Custom, Excise & Service Tax Tribunal
A. Abba & Sons vs Commissioner Of Customs (General), ... on 2 February, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.C/89762/13-MUM (Arising out of Order-in-Original No. 129/2013/CAC/CC(G)/PKA/CBS(ADMN) dated 13/11/2013 passed by Commissioner of Customs (General), Mumbai) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, 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 : No 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?
====================================================== A. Abba & Sons Appellant Vs. Commissioner of Customs (General), Mumbai Respondent Appearance: Shri Anil Balani, Advocate for Appellant Shri M.K. Swangi, Jt. Commissioner (AR), for Respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing : 02/02/2016 Date of Decision : -------------- ORDER NO Per: M.V. Ravindran
This appeal is directed against Order-in-Original No. 129/2013/CAC/CC(G)/PKA/CBS(ADMN) dated 13/11/2013.
2. The relevant facts are the appellant herein is a CHA. On a report dated 28.07.2008 received from DRI vide letter no. DRI/MZU/E/Int-43/2006 dated 25/07/2008, informing about the involvement of appellant CHA in the case of Fraudulent availment of Drawback on exporters in the name of IEC which were obtained on the basis of fictitious addresses at and in the name of non-existent person, the CHA license of appellant was suspended. Further documents were received from the office of DRI as also the show cause notice issued to appellant on the ground that further Drawback was withdrawn against shipping bills handed over by them, an inquiry was ordered and the inquiry officer held that the three charges under regulation 13 (a), 13(e) & 13(n) of CHALR, 2004 and all the charges were held to be proved; after considering the appellant CHA detailed submissions on 17.10.2013 and 07.11.2013, the adjudicating authority after following principlce of natural justice, revoked the CHA license and also ordered for future of entire amount of security deposit.
3. Learned Counsel would submit that the impugned order is passed without regards to the legal provisions and the law on subject; it is discriminatory and arbitrary, illegal and mis-construed and in similar cases commissioner allowed the argument of other clearing agents. It is his submission that the 8 Drawback shipping bills were filed in June, July 2006 and after examination were allowed to be exported and the exporter received drawback directly, CHA had no role in the matter and the revokation of license is ordered on 19.11.2013, that is after 6 years from the date of instance. It is his further submission that the inquiry and investigation was concluded by the authorities in 2008, a point which is over looked; that appellant had verified genuineness of exporter IEC and business identification appearing on DGFT website and thereafter accepted the clearing work in good faith and in normal course of business as, also these shipping bills was brought by their regular freight forwarder M/s. Shashikant Logistic and the export documents were all found to be correct and cleared by the Customs officers and allowed shipment without any doubt being raised. It is his submission that since there was no doubt about the freight forwarder, there was no reason to doubt about the genuineness of exporters and failure of investigating authorities to trace out the exporter cannot be attributed as negligence on the part of appellant. It is also his submission that the verification of the exporter done by the authorities in Surat is also not correct and it is surprising that the intelligence agency could not apprehend the person who was the real owner of Exported Cargo. He would submit that in an identical/similar set of facts, this bench in the case of Baraskar Brothers 2013 (294) ELT 415 set aside the revocation order.
4. Learned Departmental Representative would submit that the order of the adjudicating authority is self explanatory and would rely upon the following case laws (i) Worldwide Cargo movers 2010 (253) E.L.T. 190 (Bom.) (ii) Shri kamakshi Agency 2001 (129) E.L.T. 29(Mad.). He would submit that Honble High Court of Gujarat in the case of OTA Kandala Pvt. Ltd. 2011(269) E.L.T. 457(Guj.) held that revocation of the license is an administrative action and proportionality of the punishment is permissible. He reiterates the findings of the lower authorities.
5. On consideration of the submissions made, we find that the charges against the appellant as per articles charges are as under.
10.1 Article of Charge-I a. In terms of Regulation 13(a), A Custom House Agent shall obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as Customs House Agent and produce such authorization whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs 10.2 Article of Charge-II a. In terms of Regulation 13(e), A Custom House Agent shall 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.
10.3 Article of Charge-III a. In terms of Regulation 13(n), A Custom House Agent shall ensure that he discharges his duties as Customs House Agent with utmost speed and efficiency and without avoidable delay.
It can be seen from the above reproduced articles of charges, the defense of the appellant is the documents were received from Shri Sitaram Tambe of Shashikant Logistic who was a regular customer, and in respect of article or charge no. 2 that they had exercised due deligence certain information by looking up the IEC Code etc. and as regards charge note 3 there is nothing on record to indicate that appellant had not discharged functions with utmost speed and efficiency. Against such defenses, the adjudicating authority, though held against the appellant, has not brought on record anything to indicate which is proving that the CHA had violated the provisions of regulations 13 (a), (e), (n). It is also undisputed that the exports were cleared by the Customs authorities in June and July, 2006, after examination of the very same documents on which reliance is placed to hold against the appellant.
6. In the case of Baraskar Brothers, this bench in similar set of facts held that CHA license cannot be revoked. We reproduce the relevant paragraphs.
2.?The facts of the case are that it has been reported by the Directorate of Revenue Intelligence (DRI) that drawback had been fraudulently availed by companies holding Import Export Codes (IEC) obtained on fictitious addresses and in the names of persons who were found to be non-existent. The IEC holders M/s. Yas Nas Exports and M/s. Aka Chem International have cleared shipping bills and declared FOB value of exports excessively high to claim ineligible Drawback. Statement of Shri Vijay Anant Baraskar, Partner of the appellant was recorded where he has stated that they have attended to customs clearance in respect of exports of M/s. Yas Nas Exports and M/s. Aka Chem International; that the documents for the purpose of customs clearance of the firm were given to him by Shri Sitaram Shantaram Tambe, a forwarder, having a firm by the name M/s. Shashikant Logistics; that he had never met the owner/proprietor of the said firms. He admitted that necessary precaution had not been taken by their firm as a CHA to meet the exporter and to verify the genuineness at the time of filing the shipping bills. On the basis of that following articles of charges were framed for violation of Regulations 13(d), 13(n) and 19(8) of the CHALR, 2004 for not advising his client to comply with the provisions of the Act, not bringing the matter to the notice of Dy. Commissioner/Assistant Commissioner of Customs and not discharging their duties as Customs House Agent with utmost speed and efficiency and without avoidable delay and not ensured the proper conduct of any such employees in the transaction of business as agents and be held responsible for all acts or omissions of his employees in regard to their employment. An inquiry was conducted and during the course of enquiry, it was informed that on verification of DGFT website on the internet, both the exporters were registered with JNCH. Further, the appellant also noted the Drawback account of the said two firms was also maintained at JNCH in which Drawback claim would have been credited. The Inquiry Officer found that charges against the appellant under Regulation 13(d) and 13(n) stands proved and under Regulation 19(8) has not proved.
3.?On the basis of inquiry report, personal hearing was granted to the appellant and it was observed that the process of identifying a client is very important from the point of view of customs administration and the CHA has failed in his basic duties by accepting a fictitious, unidentifiable entity as client. Since this was not done, therefore, the CHA was not efficient enough to perform his duties. Thereafter, it was held that the CHA has not performed their job in a professional manner, whereas considering the lapse due to omission and commission on the part of the CHA, the CHA should be punished adequately. Therefore, their CHA licence was revoked. Aggrieved from the said order, the appellant is before us.
7.?After considering the submissions made by both sides, we find that in this case the main allegation against the appellant is that they have not verified the contents of the exporter. In fact, the appellant has taken due diligence to find out through DGFT website, whether the IE Codes are genuine or not, which were found to be genuine. Moreover, it was also verified from the JNCH where these exporters were registered and the Drawback account was also maintained at JNCH in which Drawback claim would have been credited, therefore, the allegation that the appellant had not verified the contents of the exporters is not sustainable. Further, we observe that in similar set of facts in the case of Setwin Shipping Agency (supra) wherein the same charges were made against the CHA and in that case, this Tribunal has held that CHA need not to be responsible for verifying the contents of the exporter. Thereafter, this Tribunal has revoked the order of suspension of CHA licence and the said order was accepted by the Commissioner of Customs (General), Mumbai. In the case of Thawerdas Wadhoomal (supra), this Tribunal has held that CHA files shipping documents on basis of material given to him by his clients and if in case of such exercise of his functioning, he believes in good faith that these documents were genuine, he is not liable to penal action. We further find that in the case of Daroowala Bros & Co. (supra), the Commissioner of Customs (General) has observed that I am of the view that CHA has performed their job in a casual manner. Even though I do not fully concur with the findings in the Inquiry Reports, there are enough evidence on records to point out that the CHA has not behaved prudently. But for the lapses on the part of the CHA as enumerated in the Inquiry Reports as well as in my observations after weighing defence put forth by the CHA, it is seen that no mala fide intent has been proved against the CHA and thereafter, he made operative the CHA licence after forfeiting the security deposit. In this case, it was observed by the Commissioner of Customs that the CHA have not performed their job in a professional manner. Whereas I do not agree with the findings of the Inquiry Officer in toto, there are enough evidences to show that CHA has not functioned in a prudent manner. Considering the lapses due to omission and commission on the part of the CHA, I am of the view that the CHA should be punished adequately and thereafter, he revoked the CHA licence.
8.?We find that the observation/findings of the Commissioner of Customs in the case of Daroowala Bros & Co. (supra) and in the appellants case are almost identical and in both the cases treatments given are different. The Commissioner of Customs (General) should maintain consistency in passing the orders/decisions and should not follow the policy of pick and choose. In this case, we find that the Commissioner of Customs (General) has followed the policy of pick and choose and there is no consistency in decision while dealing the same situation, thereby he revoked the CHA licence of the appellant, which cannot be permitted. In view of these observations, we do not find any merit in the impugned order, the same is set aside and the appeal is allowed with consequential relief by making operative of CHA licence No. 11/97 by setting aside the revocation of CHA licence. The issue involved in this case is very similar to the facts of the case of Baraskar Brothers is reproduced herein above.
7. As regards the various case laws relied upon by the learned departmental representative, we find that in Kamakshi Agency, the issue was the CHA license issued to the proprietor of pensioner company forwarded to its power of attorney and blank documents were signed by the proprietor without knowing importer and exporter and nature of goods exported or imported; in case of Worlwide cargo movers, it is recorded facts are there was mis-declaration of value, real export and importer was involved in outright smuggling of a car, wherein an employ of the CHA had played a big role and there was no proper advice of the CHA to their client. It can be seen that in all these three decisions, the facts were totally different that the facts as is in the case in hand.
8. In the facts and the circumstances of this case, we find that decision of the tribunal in the case of Baraskar Brothers is squarely applicable and nothing was brought to our notice that the judgment of the tribunal in the case of Baraskar Brothers has been up turned by any higher judicial forum. In view of the forgoing, we set aside the impugned order as unsustainable and the appeal is allowed with consequential relief by setting aside of revocation of CHA license.
(Pronounced on----------------) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) akp 1 2 APPEAL No.C/89762/13-MUM