TaxTMI 
TaxTMI 
2014 (12) TMI 531
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....ARE-1 copy bearing Sl.No.15 dated 17.02.2004, was tampered. All the three containers declared to contain acrylic blankets were opened and examined on 09.03.2004, in presence of independent witnesses when gross mis-declarations in respect of description, quantity as well as value, were found. In as much as, in respect of Container No.FSCU 3978092 as against the declared quantity of 260 bales containing 7800 pcs, the goods were actually found to be 120 bales containing 3920 pcs. Similarly, in respect of other two Containers, as against quantity of 260 bales containing 7800 pcs declared in the shipping bill, the goods were found to be 116 bales each containing 3860 pcs. While the goods were declared as Acrylic Mink Blankets", actually found to be "Shoddy Blankets" of relatively low value. The Shipping Bills were under the DEPB Scheme with a total credit entitlement of Rs. 19.75 lakhs revenue, to this extent, appeared to have foregone and illegally availed by the parties, but for the said interception. On query, it revealed that the shipping bill in respect of the above export consignments, were filed by M/s S. C. Ghosh & Company (India) Pvt. Ltd., i.e. the Appellant. During the course....
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....ducted in this case, revealed a gross misconduct on the part of the CHA, which had facilitated the attempted fraudulent export of acrylic blankets to Korea by resorting to mis-declaration of value and quantity by M/s Brij Spinners, Ludhiana, licence of CHA was suspended by the Department on 31.03.2004. A show cause notice dated 06.09.2004 was issued to the exporter firm and the two partners of the CHA, were made a notice for alleged aiding and abating an attempted illegal export of goods in question to Korea. Another show cause notice dated 23.11.2004 were issued to the Appellant firm i.e. CHA under Regulation 22 of the Customs House Agents Licensing Regulations, 2004 (CHALR) for revocation of their licence and forfeiture of the security deposit under the provisions of Regulation 20 (1) of the CHALR, 2004, for gross misconduct on their part and their failure to comply with authorization/obligation, put on the CHA under Regulation 13 (a), 13 (b), 13 (d) & 19 (8) of the CHALR, 2004. The CHA was directed to submit its explanation before the enquiry officers. The CHA submitted a reply on 11.01.2005 and appeared for personal hearing before the enquiry officers on 02.07.2005. After going....
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.... of Customs, Cochin : 2007 (212) ELT 112 (Tri.-Bang.) (iii) Neptune Clearing Agency Vs. Commr. of Customs (Gen.), Mumbai : 2007 (212) ELT 97 (Tri.-Mumbai); (iv) Bharat Overseas Communications Vs. Commr. of Customs (Gen.), Mumbai : 2007 (209) ELT 142 (Tri.-Mumbai) (v) Shree Ganesh Shipping Agency Vs. Commr. of Customs, Bangalore : 2011 (271) ELT 236 (Tri.-Bang.). 4.4 The ld. Advocate submitted that on 31.03.2004, the licence of CHA was suspended by the ld.Commissioner. The said order was not passed complying with the principle of natural justice nor any post decisional hearing was granted and hence, the order is bad in law and proceedings initiated on the basis of this suspension order is also bad in law. He submits that suspension for indefinite period was held to be non-sustainable as held in the following decisions: (a) Ocean Shipping & Clearing Agency : 2010 (251) ELT 517 (b) Subrata Guha Sarkar : 2013 (293) ELT 488 (c) Mathre and Sons Vs. CC (G), Mumbai : 2007 (218) ELT 417 (Tri.-Mum). 4.5 The ld. Advocate submitted that in case of revocation of the licence, p....
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....jee vide his voluntary statement dated 09.03.2004, submitted that he had worked earlier as a Customs House Agent for two years, but after the expiry of his licence in 2000-2001, he lost his job, that after, with the help of a broker, he had been doing the clearance job using the stamp of M/s N. N. Bose and Nephew and presently, he was using the stamp of M/s S. C. Ghosh & Company (India) Pvt. Ltd.. Shri Mukherjee stated that he had agreed to do the work on the condition that he would be paid Rs. 7,000/- per container. The ld.A.R. submitted that even though the Appellant holding a CHA licence, are engaged in processing of Import and Export clearance documents for a long time, they are well-conversant with the procedure in spite of this, he did not obtain any authorization from the exporter before filing the shipping bills. He also failed to supervise his employee and therefore, violated the provisions of Regulation 13 (a) and 19 (8) of the CHALR, 2004. The ld. A. R. further submitted that Shri Sanjib Das, the Managing Director of the CHA firm, in his stated recorded under Section 108 of the Customs Act, 1962, admitted that the Exporter, M/s Brij Spinners, was a new client of the CHA.....
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....d that the Department rightly revoked the Customs House Agency Licence of the CHA firm This judgement has subsequently been endorsed by the Hon'ble Supreme Court as reported in 2002 (142) ELT A87 (S.C.). 5.5 As regards the contention of the ld.Advocate that the CHA should not be liable for the act/omission of his employee, which was not in knowledge of the CHA, the ld. A. R. submitted that the Hon'ble Bombay High Court in case of Commr. of Customs Vs. Worldwide Cargo Movers : 2010 (253) ELT 190 (Bombay) observed that "the Regulation, 19 (8) of CHALR, 2004, clearly stated that the CHA will be responsible for all acts or omission of its employee in as much as the employee had no authority to go into the Customs area except as the Regulation 8 implies of the CHA firm. He having function for the CHA firm and the CHA firm having been clearly told in advance that these are the rules, it was its obligation to observe the said Regulation. That being the position, the Revenue has rightly drawn the inference that the CHA was party to the entire episode. This being the position, the principles of vicarious liability of the master will certainly apply. 5.6 As regards, the continuous ....
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....n Hyderabad. On examination, it came to notice that the goods sought to be exported were not ladies nightwear, but mere rags. Enquiry conducted revealed that the signed blank shipping bills were handed over by the CHA to the exporter to whom he did not know. In this case, the Hon'ble Andra Pradesh High Court observed that in case of corruption regarding "blank shipping bills" issued for consideration of Rs. 150/-per shipping bill, there cannot be any punishment lesser than maximum. No other lesser punishment can be contemplated in such cases. Any sympathy shown in such cases is totally un-called for and oppose to public interest. The said Hon'ble High Court set aside the order of CESTAT, which had cancelled the revocation of licence. The proportionality of regulation was also held that in case of subletting of licence, obtaining customs pass for non-employees, permitting employees of client to use it for monetary gain and removal of goods without obtaining authorization from the importer, which was observed by the Hon'ble Gujarat High Court in the case of OTA Kandla Pvt. Ltd. Vs. Union of India : 2011 (269) ELT 457 (Guj.). In case of Worldwide Cargo Movers, (supra), the....
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....rity, or only order forfeiture of part of whole of security, on any of the following grounds name - (a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under regulation 10; (b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else; (c) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station. (2) Notwithstanding anything contained in sub-regulation (1) the Commissioner of Customs may in appropriate cases where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such Agent is pending or contemplated." 6.2 We find that in this case, the Managing Director, Shri Sanji....
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....ai : 2009 (244) ELT 562 (Tri.-Mumbai), holding that "the personal hearing is not mandatory and is not violative of principles of natural justice in cases of suspension, where disciplinary authority finds it to be a fit case for immediate action, pending enquiry". 6.5 The ld. Advocate has submitted that the licence of the CHA was suspended on 31.03.2004; the show cause notice was issued on 23.11.2004; enquiry report was submitted on 18.04.2006; the reply was given on 16.06.2006; the personal hearing was taken by the ld. Commissioner on 26.10.2009 and the order of revocation was passed on 12.07.2010 revoking licence and forfeiting security deposit and therefore, from 31.03.2004 till date, the Appellant, CHA, has suffered a lot and therefore, considering the doctrine of proportionality order on revocation should be set aside. He referred to various case laws where based on the above doctrine, revocation was set aside. 6.6 Review of the various case laws cited by the Ld Adv. on the proportionality aspect, we find that the analysis of the said judgement revealed that in case of M/s Falcon Air Cargo & Travels Pvt. Ltd. (supra), the Hon'ble High Court of Delhi, remanded the case to ....
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....has to be viewed seriously. In gross cases, taking a lenient view may lead to adverse effects. However, in a given case, where the violation of the CHALR is not very serious in nature and borders on to procedural irregularities, the Tribunal's power to modify the order imposing penalty cannot be questioned. Section 23(8) of the Customs House Agents Licensing Regulations, 1984 provides for an appeal against an order passed under Regulation 23(7). Power of the appellate authority under Regulation 23(8) is not restricted. Therefore, it would not be correct to state that the appellate authority under Regulation 28(8) of CHA Licensing Regulations, 1984 does not have the power to restore the licence revoked by the lower authorities in an appropriate case." In this regard, our findings are stated in the preceding paragraphs regarding the nature of infractions committed by the CHA and the consequences thereof. In case of Vipil Pranlal Dosi (supra), the issue was that the importer's authorization not obtained at the time of clearance, but import documents/declaration was duly signed by the importer and presented to the Customs Authorities, which never requested the CHA to produce ....
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....d adjudicated and the licence continued to be suspended for a long time, the order of revocation was set aside. In the present case, we find that the show cause notice relating to abetting is already decided and no penalty was imposed but the ld.Commissioner (Appeals) had categorically observed that this could not amount to absolving the Appellant from the violation of CHALR, 2004. 6.7 We find that the doctrine of proportionality was considered in case of OTA Kandla Pvt. Ltd. (supra), wherein the Hon'ble High Court of Gujarat observed as under: "11. Again, while considering the "Doctrine of Proportionality", the Hon'ble Supreme Court, in the case of Coimbatore District Central Cooperative Bank v. Coimbatore District Central Cooperative Bank Employees Association & Anr. reported in (2007) 4 Supreme Court Cases 669, has held as under: "18. 'Proportionality' is a principle where the Court is concerned with the process, method or manner in which the decision-maker has ordered his priorities, reached a conclusion or arrived at a decision. The very essence of decision-making con....
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....xercised in a manner which is out of proportion to the fault". 14. In view of the above principles laid down by the Hon'ble Supreme Court in various judgments it clearly transpires that the judicial review of administrative action or of proportionality of punishment is permissible only if the decision of the decision maker is found to be illegal, unreasonable, irrational or suffering from any procedural impropriety, and that the High Court in exercise of jurisdiction under Article 226 or 227 should not interfere with the legal orders of Administrative Authorities. So far as the facts of the present case are concerned, as stated hereinabove, respondent No. 3- the CEGAT has upheld the order of respondent No. 2, revoking the licence of the petitioner as CHA on the ground of petitioner having committed breach of statutory regulations and the misconduct by misusing its licence. In the opinion of this Court, once the decision of the respondent Authorities that the petitioner committed violation of statutory regulations and the misconduct is found to be within the legal parameters, all the legal consequences as a result of such violation and the breach have to foll....
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....that this violation in itself is sufficiently grave so as to justify the extreme measure of revocation". As against above, in the present case, the CHA has admitted that he issued the blank declaration and the challans to a third party processing of the export goods. One of the person, Shri Arup Kumar Mukherjee, in his statement recorded under Section 108 of the Customs Act, 1962, admitted that since 2001-2002, he has been using the stamp of the present Appellant CHA and that in the present case, he has processed these documents on a consideration of Rs. 7000/ per container, show that the CHA was fully aware of the facts that he was acting in total defiance of CHA Regulations and therefore, the case law cited by the ld.Advocate is distinguishable. We notice that the Hon'ble High Court of Hyderabad in case of H. B. Cargo Services observed that in case of blank shipping bills issued for consideration of Rs. 150/- per shipping bill, there cannot be any punishment lesser than maximum. It held no other lesser punishment can be contemplated in such cases. 6.9 We think it proper for reproduce herein the observation of the Tribunal in case of Shree Venkatesh Shipping Services Pvt. Lt....
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....ill have far reaching consequences in the transaction of business by the Custom House officials". Certain observations of the Hon'ble High Court of Bombay in Worldwide Cargo Movers case are also apposite to this context and the same read thus: "Similarly, when one comes to the disciplinary measures, one must not lose sight of the fact that the appellant-Commissioner of Customs is responsible for happenings in the Customs area and for the discipline to be maintained over there. If he takes a decision necessary for that purpose, the Tribunal is not expected to interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or its employees. The decision is best to be left to the disciplinary authority save in exceptional cases where it is shockingly disproportionate or mala fide." 6.10 The ld. Advocate has submitted that in the departmental proceedings initiated against the Appellant, the penalty imposed by the Additional Commissioner on the Appellant and Shri Jaladhar Bose, has been set aside and therefore, revocation also is liable to be set aside. In support, he has placed a reliance i....