TaxTMI 
TaxTMI 
2003 (9) TMI 476
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....ices for the reason that DRI does not qualify to be a 'proper officer' of Customs. Introduction of this new ground was challenged by the DR stating that this point was not raised earlier. However, we are of the view that the appellants can be permitted to raise this ground even though not raised earlier. The ld. Counsel cited various case laws to support his argument that, the show cause notice cannot be issued by the DRI. The following case laws viz. Commissioner of Customs, Mumbai v. Ramesh Nebhnani [2001 (138) E.L.T. 232], CC, Bombay v. Poona Roller [1997 (89) E.L.T. 604], Nath International Corporation v. CC, Mumbai [2003 (152) E.L.T. 430], CC, Mumbai v. Mahesh India [2003 (151) E.L.T. 605], Manohar Bros. (Capacitors) v. Collector of Customs, Mumbai-II [1998 (98) E.L.T. 821], Pushpit Steels Pvt. Ltd. and Anr. v. CC, Cochin [2001 (130) E.L.T. 520 (T) = 2000 (41) RLT 842], Union of India v. Ram Narain Bishwanath [1997 (96) E.L.T. 224 (S.C.)], Bakeman's Home Products Pvt. Ltd. and Ors. v. Collector of Customs [1997 (95) E.L.T. 278 (T) = 1997 (21) RLT 602] and Alcobex Metals (P) Ltd. v. Collector of Central Excise [1992 (58) E.L.T. 108] were cited. However, as pointed out by the ld....
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....ilal Jain's plea that Shri Pankaj Joshi was the sole incharge handling the said work who had died by then is also not tenable as the Director of the Company is responsible for the activities undertaken by his firm and his ignorance of the same is only a pretext to escape his liability. Further, I find that Shri Shantilal Jain in his statement dated 4-7-2000 had admitted that they had undertaken documentation and clearance of the goods on behalf of More Overseas/Pan-Am Impex Corporation and their authorised signatory was Shri Pankaj Joshi who later had died. He admitted that for the job undertaken by them they received the payments from More Group/Ashwani Kumar More and Shri Rajendra Kumar Mohta. He further confirmed that after customs clearance the goods were actually delivered to a transporter nominated M/s. More Overseas/Ashwani Kumar More and in most of the consignments M/s. Shri Krishna Roadways, Gandhidham were the transporter. It transpires that M/s. Kandla Clearing Agency/Sh. Shantilal Jain as a Director of the Company was in the knowledge that M/s. Pan-Am Impex Corporation is a non-existent/fake firm for the reasons that the agency was engaged and paid for by More Overseas/....
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....tious or the names mentioned in the import documents are pseudo names. Therefore, the portion of Commissioner's order extracted above is considered as being illustrative to deal with the remaining cases. 5. As against this, in appeal memorandum, it has been stated that :- "Commissioner has not given any finding as to why the Commissioner has held that the importer was fictitious and the payment for imported goods was made by M/s. More Group of Companies for facilitating use of forged/fake advance licence. However, whether the advance licence used by the importer was bogus or fake is not an issue examined or decided by the Commissioner in these proceedings, "who had done such alleged creation of a fake or bogus licence?" or "who had tampered with the licence?" is also not an issue examined and decided by the Commissioner in these proceedings. The Commissioner could not have taken out the proceedings only on the basis that M/s. Indo Expo Trading Co. of Mumbai had in their possession an advance licence with the same number, but for different goods, with different value specified. In the absence of a decision, as to whether, the advance licence in question was bogus or fake or t....
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....ence, being submitted by it along with the Bill of Entry on behalf of importer, under the instructions of their client, was bogus or forged. The appellant-company has conducted business in the normal and routine course and there was nothing unusual in the way it had conducted the transaction for clearance of goods in question by filing a bill of entry and the relevant documents. Therefore, the action of imposing penalty on the appellant-company under Section 112(a) of the Act is illegal and without jurisdiction. If the Customs authorities, before whom the bill of entry with the documents including the advance licence in question were filed could not find out that the advance licence were bogus or forged or tampered, the Custom House Agent could not have found out such fact in any case. In the Customs authorities including the Appraisers and the Assistant Commissioner/Deputy Commissioner who assessed the bill of entry after due verification of the advance licence could not find that the advance licence was not valid or genuine, it was also impossible for the CHA to find out such a fact. Hence, the penalty is uncalled for because it has not been established that the appellant-company....
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....shi alone (who expired) and there is no evidence to the contrary the penalty imposed on Sh. Shantilal Jain is illegal. It is disputed by them that payment were received by the Company and not by the individual Sh. Shantilal Jain. The mere fact of filing a Bill of Entry on behalf of a non-existent firm is not a reason on which any penalty can be imposed on the Director when Pankaj Joshi was also a Director staying at Kandla was looking into the matter of entire affairs. The penalty imposed on Director is strenuous. It is true that the Commissioner has passed several similar orders involving imports of goods by More Group of Companies where bills of entry were filed by the appellant-company. However, in all these cases which took place around the same time, the appellant-company had filed bills of entry with all the relevant documents including the advance licences handed over to it by the representatives of More Group of Companies. In all these cases, bills of entry were assessed finally by the concerned Customs authorities without any objection, and thus, it was not a case where any document was suppressed or not submitted by a CHA thereby failing in its obligations. If the Custom....
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....ce licence. Nevertheless CHA obviously had full knowledge of the importing firm being non-existent and fictitious or not concerned with the import in question. Yet, he undertook to file the documents in the name of such firm for seeking clearance of the import consignments. It is not, as if, the CHA did not know the actual companies of More Group of Companies, considering their long-standing business association. As a responsible Customs House Agent they are aware that in case any Customs violation is noticed subsequent to import, it is the importer who has to face the consequences. Therefore, filing a document knowingly on behalf of a non-existent or using a wrong name of the client displays an active role of the CHA in shielding the real importers from any penal or legal consequences. The CHA could not claim that though the documents were received from more Group, importers named in the documents were real importers. It is obvious that, he has represented to the Customs House, posing as the agent of a non-existing importer or by using a wrong name of the importer and completed the import formalities on behalf of such non-existent firm. This facilitated the actual importer (smuggl....
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....that Customs official themselves were not aware of any fraud or tampering with the advance licence and the CHA was, therefore, not in a position to know the existence of such a fraud. In case, if the conduct of the CHA was to be honest (1) he could not have accepted or prepared document in the name of unknown fictitious importer (ii) he could have make a declaration before the Customs authorities that though the document is presented in the name of a importer, the said importer does not exist. In terms of CHA regulation a CHA is allowed to transact business handled "on behalf of a client". If the "client" is non-existent, it is obvious that the CHA is not an agent of a client. In that case the entire responsibility of any commission or omission connected with the document must be borne by him for the reasons that for all purposes the CHA becomes a person who has filed the import document and thereby he becomes the importer, because there is no client. Either he produces the client on whose behalf a document is filed or he faces the consequences arising therefrom. 9. The challenge to penalty has been made on the ground that the CHA had no knowledge of any fraud in the licence.....