Custom, Excise & Service Tax Tribunal
Unique Line vs Commissioner Of Customs on 28 October, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
CHENNAI
Appeal No.C/40242/2014
[Arising out of Order-in-Original No.22480/2013 dt. 13.11.2013 passed by the Commissioner of Customs (Seaport-Import), Chennai]
Unique Line Appellant
Versus
Commissioner of Customs,
Chennai Respondent
Appearance:
Shri N. Viswanathan, Advocate For the Appellant
Shri Kailash Chandra Jena, ADC (AR) For the Respondent
CORAM :
Honble Shri R. PERIASAMI, Technical Member
Honble Shri P.K. CHOUDHARY, Judicial Member
Date of Hearing : 13.10.2015
Date of Pronouncement : 28.10.2015
FINAL ORDER No.41453/2015
Per R. Periasami
The present appeal is arising out of the order dt. 13.11.2013 passed by Commissioner of Customs (Seaport-Import), Chennai against revocation of licence of Customs Broker under CBLR, 2013.
2. The brief facts of the case are that appellant is a Licenced Customs Broker having Licence No.CHN/R.66/2010-CHA and Shri A. Prabhakaran is the sole proprietor and authorized signatory of the CHA firm. Appellants licence was suspended based on the investigation report that appellant filed Bill of Entry on behalf of the importer M/s.Odyssey Impex for clearance of goods declared as 100% woven dyed fabric. Based on test report, the appellants goods were of linen/flax Fabric attracting Anti Dumping Duty. Since the appellants signed the blank documents for clearance of import of the said consignment without knowing the importer and without authorization from the importer, the customs broker licence was suspended on 12.8.2011 under Regulation 22 of CHALR 2004 [Regulation 19 of CBLR 2013]. Subsequently, the suspension was continued vide order dt. 8.9.2001. After completing the enquiry, SCN was issued on 2.7.2013 and after following the principles of natural justice, the adjudicating authority in the impugned order ordered for revocation of licence of customs broker, M/s.Unique Line (appellant) and also forfeiture of security deposit made by the customer broker. Hence the present appeal.
3. Ld. Advocate appearing for the appellant submitted that they have filed Bill of Entry on behalf of the importer M/s.Odyssey Impex for import of 'woven dyed fabrics'. The importer was arrested on the ground that imported goods attract Anti Dumping Duty as per the Textile Committee Report. As per the High Courts order the goods were ordered for re-test and as per the Textile Committee report of Mumbai it was confirmed that the goods were not flax fabric but is Ramie. Based on this, the Chennai Textile Committee also accepted that the goods are not flax and accepted their mistake. He submits that the proceedings against the importer was dropped and the importer was imposed only with nominal penalty and the goods were released. He produced copy of OIO dt. 16.5.2012 passed by Addl. Commissioner of Customs (DEPB) and submits in the above case that no proceedings were initiated against the appellant under Customs Act. He submits that CHA licence was suspended on 16.8.2011 and after suspension, enquiry report was submitted on 24.7.2012 after which the OIO passed by the Additional Commissioner against the importer. Their plea that there was no proceedings against the importer under Customs Act on ADD was not considered by the authority. He also submits that immediately after suspension, no SCN was issued within 90 days but the SCN was issued after completion of the enquiry incorporating the enquiry officers report in the SCN. He further submits that licence was revoked without any reasons. He further submits that since the date of suspension from 16.8.2011 for the 4 years, the appellant is out of business which itself is more than a punishment and submits that there is no revenue loss. Therefore, question of forfeiture of security deposit does not arise. He relied following case laws :-
(1) Thawerdas Wadhoomal Vs CC Mumbai 2008 (221) ELT 252 (Tri.-Mum.) (2) Setwin Shipping Agency Vs CC Mumbai 2010 (250)ELT 141 (Tri.-Mum.) (3) K.S.Sawant & Co. Vs CC Mumbai 2012 (284) ELT 363 (Tri.-Mum.) (4) Global Linkerz United Agencies Vs CC 2009 (239) ELT 76 (Tri.-Del.) (5) Ashiana Cargo Services Vs CC (I&G) 2014 (302) ELT 161 (Del.) (6) High Courts unreported order dt 12.7.2015 in the case of CC Vs A.M.Ahmed & Co.
4. On the other hand, LD. A.R reiterated the findings of the order and also SCN. Appellants have violated and the grounds for suspension and revocation of licence have been clearly brought out by the adjudicating authority on four grounds that (i) he has not obtained authorization from the importer to file the Bill of Entry and did not know the actual importer (ii) he did not verify the antecedents and credentials of the importer (iii) he did not advise the client to comply with the provisions of the Act and (iv) he did not exercise due diligence to ascertain correctness of any information related to clearance of any cargo. He further submits that Mr. A.Prabhakaran, the sole proprietor and authorized signature in his voluntary statement clearly admitted that he signed the blank documents for import of the goods by the importer on the advice of persons Mr.Babu , Mr.Rajaguru of M/s.Dayspring Shipping Private Ltd. He also admitted that he used to obtain fixed amount for Bill of Entry and shipping bills for lending his signature to file Bill of Entry. Therefore, he has clearly violated the provisions of CBLR. Adjudicating authority has rightly suspended the licences.
5. After hearing both sides, we find that the case relates to revocation of Customs Broker Licence of the appellant under Regulation 20 (7) of CBLR 2013. The adjudicating authority in the impugned order has brought out the grounds for revocation at para-6 of OIO. The major allegation is that he signed the blank documents without knowing the identity of the importer. Appellant contended that proceedings against the importer were dropped and the importer was left out with only nominal penalty. On perusal of the OIO dt. 16.5.2012 submitted by appellant, we find that the in the said OIO, the SCN was issued to the importer for misdeclaration of the value and also for misdeclaration of the description there was no allegation in the SCN on any ADD. We find that there was no proceedings dropped by the adjudicating authority on the importer as claimed by the appellant. We find that the goods were confiscated, value was enhanced and fine and penalty were imposed on the importer. The goods classified as "100% Ramie woven fabric" and also rejected the declared value from USD 0.5 per meter (CIF) and enhanced to USD 1.2564 per meter (CIF) and the goods were confiscated and allowed on imposition of redemption fine of Rs.10,000/- and penalty of Rs.5000/-. Therefore, the appellants contention that entire proceedings have been dropped against the importer is not correct. Further, we find that as per the violation of CHALR, the sole proprietor of CHA himself had admitted that he signed blank documents, Bill of Entry without verifying the identification of the importer on the advice of persons of M/s.Dayspring Shipping Pvt. Ltd. and without obtaining authorisation from importer. We find that there is no allegation that appellant abetted or contravened any provision of Customs Act in the import of goods nor any notice was issued against him under Customs Act for contraventions of provisions of the Customs Act. This being the facts of the case, there is no justification for extreme penal action of revocation of licence. In this regard, we find that the Tribunal in the case of K.S. Sawant & Co. Vs CC Mumbai held that a punishment to CHA should be commensurate with gravity of the offence and held that punishment of revocation of licence should be invoked as a extreme and harsh measure. The relevant paragraph of the Tribunals order is reproduced as under:-
"5.1?From the records, it is clear that the business in respect of the client M/s. Advanced Micronics Devices Ltd., was brought in by Shri Sunil Chitnis, who claims himself to be a sub-agent of the appellant CHA. The statements of Shri Badrinath and Shri Sunil Chitnis amply proves this fact. The question is, merely because the appellant procured the business through an intermediary who is not his employee, can it be said that he has sub-let or transferred the business to intermediary. The Tribunal in the case of Commissioner of Customs v. Chhaganlal Mohanlal & Co. Ltd. [2006 (203) E.L.T. 435 (Tri. - Mum.)], held that if the Customs clearance has been done through intermediary and business was got through intermediary, the same is not barred by the provisions of CHALR, 2004 and it cannot be stated that the appellant has sub-let or transferred his licence. In the case of Krishan Kumar Sharma v. Commissioner of Customs, New Delhi reported in 2000 (122) E.L.T. 581 (Tri.), this Tribunal held that the mere fact of bills raised on the intermediary cannot be held against the CHA firm to prove that the CHA licence was sub-let or transferred. Therefore, in the light of the judgments cited above, the charge of violation of Regulation 12 is not established. As regards the violation of Regulation 13(a), the adjudicating authority himself has observed that the I have no doubt to say that the CHA might have obtained the authorisation but it is surely not from the importer. Therefore, the authorisation submitted is not a valid one. This finding is based on a presumption. Obtaining an authorisation from the importer does not mean that the same should be obtained directly; so long as the concerned import documents were signed by the importer, it amounts to authorisation by the importer and, therefore, it cannot be said that there has been a violation of Regulation 13(a). As regards the last charge, i.e. the appellant did not transact the business through his employee but through Shri Sunil Chitnis thereby violating the provisions of Regulation 13(b), there is some merit in the argument. Both Shri Sunil Chitnis and Shri Ashish Patekar, authorised signatory of the appellant CHA, has admitted that it was Shri Sunil Chitnis, who undertook the clearance work on behalf of the CHA. Mere signing of the documents does not prove that the clearances were undertaken by the appellant CHA and, therefore, there is some merit in the argument that Regulation 13(b) has been violated by employing Shri Sunil Chitnis for doing the clearance work of M/s. Advanced Micronics Devices Ltd. The question now is whether revocation of licence is warranted for such a violation. In our view, the punishment should be commensurate with the gravity of the offence. Revocation is an extreme step and a harsh punishment, which is not warranted for violation of Regulation 13(b). Accordingly, we are of the view that forfeiture of security tendered by the appellant CHA is sufficient punishment and revocation is not warranted. Accordingly, we set aside the order of the revocation and direct the Commissioner of Customs (General) to restore the CHA licence subject to the forfeiture of entire security amount tendered by the CHA."
6. The Tribunals decision (supra) is squarely applicable to this case. Accordingly, we are of the view that revocation of licence or any punishment on the CHA should be commensurate with gravity of the offence whereas the adjudicating authority ordered for revocation of CHA licence and forfeiture of deposit which appears to be very harsh when compared to the nature of lapse. Therefore, the revocation of licence and forfeiture of security deposit is liable to be set aside. However, taking into overall facts and circumstances of the case, and also considering the appellant were under suspension from 16.8.2011 we impose a penalty of Rs.10,000/- (Rupees Ten thousand only).
7. In view of the above discussion, we set aside the impugned order of revocation of licence and forfeiture of security deposit and impose penalty of Rs.10,000/-. We direct the Commissioner of Customs to restore the licence and security deposit to appellant on compliance of payment of penalty as ordered above. Appeal is partially allowed. Issue order by 'Dasti'.
(Pronounced in open court on 28.10.2015)
(P.K. CHOUDHARY) (R. PERIASAMI)
JUDICIAL MEMBER TECHNICAL MEMBER
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