Asst. Commissioner of Customs, Commissioner of Customs passes such orders as he deems fit. Entire procedure prescribed under Regulation 22 covers 9 months time from the date of receipt of offence report.
12.7 It may be noted that every trial is a voyage of discovery in which truth is the quest. So also, a quasi-judicial enquiry is directed in this manner. Therefore wrongdoers are brought to enquiry through the process of investigation. Immediate suspension of the licence by an ex-parte order within 15 days of receipt of the investigation report from Customs station under Regulation 20(2) is to keep the wrong doer away from the customs station to conduct a fair and uninterrupted investigation. Keeping such aspect in view, limitation for disposal of final proceeding under Regulation 20(1) runs from the date of receipt of offence report but not from the date of interim order of suspension. Cutting short the investigation in the guise of misconceived notion of limitation would be a mockery.
13. In the present case the offence report is yet to reach to the Commissioner of Customs under Regulation 22(1) and crucial date for counting limitation under Regulation 22 being receipt of offence report by the Commissioner of Customs under Regulation 22(1), that stage has not yet been arrived. Interim suspension order passed is purely an administrative disciplinary measure to prevent CHA to enter into Customs area. Therefore, any intervention to such order of suspension during pendency of investigation shall be detrimental to the process of investigation and shall defeat the object of fair, impartial and independent investigation.
14. The Appellant although claims to have 6 (six) years of experience as CHA, prima facie, it appears to have paved the way for its user of licence to indulge in serious malpractices which would have prejudiced countrys interest but for timely detection of the fraud. Therefore, there was every justification on the part of learned Commissioner Customs to treat the action of the applicant as detrimental to the interest of the nation following the ratio laid down in the case of Sri Kamakshi Agency - 2001 (129) E.L.T. 29 (Mad).
15.1 At this juncture learned Counsel for appellant relied on the decision in the case of Krishna Kumar Sharma vs. CCE, New Delhi 2000 (122) ELT 581 to submit that sub-letting of CHA licence is not impermissible. The issue before the Tribunal was whether the person who arranged business for CHA had filed papers for customs clearance or such filing was done by CHA. In the present case the matter is in investigation stage to ascertain facts in detail for adjudication. Therefore, reliance on the above order is premature and is unprofitable for Appellant.
15.2 Appellant further relied on the judgement of Honble High Court of Bombay in the case of CCE, Mumbai vs. K.M. Gantra & Co. 2010 (254) ELT 454 (Bom.) to submit that sub-letting of CHA licence is permissible. In that case, CHA licence of the respondent was suspended for 3 years for sub-letting the same. Tribunal allowed the appeal of the respondent restoring CHA licence. Honble High Court dismissed the appeal of Revenue finding nothing un-reasonability in Tribunals decision holding that licence in that case was suspended for 3 years and after that the same was revoked permanently and, there being harsh punishment, the revocation was reduced to 3 months from the date of suspension. In the present appeal the appellant is only against interim suspension without a final suspension order of the revocation which is yet to be passed. Therefore, its case does not fall within the four of the cited decision.
15.3 The judgement in the case of Felcon Air Cargo 2002 (141) ELT 284 (Tri.-Del.) was also cited by the appellant to submit that punishment should commensurate with offence of sub-letting of licence and sub-letting of licence is not grave offence to suspend CHA licence. In the cited order of the Tribunal punishment of revocation was found to be grave in nature and it was held that revocation was unwarranted since CHA had already undergone suffering. When investigation is pending and final order of suspension or revocation is yet to be passed in the present case, the appellant shall not gain from the cited decision.
15.4 Further reliance was placed by Appellant on the decision in the case of N.V. Ohja & Sons vs. C.C., Mumbai, reported in 1999 (106) ELT 412 (Tri.) to submit that delay in enquiry should not result in suspension of licence. In the present case offence report is yet to be reached. The offence alleged in the present case appears to be gravious in nature and investigation should not be interfered by Tribunal.
15.5 Next reliance of the appellant was in the case of Cargo Care vs. CC, New Delhi 2012 (279) ELT 295 (Tri.-Del.) to submit that when the final notice is not issued, CHA licence is to be restored. In that case Tribunal noticed that even after 28 months of suspension there was no disclosure of evidence for long time to the CHA and abnormal delay of 28 months had occurred. Licence was, therefore, restored as an interim measure without obstructing investigation. But in present case while investigation is in progress and not even one year has expired from the date of passing interim suspension order, appellant cannot get benefit of that order in view of gravity of offence alleged in the present case.
15.6 Learned Counsel for appellant argued that CBEC Circular No. 9/2010 dated 8.4.2010 stipulates the time limit to dispose CHA licence cancellation matter. But that was not followed. In the present case the limitation is yet to run from the date of offence report which is yet to be received by learned Commissioner of Customs and the argument that time limit of 9 months runs from date of interim suspension order is inconceivable when limitation has been unambiguously prescribed to run from the date of receipt of offence report but not from the date of interim suspension order. In the present case from the date of suspension not even one year has expired and investigation is in progress. Therefore, facts and circumstances of present case are not akin to decision cited by the learned Counsel.
16.1 Countering the arguments of appellant, Revenue relied on the judgement of Honble High Court of Delhi in the case of Jasjeet Singh Marwah, reported in 2009 (239) ELT 407 (Del.) to submit that only after completion of adjudication Regulation 20 read with Regulation 22 of 2004 Regulations made under the Customs Act, 1962 and upon finding the CHA whether liable or not under that statute, proceedings for suspension or revocation of licence of the CHA comes to an end. Since in present case, interim suspension is made to prevent the CHA to enter into Customs station for conducting fair investigation, the appellant should not gain sympathy for restoration of licence on the misconceived plea of time bar when the offence committed is gravious and investigation is in progress.
16.2 In the cited case by Revenue, grievance of the appellant CHA was that licence was suspended for mis-declaration and immediate suspension was ordered without hearing the appellant. Tribunal directed for a fast decision on hearing the matter. The adjudicating authority granting hearing confirmed the suspension. Added to that, show cause notice was issued for revocation of licence. Against that show cause notice the appellant went in writ petition to Honble High Court of Delhi. That petition was decided by a single Judge restraining Customs authorities from taking further action against the show cause notice proposing revocation of CHA licence till disposal of appeal of the appellant by Commissioner (Appeals). Revenue being aggrieved by the decision of Single Judge appealed before Division Bench of Honble High Court. While disposing Revenues appeal, the Honble Bench noticed that Commissioner (Appeals) in the meantime had disposed the appeal of CHA granting partial relief to the CHA observing it was open to CHA to file reply to show cause notice. But CHA having come to the Tribunal against the order of Commissioner (Appeals), the Division Bench observed that Customs authorities while deciding on the show cause notice could not only take into consideration the reply itself but also effect of the order passed by the Commissioner (Appeals). In the meantime, the Tribunal by an interim order had disposed connected stay application of the party for whom CHA acted and also Tribunal dismissed the appeal of CHA. Against such order of dismissal the CHA went in appeal before Honble High Court. It has been held by Honble Court in that appeal that:
i) CHA licence can be suspended where there is a violation of provisions of the Customs Act, 1962 or there is imposition of penalty and, the power of suspension of licence is not confined to only those situation where there is a violation of CHA LR, 2004 Regulations.
ii) CHA licence can be suspended based on confession made under section 108 of the Act provided it is voluntary and the statement is truthful and is not result of such inducement, threat or promise as mentioned in Section 24 of the Indian Evidence Act, 1872.
iii) CHA acting on behalf of the importer has not only his obligation to ensure that entries made in the Bill of Entry are correct but also a true and correct declaration of value and description of goods is made, and in the event of any infraction such as mis-declaration he can be penalized under Regulation 20 of CHA LR, 2004, if it results in mis-conduct which is of the nature rendering the CHA unfit to transact the business of CHA, at the Customs station.
17. We have carefully looked into the ratio laid down by Honble High Court of Delhi and examined the case of the appellant who is under interim suspension order. Prima facie when the appellant has made infraction of law, it has to undergo the process of investigation till the matter reaches to the scope of Regulation 22 of 2004 Regulations.
18. It should be? borne in mind that, matters of discipline lie in the realm of the Commissioner of Customs who is well placed to understand the role of the CHA in customs area. That Authority is responsible for the happenings in that area and for the discipline to be maintained thereat. If he takes a decision necessary in accordance with law as an interim measure, Tribunal would ordinarily not interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or their employees. The decision is best left to the disciplinary authority save in exceptional cases where the punishment imposed is shockingly disproportionate or is mala fide. [Ref:Worldwide Cargo Movers - 2010 (253) E.L.T. 190 (Bom.)]. Therefore, in an appeal, preferred against an interim order of suspension under Regulation 20(3) of 2004 Regulation, the Tribunal should not be swayed by considerations of misplaced sympathy. No indulgence can be shown to persons indulging in acts of corruption. The interim order of suspension of the CHA licence by the Commissioner of Customs, should be viewed in the light of the grave and serious allegation of misconduct of the CHA Appellant. Any sympathy on misplaced grounds shall result in excess of exercise of Appellate jurisdiction by the Tribunal [Ref.: Commr. Of Customs & Central Excise, Hydrabad-II vs. H.B. Cargo Services - 2011 (268) ELT 448 (A.P)].
19. The appellant appears to have allowed its agent exporter to use its licence irresponsibly and thereby actively involved in the fraudulent act in connivance with the exporter. As a name lender to the exporter it caused prejudice to Revenue, making breach of trust and failed to discharge its responsibility under Regulation 13. Affecting the interest of the country was due to reckless and irresponsible behaviour of the Appellant in the course of acting as a CHA licensee. Accordingly interim order of suspension passed by the leaned Commissioner does not appear to be improper since principles of vicarious liability is applicable to the present case in hand.
20. While interim suspension continues due to gravity of the alleged acts of misconduct and the appellant CHA has undergone suffering, it must not be lost sight of that, though it is the right of a citizen to carry on his business or profession, it is subject to reasonable restrictions and conditions which, in the present case, are stipulated under the 2004 Regulations. [ Ref:Worldwide Cargo Movers - 2010 (253) E.L.T. 190 (Bom.)]. When the appellant facilitated misdeclaration of goods and restricted goods were to be exported in the garb of different goods that was a corruption. In cases involving corruption there should not be any lighter punishment. [Ref: State of T.N. v. K. Guruswamy - (1996) 7 SCC 114]. Any sympathy shown in such cases shall be opposed to public interest and Public Policy. The consideration received for the act of misconduct may be small or large. It is the act of corruption that is relevant, and not the quantum involved in such acts. [Ref: Ruston & Hornsby (I) Ltd. v. T.B. Kadam - (1976) 3 SCC 71; U.P. SRTC v. Basudeo Chaudhary - (1997) 11 SCC 370; Janatha Bazar (South Kanara Central Coop. Wholesale Stores Ltd.) v. Sahakari Noukarara Sangha - (2000) 7 SCC 517; Karnataka SRTC v. B.S. Hullikatti - (2001) 2 SCC 574; Rajasthan SRTC v. Ghanshyam Sharma - (2002) 10 SCC 330; Municipal Committee, Bahadurgarh v. Krishnan Behari - (1996) 2 SCC 714; U.P. SRTC v. Suresh Chand Sharma - (2010) 6 SCC 555; J.A. Naiksatam v. Prothonotary & Senior Master, High Court of Bombay - (2004) 8 SCC 653; Union of India v. Gyan Chand Chattar (2009) 12 SCC 78; NEKRTC v. H. Amaresh - (2006) 6 SCC 187; U.P. SRTC v. Vinod Kumar - (2008) 1 SCC 115].
21. It appears that there existed good and sufficient reasons for passing interim order of suspension by learned Commissioner, Customs. However, that does not mean that an order of suspension of a licence which has a direct bearing on the livelihood of the CHA shall be allowed to continue indefinitely. A statutory authority while exercising powers conferred under law must not be permitted to achieve a goal indirectly which he cannot achieve directly. Furthermore, power is to be exercised on sound legal principles and reasonably and no power be exercised under whim or caprice. A reasonable exercise of power by a statutory authority should satisfy the test of reasonability which would embrace within its fold taking of action by initiation of a proceeding within a reasonable time.
22. Keeping in view the law and the facts in issue, we direct that:
(1). Appropriate SCN be issued levelling charges if any, against the CHA within a period of twelve weeks from the date of receipt of this order, failing which the interim order of suspension shall stand revoked.
(2). Even if the interim order of suspension stands revoked under Para 22 (1) above, it goes without saying that it would be open to learned Commissioner of Customs to initiate appropriate proceeding and take appropriate steps against the Appellant in accordance with law.
In the result, stay petition is dismissed and appeal is disposed in above terms.
(Pronounced on ____________________ ) (D.N. PANDA) JUDICIAL MEMBER (MATHEW JOHN) TECHNICAL MEMBER RK 2