Custom, Excise & Service Tax Tribunal
M/S Service Bureau vs Cc, New Delhi on 28 August, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 28.8.2012
Date of Pronouncement :
Custom Appeal No. 96 of 2012
[Arising out of the Order No. 06/VKG/Policy/2012 dated 22.3.2012 passed by the Commissioner of Customs, New Delhi)
For Approval & signature :
Honble Ms. Archana Wadhwa, Member (Judicial)
Honble Shri Mathew John, Member (Technical)
1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it would 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 of the order?
4. Whether order is to be circulated to the Department Authorities?
M/s Service Bureau Appellant
Vs.
CC, New Delhi Respondent
Appearance:
Appeared for Appellant : Shri J.M. Sharma, Consultant
Appeared for Respondent : Shri A. Saini, A.R.
CORAM: Honble Ms. Archana Wadhwa, Member (Judicial)
Honble Shri Mathew John, Member (Technical)
Order No.dated.
Per Mathew John :
The appellant has filed this appeal challenging the cancellation of Customs House Agents License which the appellant was holding since 1977 till the passing of the impugned order dated 22-03-12.
2. The proceeding against the appellant started consequent to mis-declaration of value in certain shipping bills filed during February and March of 2003, by two exporters, namely M/s Give & Take Overseas and M/s Krishna Overseas showing the name of the appellant as the CHA, especially with reference to a shipping bill filed on 21-02-03 in the name of M/s Give and Take Overseas in respect of which the goods were actually found to be overvalued and the goods could be intercepted before export. The exporter was not traceable. Shipping bills filed in the past in name of M/s Krishna Overseas indicating the appellant as CHA were scrutinized and it was found that drawback of Rs. 21.18 lakhs was paid to M/s Krishna Overseas but this exporter was also not traceable.
3. Shri. Naresh Kumar Mahto an H-Card Holder of another CHA Three Aces Cargo Care (P) Ltd. who came forward to clear the goods of shipping Bill filed in the name of M/s Give and take Overseas stated that the shipping Bill was filed by one Mr. Pintoo of M/s Service Bureau. Mr. Pintoo was not an employee of the appellant but had worked for sometime as an employee of M/s Indo International Shipping Agency a company engaged in arranging logistics for import and export of goods.
4. Since the impugned shipping bills were filed showing the appellant as CHA, Revenue was of the view that the appellant was instrumental in filing shipping bills in the name of fraudulent exporters and hence it was necessary to suspend their CHA license to protect the interest of Revenue. Therefore the license of the Appellant was initially suspended by order dated 10.6.2003. The appellant came in appeal to the Tribunal which set aside the said order for the reason that there was violation of principles of natural justice while passing the said order and remanded the matter for fresh consideration. The Commissioner thereafter passed order dated 11.7.2003 after hearing the appellant and the order resulted in confirming the suspension. The main finding in the said order was that the appellant was sub-letting their license to M/s Indo International Shipping Services and M/s DCFC Logistics and Shri Pintoo, and Shri Kamal employees of Indo International Shipping Services were instrumental in filing the fraudulent shipping Bills in the name of Krishna Overseas. The said order was also challenged before the Tribunal and the Tribunal vide its order dated 31.7.2003 quashed the said suspension order finding that no prima facie case was made against the appellant on the allegation that they had been subletting their license. The relevant paragraph of the Tribunals order dated 31-07-2003 is reproduced below:
3 On going through the materials relied on by the Commissioner we find that they are not sufficient to come to a prima facie conclusion that the appellant was guilty of subletting its licence to M/s Indo International Shipping Services or M/s DCFC Logistics (P) Ltd. A reading of the order would clearly show that both Mr. Pintoo and Shri Naresh Kumar Mahto have denied the signature on the shipping bill. The Commissioner has observed that at present it is not clear who actually signed the shipping bill. So long as it is not shown that a person authorized by the appellant has signed the bill and allowed M/s DCFC Logistics (P) Ltd. or M/s Indo International Shipping Services (P) Ltd. to carry out further procedure for clearing the goods, it cannot be assumed that the appellant had sublet its licence to M/s DCFC Logistics (P) Ltd. or M/s Indo International Shipping Services (P) Ltd. In the light of the above, we are of the view that no prima facie case is made on against the appellant on the allegation that they had sublet their licence to M/s DCFC Logistics (P) Ltd. or M/s Indo International Shipping Services (P) Ltd. If that be so, there is no justification for continuing the suspension of the licence of the appellant pending detailed investigations into the export fraud case. We, therefore, set aside the order impugned and allow the appeal.
5. Further enquiries were conducted and thereafter the Commissioner issued Show Cause Notice dated 12.4.2004 proposing revocation of the license as per Regulation 20(1)(b) of the Custom House Agent Regulation 2004 . On denial of the charges in the Show Cause Notice an enquiry was conducted as envisaged on Regulation 22 (2). In the enquiry proceeding the appellant made the submission that it is already decided by the Tribunal vide Order dated 31.7.2003 that there was no case against the appellant and they did not make any other submission.
6. On receipt of the Inquiry Report the matter has been adjudicated by the impugned order canceling the license CHA license of the Appellant. The findings against the appellant as given in the impugned order are re-produced below:-
22 On going through enquiry report and the statement of Shri Amandeep Chugh, H card holder of CHA, Shri Pintoo @ Indu Shekhar Jha, Shri Vikas Singh, G Card holder of the CHA and documents from exporters, it is noticed that Shri Amandeep Chugh H Card holder of CHA in whose name the above referred Shipping Bills were filed in his statement recorded under Section 108 of Customs Act, 1962 on 23.4.2002 though denied filing the said Shipping Bills but stated that the Shipping Bill in question was filed by one Shri Naresh Kumar. He further stated that the CHA M/s Service Bureau are subletting their licence to other parties. One of which is DCFC Logistics other is of Mr. Kamal. He also stated that he used to remain with them at the time of customs clearance. Shri Pintoo @ Indu Shekhar Jha in his statement dated 7.5.2003 and 1.8.2003 stated that he was involved in customs clearance job of parties of M/s Indo International Shipping Service who were using the CHA licence of M/s Service Bureau, Shri Pintoo also gave the names of the parties, which were getting customs work done through M/s Indo International Shipping Service. He also informed that the Shipping Bills for the parties of M/s Indo International Shipping Service were either signed by Shri Vikas Singh or Shri Amandeep Chugh of M/s Service Bureau, he also informed that M/s Service Bureau were also working for some other parties similarly placed. Shri Vikas Singh in his statement dated 24.4.2003 has confirmed of rendering services to Shri Kamal of M/s Indo International Shipping Services and also M/s DCFS Logistics. In his further statement on 5.8.2003, Shri Vikas Singh admitted that Shri Amandeep Chugh occasionally used to sign the Shipping documents on his behalf. He also informed that there was no other authority holder of CHA M/s Service Bureau except himself and Shri Amandeep Chugh. Details of clearance effected from ACU, ICD, (PPG) & ICD (TKD) by Shri Vikas Singh, G authority holder on behalf of M/s Service Bureau were scrutinized for the period from 2001 to 2003 and it was revealed that the CHA has effected simultaneously clearances on the same date and at the same time at 2 to 3 other ports. Shri Vikas Singh, was one and only authorized signatory of CHA, G authority holder had effected clearance and shown his presence at number of ports and the timings are overlapping and since he could not have been present simultaneously at more than one place at a time, it appears that CHA was utilizing unauthorized persons for clearance work at various ports. Some of the exporters who are clients of M/s Service Bureau have also confirmed that they have given export consignments to M/s Indo International Shipping and also made payments to them in lieu of services rendered. This clearly indicates that M/s Service Bureau had subletted their CHA licence to M/s Indo International Shipping Services. A large number of Shipping Bills to aforesaid exporters do not bear the signatures of Shri Vikas Singh, G authority holder of CHA M/s Service Bureau and some of the Shipping Bills have clearly been signed by Shri Amandeep Chugh, the erstwhile H authority holder of CHA who is not authorized to sign such documents.
23. From the facts discussed in para 22 above it is amply clear that CHA M/s Service Bureau had sublet their licence to other party. As it is also confirmed that the party has engaged unauthorized persons for customs clearance work.
7. In the case of excess drawback claimed by M/s Krishna Overseas, the appellant submits that they were not made a party at all and consequently there is no adverse finding against the appellant, in that matter. In the matter of exports by M/s Give and Take Overseas, the adjudicating authority took the stand that the Tribunal has decided vide order dated 31-07-2003 that there was no evidence against the appellant and hence revoked the suspension order against the appellant. It is to be noted that this order by itself does not examine the role of the appellant in the shipping bill filed by M/s Give and Take Overseas but only records the fact that the Tribunal in its order dated 31-07-2003 did not agree with the finding that the appellant was sub-letting their license. This order is of no additional value than the order dated 31-07-2003 of the Tribunal in deciding the role of the appellant in the shipping bill filed by M/s Give and Take Overseas.
8. Against the above background, the appellant submits that after passing of the final order dated 31.7.2003 by the Tribunal quashing the suspension order passed by the Commissioner on 11-07-2003, the department has not been able to adduce any further evidence so as to warrant the cancellation of the license of the appellant.
9. The contention of the appellant is that the impugned shipping bills were not filed by the appellant though the shipping bills indicated the name of the appellant as the CHA. It is contested that some other persons filed shipping bills using the name of the appellant.
10. The Counsel also contests that the findings in para 22 of the impugned order are based on general observations without pointing out specific evidences at the stage of Show cause Notice because of which they could not defend the allegation. He specifically points out the following objections:
(a) The Shipping Bill Nos and date on which the H-card holder signed for CHA were not furnished;
(b) Specific instances where the appellant was seen to be functioning at more than one port at the same time has not been given to them;
(c) The name of the parties who said that they entrusted the consignments to Indo International Shipping Agencies for Customs clearance and also made payments to them for customs clearance are not disclosed.
11. Opposing the prayer, ld. A.R. for Revenue submits that the order of Tribunal dated 31.7.2003 was only a prima facie view and it is wrong to take a view that the matter has been decided by the Tribunal finally. He submits that further investigation was done and an Inquiry was also conducted under Regulation 22 (2) in which the appellants did not make any pleadings regarding the allegation in the SCN but only insisted that the matter was already decided by the Tribunal which is not the correct position. He submits that the evidence collected subsequent to the said order should be considered and the matter assessed again at this juncture when the final order passed for revocation of license is under challenge. He submits that the appellant was in fact sub-letting their license for customs clearance of goods especially to M/s DCFS Logistics and Indo International Shipping Service for clearing the goods for which the said two concerns were arranging logistics. Further even the H-card holder of the appellant was allowed to sign shipping bills which is not authorized by law. In this matter, reliance is placed on the statement of Shri Vikas Singh, G-card holder and he had stated that Shri Amandeep Chugh, H-card holder, occasionally signed shipping bills in certain cases. The Ld. A.R. further points out that in the two cases of exporters viz. M/s Give & Take Overseas and M/s Krishna Overseas the shipping bills were filed in the name of the appellant as CHA but the exporters could not be traced. This means that the appellant was taking up business of fraudulent exporters without due diligence that was required on its part. He also makes a submission that the appellant CHA was found handling work at different ICDs at the same time without having adequate number of authorized persons permitted to handle customs clearance which implies that the appellant was subletting their license causing serious risk to the Revenue and therefore he should not be allowed to act as CHA.
12. We find that the entire investigation was started on the ground that the appellant had a role in export of goods with fraudulent declaration of value by two firms viz. M/s Give & Take Overseas and M/s Krishna Overseas. The impugned order revoking the license gives the back ground facts regarding shipping bills filed in the names of the said firms but the final finding is only that the appellant had sub-let its license to M/s Indo International Shipping Agencies. No clear linkage between the shipping bills filed in the name of M/s Give and take Overseas and M/s Krishna Overseas and the logistics firm M/s Indo International Shipping Agencies has been explicitly stated either. There is nothing unusual in one CHA having tie ups with one or two logistic companies to promote each others business.
13. The allegation in the Show Cause Notice was that the appellant did not comply with regulation 13, 14(b), 14 (d) and 14 (l) of erstwhile CHLAR, 1984. These provisions read as under :-
13 Licence not transferable, - Every licence granted or renewed under these Regulations shall be deemed to have been granted or renewed in favour of the licensee and no licence shall be sold or otherwise transferred.
14(b) transact business in the Customs Station either personally or through an employee duly approved by the Assistant Commissioner of Customs or Deputy Commissioner of Customs, designated by the Commissioner. 14(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 Assistant Commissioner of Customs or Deputy Commissioner of Customs. 14(1) ensure that all documents prepared or presented by him or on his behalf are strictly in accordance with orders relating thereto.
14. Since the evidences appearing against the appellant on this matter was once appreciated by Tribunal as on 31-07-2003 and not found to be satisfactory, it is necessary to assess the results of the investigation done after that order. The further enquires done after passing of the order dated 31-07-2003 are the following:
(a) a statement from Shri. Pintoo alias Indu Shekhar Jha dated 01-08-2003 which states that the appellant was sub-letting their license for clearance of the goods of Indo International Shipping Services;
(b) a statement of Shri. Vikas Singh (G-card holder of the Appellant) dated 05-08-2003 stating that Shri. Amandeep Singh Chungh (H-card holder of the appellant) occasionally used to sign the shipping documents on his behalf;
(c) the fact the computer data shows that the appellant was seen functioning at many different ports at the same time without having adequate personnel for such representation.
(d) the fact that Shri. Vikas Singh has not been able to produce party-wise account and authorization letters of exporters for whom the appellants had acted as CHA.
15. As contested by the appellants (para 10 above), the first three allegations as above and findings in the impugned order to that effect, are without giving any specific details about the instances of each type of evidence and hence the appellant had no opportunity to rebut the allegations against them. It is not safe to rely on the statement of Shri Pintoo without any corroboration especially in a situation where the need of suspicion in the matter of Shipping Bill filed by M/s Give and Take Overseas was pointing to him. So the findings in the impugned order in this matter is faulty.
16. The only fact that needs to be considered in addition to the evidence already appreciated by the Tribunal while passing its order dated 31-07-03 is the fact that the appellant has not been able to produce the authorization letters from the clients for whom they were acting as agents during the period 2001 to 2003. In this matter the proceedings have been conducted without putting the appellant on notice for failure to comply with Regulation 14 (a) of CHLAR 1984.
17. On an overall appreciation of the facts we find that the further evidence collected against the appellant after passing of the order dated 31-07-03 has been minimal. Whatever evidence has been collected has not been disclosed to the appellant giving specific instances to enable them to put up appropriate defense that they may have. So we are of the view that there is no case for altering the prima facie finding given by the Tribunal by its order dated 31-07-03.
18. Consequently we set aside the impugned order and order that the license of the appellant be restored.
(Pronounced on..) (Archana Wadhwa) Member (Judicial) (Mathew John) Member (Technical) RM