Custom, Excise & Service Tax Tribunal
M/S C.P.Mota & Co vs Commissioner Of Customs (General) on 29 March, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/784/10 Mum
Arising out of Order-in-Original No. 64/2010/CAC/CC(G)/SLM dated 26.07.2010 passed by the Commissioner of Customs (General) , Mumbai.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Shri. 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?
M/s C.P.Mota & Co.
:
Appellant
Versus
Commissioner of Customs (General)
Mumbai
Respondent
Appearance Shri Rajendra Kumar, Advocate for appellant Shri A.K. Prabhakar, Supdt. (A.R.) for respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri. P.R. Chandrasekharan, Member (Technical) Date of Hearing : 29.03.2012 Date of Decision : ..
ORDER NO.
Per : P.R. Chandrasekharan The appeal is directed against order-in-original 64/2010/CAC/CC(G)/SLM dated 26.07.2010 passed by the Commissioner of Customs (General) , Mumbai. The issue relates to revocation of licence of the appellant, M/s. C.P.Mota & Co.
2. The facts arising for consideration in this case are as follows.
2.1 The Directorate of Revenue Intelligence, Mumbai investigated a case relating to undervaluation and mis-declaration of a consignment of shoes illegally imported by M/s. Dilip Impex. It was cleared through JNPT. M/s. C.P. Mota & Co, CHA No. 11/682 was handling the customs clearance of the said consignment of shoes and it was found that they had aided and abetted the act of smuggling of the goods. Accordingly, an Inquiry was conducted against the CHA under the provisions of CHALR, 2004 and following charges were made:-
2.2 Under Regulation 12 of the CHALR, 2004 CHA licence cannot be sold or otherwise transferred. In the case under consideration, M/s. C.P.Mota & Co. allowed one Shri Dyaneshwar Ganpat Bhoir to use the licence for a monetary consideration which is in violation of Regulation 12 of the CHALR, 2004. It was further imputed the CHA failed to obtain authorization from the importer and without obtaining valid authorization they violated the Regulation 13(a) of the CHALR, 2004. It was further imputed that the CHA shall transact business either personally or through an employee duly approved by the Customs. In the instant case, the CHA allowed Shri Dyaneshwar Ganpat Bhoir to use the licence and to get a customs pass in his name by declaring him as an employee even though Shri Dyaneshwar Ganpat Bhoir was not an employee and was working independently on commission basis, thereby violating Regulation 13(b) of CHALR, 2004. It was further alleged that the CHA did not follow the Regulation 13(d) in as much as they failed to advise their clients properly to comply with the provisions of Customs Act, 1962 and the last Charge imputed against the CHA was that the CHA did not verify the genuineness of the importing firm and did not obtain authorization from them and knowingly allowed sub-agent Shri Dyaneshwar Ganpat Bhoir and his other associates Shri Thakur Prasad Shukla and Shri Sunil Umesh Kapoor to use his CHA licence for clearance of the imported goods for monetary considerations. These sub-agents were not his employees but were in turn paying him a commission to use his licence. This act of lending/allowing use of the licence to others for unscrupulous imports on the part of the CHA appears to be in violation of the provisions of Regulation 13(n) of the CHALR, 2004. An enquiry was conducted and the Inquiry Officer held all the above charges to be proved and thereafter the matter reached the Commissioner, who accepting the findings of the Enquiry Officer, revoked the licence under Regulation 22(7) of the CHALR, 2004. Hence the appellant is before us.
3. The learned Counsel for the appellant submits that in this case the Inquiry Officer did not follow the proper procedure for conducting the enquiry. They did not produce any prosecution witnesses and did not allow cross examination of the witnesses for establishing the charges against them. Therefore the CHA was deprived of an opportunity to cross examine the witnesses based on which the charges have to be proved.
3.1 On the other hand the CHA has produced defence witness from whose statement it could be established that Shri Dyaneshwar Ganpat Bhoir was an employee of the CHA firm and the charge of sub-letting of licence does not sustain. In as much as Shri Dyaneshwar Ganpat Bhoir had obtained documents from the importer, the other charges such as not obtaining valid authorization etc. also do not sustain. In support of the above contention the learned Advocate has submitted the copies of the salary payments made to Shri Dyaneshwar Ganpat Bhoir as an employee and also an appointment letter issued to the Shri Dyaneshwar Ganpat Bhoir at the time of appointment. He also submits that the importer approached the Settlement Commission, Mumbai for settlement of the issue on payment of duty and interest and the Settlement Commissioner did not impose any penalty on Shri Dyaneshwar Ganpat Bhoir as part of the settlement proceedings. In as much as Shri Dyaneshwar Ganpat Bhoir is the main person who undertook the transaction and since he was imposed no penalty by the Settlement Commission, the employer of Shri Dyaneshwar Ganpat Bhoir should not be penalized.
4. The learned AR appearing for the Revenue submits that in this case, there are evidences available by way of statements recorded by the investigating agency from Shri Chandrakant Popatlal Mota, Proprietor of the CHA firm, Shri Dyaneshwar Ganpat Bhoir the person who undertook the impugned transaction by sub-letting the licence, and the importer, from which it is clearly established that Shri Chandrakant Popatlal Mota sub-let his licence to Shri Dyaneshwar Ganpat Bhoir and Shri Dyaneshwar Ganpat Bhoir was not an employee of CHA firm at all. Further it was on record that Shri Dyaneshwar Ganpat Bhoir who bought in the licence was paying commission to the CHA for using his licence and the CHA did not know the importer at all. Therefore, the charges against the CHA are conclusively established.
4.1 The learned A.R relies on the judgement of the Honble High Court of Delhi in the case of Jasjeet Singh Marwaha vs Union of India 2009 (239) ELT 407 (Del.) wherein it was held that the statements recorded under Section 108 of the Customs Act, 1962 can be used as evidence in the CHALR proceedings. He also relies on the judgement of the Honble High Court of Andhra Pradesh in the case of Commissioner of Customs and Central Excise, Hyderabad II vs. H.B. Cargo Services 2011 (268) ELT 448 (A.P.) wherein it was held that a single act of corruption is sufficient to award maximum penalty of revocation of licence and sub-letting of licence for consideration is an act of corruption.
4.2 The learned A.R. also relied on the judgement of the Honble High Court of Gujarat in the case of OTA Kandla Pvt. Ltd. vs. Union of India 2011 (269) ELT 457 (Guj.) wherein it was held that sub-letting of licence, non-maintenance of statutory records, obtaining custom pass for non-employees, permitting employees of client to use it before Customs authorities for monetary gain are major violations of CHALR and, therefore, revocation of licence in such a situation cannot be considered harsh and therefore he pleads to uphold the impugned order revoking the licence.
5. We have carefully considered the rival submissions.
5.1 From the records of the case it is seen that Shri Dyaneshwar Ganpat Bhoir in his statement recorded under Section 108 of the Customs Act on 19.09.2008 had, inter alia, admitted that he was working with Shri Chandrakant Popatlal Mota not as an employee but on a commission basis and he had been paying Rs.700/- per consignment to Shri Chandrakant Popatlal Mota. He had handled the import consignments of M/s Dilip Impex and contacted persons namely Shri Sunil Umesh Kapoor and Shri Thakur Prasad Shukla and Shri Thakur Prasad Shukla promised him Rs.3,500/- per consignment and on the basis of documents given by Shri Thakur Prasad Shukla he had filed the documents with the Customs. The averments of Shri Dyaneshwar Ganpat Bhoir was also confirmed by the statement of Shri Thakur Prasad Shukla recorded on 28.10.2008 by the DRI. Further, Shri Chandrakant Popatlal Mota, in his statement recorded under Section 108 on 19.09.2008, had clearly admitted that Shri Dyaneshwar Ganpat Bhoir had been giving him consignment-wise commission and he had obtained a Customs pass showing Shri Dyaneshwar Ganpat Bhoir as an employee of M/s. C.P.Mota & Co. and Shri Dyaneshwar Ganpat Bhoir had been independently doing the clearance work from Nhava Sheva and Mumbai using the CHA licence of M/s. C.P.Mota & Co. Shri Dyaneshwar used to pay him a commission of Rs.700/- per clearance of import consignment of his parties and since the import consignment brought by Shri Dyaneshwar Bhoir was being cleared through his CHA firm, he had signed the related documents brought in by Shri Dyaneshwar. From the above statements it is clear that Shri Chandrakant Popatlal Mota had sub-let the licence to Shri Dyaneshwar Bhoir who was not an employee but shown as an employee only for the purpose of handling the transactions. Further, a copy of the Terms of Appointment of Shri Dyaneshwar has been produced by the learned Counsel at the time of hearing. One of the Terms of Appointment order read as follows:-
That in respect of clearance of consignments of parties introduced/brought by you, you shall be fully and entirely responsible for payment of duty/other statutory charges/fees and bills.
That in respect of clearances of consignments of parties introduced/brought by you, you shall be fully responsible for the settlement of disputes with statutory authorities like Customs, MBPT, Central Excise, Octori etc. without involving the CHA firm C.P. Mota & Co. 7.1 The above terms and conditions of appointment are very strange. No employer, worth his name, will put such terms and conditions in respect of his employees holding the employee responsible for all the wrong doings. As per records, Shri Dyaneshwar Bhoir was shown as an employee of M/s. C.P. Mota & Co. only during the period from March, 2008 to December, 2008. During the enquiry proceedings, the CHA had brought in two defence witnesses, one Shri Jagdish Bhanushali and the another one Ms. Bharati Umakant Gavda. Shri Jagdish Bhanushali deposed before the Inquiry Officer that he knew Shri Dyaneshwar Bhoir for around three years as an employee of M/s. C.P. Mota & Co. whereas from the records, it seen that Shri Jagdish Bhanushali was with C.P. Mota & Co. only for the period from March 2008 to December 08, less than one year, which shows that the said witnesss statement is completely unreliable. Similarly, the other defence witness Ms. Bharati Umakant Gavda stated that Shri Dyaneshwar Bhoir has been drawing salary from April, 2008 and apart from the salary she was not aware of any other payments made to Shri Dyaneshwar Bhoir. From the statement made under Section 108 of Shri Dyaneshwar Bhoir and Shri Chandrakant Popatlal Mota, it is absolutely clear that Shri Dyaneshwar Bhoir was paying a commission to Shri Chandrakant Popatlal Mota and not the other way. Therefore the statements of witnesses brought in by the CHA at the time of inquiry proceedings do not support the CHAs contention in the matter at all.
5.2 In the instant case, it is clear from the records that Shri Dyaneshwar Bhoir was working independently and was using the licence of CHA for a consideration of Rs.700/- per consignment. Therefore, sub-letting of the CHA licence by Shri Chandrakant Popatlal Mota is proved beyond any doubt and, therefore, violation of Regulation 12 of CHALR, 2004 is clearly established. It is on record that the CHA firm had shown Shri Dyaneshwar Bhoir as an employee and obtained a customs pass when, in fact, he was not an employee at all. As per Regulation 13(b) of CHALR, 2004, a CHA shall transact business either personally or through an employee. In as much as Shri Dyaneshwar Bhoir was not an employee and the transaction was handled by him, there is a clear violation of Regulation 13(b). In the instant case, their entire transaction handled by Shri Dyaneshwar Bhoir who was handling the transaction independently of the CHA. Therefore, the CHA advising their clients to comply with the provision of the Act does not arise. Further it is an admitted position that Shri Chandrakant Popatlal Mota, proprietor of the CHA had been blindly signing the customs documents brought in by Shri Dyaneshwar Bhoir. Accordingly, violation of Regulation 13 (d) and (n) of CHALR, 2004 are also proved. Similarly the allegation that CHA did not know the importer at all in violation of Regulation 13 (a) is also proved. Therefore, the conclusion of the adjudicating authority that the CHA has violated the provisions of CHALR, 2004 by sub-letting his licence and also undertaking various transactions in violation of the CHALR provisions stands clearly established and his findings in this regard cannot be faulted.
5.3 The Honble High Court of Gujarat in the case of OTA Kandla Pvt. Ltd. (supra) held that once breach of statutory regulations and misconduct by misusing CHA licence is established, revocation of licence can be done. The ratio of the said judgement squarely applies to the facts of the present case and accordingly we hold that the decision of the adjudicating authority in the impugned case cannot be faulted. Similarly, the Honble High Court of Andhra Pradesh in the case of H.B. Cargo Services (supra) also held that a single act of corruption is sufficient to award maximum penalty of revocation of licence. The ratio of this judgement squarely applies to the present case.
6. Respectfully following the ratio of the above decisions, we uphold the impugned order of the learned adjudicating authority. Consequently, the appeal gets dismissed.
(Pronounced in open Court on .) (Ashok Jindal) Member (Judicial (P.R. Chandrasekharan) Member (Technical) nsk 11