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2. The Commissioner of Customs (Export) Jawaharlal Nehru Custom House, Nhava Sheva vide letter dated 20.10.2010 had informed the Commissioner of Customs (General) New Custom House, Mumbai that a case of evasion of ADD by MITPL involving willful suppression of facts, mis-statement, manipulation of documents based on advice given to the importer by DHL had been detected. DHL had violated the code of conduct prescribed under CHALR. Pursuant to the above report, the Commissioner of Customs (General), Mumbai vide Order No.25/2010 dated 22.10.2010 prohibited DHL from transacting any CHA related business in Mumbai Custom Zone I, II and III with immediate effect invoking Regulation 21 of CHALR. Vide the order impugned before us, the Commissioner observed that the CHA had full knowledge of manipulation of documents submitted to customs, had in their possession copies of original and manipulated documents and had advised the importer to evade payment of ADD. CHA had violated Regulation 13 (d) of CHALR in as much as they had failed to advise their client to comply with the provisions of the Customs Act 62 (the Act). It was evident to him that DHL had willfully manipulated the invoice, packing list, sea way bill and bill of lading in order to evade payment of ADD. By withholding original and manipulated documents, the CHA had failed in discharging its obligation under Regulation 13(d), 13(e), 13(n) and 19(8) of CHALR. Pending enquiry contemplated against DHL under Regulation 22 of CHALR and finding continuance of the CHA in transacting business prejudicial to the interest of the revenue, the impugned order was passed suspending the license of the CHA to prevent further misuse.

3. In the appeal filed before the Tribunal, the impugned order is assailed on the following grounds.

3.1 The impugned order was based on the order of the Commissioner of Customs (General), Mumbai without conducting an independent enquiry into the facts and circumstances of the case. The said order had been passed in violation of the principles of natural justice. The adjudicating authority had relied on an order of the Commissioner of Customs (General), Mumbai which was similarly passed without hearing the appellant. Immediate suspension was a drastic action and no exceptional circumstances existed warranting such an order. The impugned order recorded details of the correspondence within the organization which clarified the correct provision of the notification prescribing ADD which applied to the goods involved and the correct course of action required to be followed by the importer. The impugned order wrongly ordered suspension of the licence. The Commissioner relied on a statement of Shri Sanjeev Nayak (Manager Supply Chain) of MITPL as per which changes in the documents had been made after discussion with the appellant. This statement was not substantiated nor the appellant given an opportunity to cross-examine him. The impugned order wrongly held that the appellants were aware of the corrections carried out in India by the importers. The Commissioner wrongly found that the documents seized from the computer of the appellants were original (one set) and manipulated (another set). The customs authorities had released the consignment against the shipping documents produced by the CHA. The allegation that the appellants had full knowledge of the manipulation and was aimed at evading due amount of ADD was an error. The finding that the appellants had advised the importer to evade ADD was also false. There was no basis for holding that the appellant had violated Regulation 13 (d) of CHALR and colluded with the importer in perpetrating fraud. The finding that the appellant had failed in discharging its obligations as required under Regulation 13(d), 13(e), 13(n), 19(8) of CHALR was incorrect. No ground was made out to justify recourse to immediate action against the CHA. The appellants employed 400 persons in their organization and cleared 15000 shipments every month on an average and were paying customs duty aggregating Rs.2500 crores per annum. The impugned order suffered from the vice of non-application of mind and severely affected the business of the appellant and its infrastructure including the employees.

(d) Fairdeal Enterprises (P) Ltd. Vs. C. C (Airport & Administration) - 2010 (256) ELT 545 (Cal.) In this judgment, the Honble High Court observed that there can be no doubt that power under Regulation 20(2) has serious civil consequences for a customs house agent and the principles of natural justice must be complied with. However, in cases that required immediate suspension the post decisional hearing may suffice.

(e) Jasjeet Singh Marwah Vs. UOI - 2009 (239) ELT 407 (Del.) In this judgment, the Honble High Court rejected the contention of the CHA that licence could be suspended only for violation of the regulations under CHALR and upheld suspension under Sub-Regulation 2 of Regulation 20. In the said case, offending transactions had taken place in the year 2002-03 and adjudication of the offences by the importer had been concluded on 20.10.2006. The licence of the CHA was suspended on 29.1.2007. The Honble High Court upheld the order of immediate suspension under Regulation 20. The High Court went on to observe that it was not only for the CHA to ensure that the entries made in bills of entry were correct but also that a true and correct declaration of value and description of goods was made and in the event of any infraction such as mis-declaration of goods, he could be penalized under the Regulation 20 of CHALR, 2004 if it resulted in mis-conduct which was of the nature which rendered him unfit to transact the business of CHA at the customs station.

Regulation 13 (d) of CHALR reads as follows:

REGULATION 13.?Obligations of Customs House Agent. - A Customs House Agent shall 
(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 Deputy Commissioner of Customs or Assistant Commissioner of Customs;

This provision clearly mandates that the CHA intimates the department any violation committed by the importer to obtain a benefit not authorized by law. In finding a violation of this provision, the fact whether the correction was carried out by the CHA or by MITPL has no relevance.The impugned order rendered a finding that DHL manipulated invoice, seaway bill and bill of lading in order to evade ADD by withholding original and manipulated documents. The finding that DHL manipulated invoice, seaway bill and bill of lading is not supported by evidence. However, in the paragraph 5 which precedes this observation contains the finding that the CHA had full knowledge of manipulation of documents submitted to the customs and that it had in its possession copies the original and manipulated documents. They had failed to advise their client to comply with the provisions of Act and colluded in perpetrating the fraud thereby violating regulation 13 (d) of CHALR. This finding, we observe, is correct.