Custom, Excise & Service Tax Tribunal
Mehul & Co vs Commissioner Of Customs (General) on 24 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/85680/2015
[Arising out of Order-in-Original No: 18/CAC/CC(G)/SRP/CBS (Admn) dated 16/03/2015 passed by the Commissioner of Customs (General), Mumbai]
For approval and signature:
Honble Shri Ramesh Nair, Member (Judicial)
Honble Shri C J Mathew, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
No
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Mehul & Co
Appellant
Vs
Commissioner of Customs (General)
Mumbai
Respondent
Appearance:
Shri S N Kantawala, Advocate for the appellant Shri M K Mall, Asst Commissionoer (AR) for the respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Honble Shri C J Mathew, Member (Technical) Date of hearing: 24/05/2016 Date of decision: 10/11/2016 ORDER NO: ____________________________ M/s Mehul & Co, holder of customs broker licence no. 11/755 initially issued under the erstwhile Customs House Agents Liencing Regulations, 1984 and now operating under Customs Broker Licencing Regulations, 2013 was proceeded against under the Regulations consequent upon misdeclaration detected in bill of entry no. 8060973 dated 27th September 2012 for import of a mixed variety of goods. Allegedly, the goods were found to have been misdeclared in quantity and description; the goods were held to have been undervalued by five times and the importer-on-record was found to be a college student through whom an Import-Export Code had been obtained following which he issued a power-of-attorney to the alleged operator of the import business.
2. In adjudication proceedings under Customs Act, 1962 initiated on 28th June 2013, the appellant, and his employee, were placed on notice for imposition of penalty under section 112 of Customs Act, 1962. The licence was suspended vide order no. 09/2013-14 dated 12th July 2013 and notice for inquiry under regulation 20 of Customs Broker Licencing Regulations, 2013 was issued on 9th October 2013. Inquiry Officer submitted his report on 15th December 2014 holding all articles of charge framed against the appellant to have been proved.
3. The charges against the appellant were that he had allowed his licence to be misused contrary to prohibition on sale or transfer of licence, failure to obtain authorization from company, firm or individual employing them, failure to advise client to comply with the provisions of the Act, failure to exercise due diligence to ascertain the correctness of information imparted to client, failure to discharge duties with utmost speed and efficiency and failure to verify the antecedent, correctness of the code, identity and veracity of at the specified address. The inquiry report was contested as having been unduly delayed, for attempt to justify the delay by calling for cross-examination of the partner of the licencee-firm after the formal conclusion of the inquiry and that the charges were held as proved merely by reference to statements recorded under section 108 of Customs Act, 1962 without any attempt at corroboration. The Commissioner of Customs rejected these contests and, relying upon the inquiry report and other cases initiated against the licence-holder, revoked the licence under regulation 18 of Customs Brokers Licencing Regulations, 2013 besides forfeiting the security deposit furnished by M/s Mehul & Co before commencement of operations. Hence, this appeal.
4. The relationship between the customs broker and licencing authority is a statutory one. While the authority is not employer of the brokers, the brokers themselves as well as that of their kin and their employees, are dependent upon the licence for their livelihood. Consequently, the relationship though certainly not one of master-servant is one whose termination has as grave consequences as that of dismissal of an employee from an organization. Accordingly, the sanctity of procedure and adherence to principles of natural justice can be no less than that prescribed for disciplinary proceedings.
5. One of the contentions of the appellant is that the proceedings were initiated and concluded without any substantive reliance on credible evidence. We do note that there are a number of surmises in the inquiry report and in the findings of the adjudicating Commissioner. Much reliance has been placed on statements recorded under section 108 of Customs Act, 1962. Its evidentiary value in proceedings initiated in connection with investigation into smuggling has its worth. However, section 108, which reads thus 108. Power to summon persons to give evidence and produce documents. (1) Any gazetted officer of customs duly empowered by the Central Government in this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.
(2) xxxxx (3) xxxxx (4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). incorporated in the statute for carrying out an inquiry under the Customs Act, 1962 is pertinent only for the intended purpose. Proceedings under the Customs Broker Licencing Regulations, 2013 are in pursuance regulations framed by the Central Board of Excise & Customs under section 146 of Customs Act, 1962. It is a self-contained provision that empowers issue, operations, suspension and revocation of broker licences. It also needs noting that, where the statute intends to cover subordinate legislation, there is a specific incorporation of the expression and the rules framed thereunder. Such qualifying is conspicuously absent in section 108. That is not entirely surprising as proceedings under the Customs Act, 1962, that may resort to inquiry under section 108 may result only in fiscal detriment while proceedings under the Customs Brokers Licencing Regulations, 2013 could lead to deprivation of livelihood. Conformity to process and evidence beyond statements are a pre- requisite for acts that are detrimental to of the livelihood of an licencee. The inquiry report has accorded overwhelming relevance to the contents of the statements recorded under section 108. While these could be relied upon for the narration, as it were, of the allegations, they are not sufficient to establish the charge of contravening of the Regulations whose prescriptions lack the specificity of section 111 and 113 of Customs Act, 1962. The lack of acceptable, credible evidence to sustain the allegations is a taint on the proceedings.
6. Learned Counsel for appellant has drawn attention to the inordinate delay at various stages of the proceedings which, in view of the decision of the Tribunal in M/s Zen Cargo Movers Pvt Ltd v. Commissioner of Customs, New Delhi [2016-TIOL-524-CESTAT-DEL], relying on other decisions, held thus 4.The Honble High Court of Delhi in Shankar Clearing & Forwarding vs. CC (Import & General) 2012 (283) ELT 349 (Del), the Honble Madras High Court in Sanco Trans Ltd vs. CC, Sea Port/Imports, Chennai 2015 (322) ELT 170 (Mad), this Tribunal in Rajeev Mayeer vs. CC (Import & General), New Delhi 2014 (308) ELT 146 (Tri-Del), in Om Freight Forwarders Pvt Lttd vs. CC (General), Mumbai 2014 (311) ELT 793 (Tri-Mumbai) and in Sri Radhakrishna Shipping (P) Ltd vs. CC (General), Mumbai 2015 (318) ELT 660 (Tri-Mumbai), have uniformly held that if any of the intermediate steps such as issue of show cause notice, drawing up of an inquiry report, or passing of a revocation order is beyond the periods mandated under Regulation 20 of the 2013 Regulations, (corresponding to Regulation 22 of the Customs House Agents Licencing Regulation, 2004 as amended in 2010), the eventual order of revocation would be invalid.
7. The decisions cited by Learned Authorized Representative and, in particular that of the Tribunal in Baraskar Brothers v. Commissioner of Customs (General), Mumbai [2016-TIOL-482-CESTAT-MUM] are not as recent as that of the Principal Bench. We also take note that this decision, while holding that time limitation provided in the Regulations is directory and not mandatory, did scrutinize the various findings on merit before dismissing the appeal against the revocation. The precedential value of this decision in deciding upon a challenge to the validity on the ground of non-adherence to the time-lines is not evident.
8. The suspension was ordered seven months after the search of premises. The charge-sheet was issued almost three months thereafter. It is also alleged that the inquiry was closed by issue of order-sheet on 11th February 2014 but the inquiry officer chose to re-open inquiry for cross-examination of the partner of the licence-holder about six months later. The revocation was ordered almost thirty months after the search of the premises of the licencee. The appellant did participate in the proceedings.
9. There is no justification for this delay that is so much at variance with the prescriptions in the Regulations. This compounds the casual manner in which the inquiry was conducted by placing reliance on statements that were recorded for purposes other than proceedings under the Regulations. The harsh penal consequence visited upon the appellant has compounded the disregard for deadlines prescribed in the Regulations. We, in accord with the decision in re Zen Cargo Movers Pvt Ltd, allow the appeal and set aside the impugned order.
(Pronounced in Court on 10/11/2016) (Ramesh Nair) Member (Judicial) (C J Mathew) Member (Technical) */as 2