TaxTMI 
TaxTMI 
2015 (10) TMI 2330
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....ll of Entry No. 616429 dated 02.09.2010 on behalf of M/s. J.R. Smelters Pvt. Ltd, for clearance of scrap metal through Chennai Port. The goods were imported in 20 containers valued at Rs. 41,10,251/-. They claimed the benefit of concessional rate of duty under the Customs Notification No. 21/2002. On 06.09.2010 five containers were selected for examination and it was found that instead of the declared item of scrap metal there were 501 MTs of used railway sleepers valued at Rs. One crore. The importers deposited an amount of Rs. 75 Lakhs towards duty and submitted a bank guarantee of Rs. 33,80,000/- which has already been encashed by the department and provided a bond for Rs. 1.6 Crores to release the goods. It is seen that proceedings were initiated against M/s. J.R. Smelters Pvt. Ltd. The Commissioner of Customs, Chennai on the basis of the allegations made on the appellant, prohibited their operation at Chennai in terms of Regulation 21 of CHA Licensing Regulations, 2004 and Vide Order No. 410/2010, the Commissioner of Customs, Tuticorin also suspended their licence issued at Tuticorin Customs. The appellant filed a Writ Petition before the Madurai Bench of the Honble Madras Hi....
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....y CFS. Therefore, action of the clearing clerk was in accordance with instructions in general. The SCN itself concedes that the power of Attorney holder of the firm was not aware of the misdeclaration and that there was no proper supervision over the employees. Once this position is accepted for the omissions made by the clearing clerk, the appellant should not be penalized. The Ld. Counsel reiterated the grounds of appeal and submitted that it is not proper to allege that the appellant has manipulated the documents. Revocation of licence has brought the livelihood of the licensee as well as the employees of the licensee firm to a standstill and the appellant firm has already suffered a huge loss because of the suspension for the past several years. On the overall facts and circumstances of the case, in absence of any evidence regarding the involvement in the alleged fraud, the OIO needs to be set aside with consequential relief. He relied on the following case laws in support of his contentions: 1. M/s. HIM Logistics P.Ltd Vs. CC, New Delhi 2013-TIOL-662-CESTAT-DEL 2. M/s. ARK Logistics P. Ltd. 2010 (261) ELT 648 (Tri.-Bang.) 3. M/s. Mhatre & Sons Vs. CC....
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.... acts of commissions and omissions of his employees. It was for the CHA to have an effective supervision over the conduct of the employees in the transaction of business. He further submits that the appellant failed to fulfill the following obligations under CHALR, 2004 in violation of the said Regulations: 1. The CHA violated the conditions in the bond executed by them under Regulation 10 of CHALR 2004. 2. They have not obtained authorization from the company by whom they are for the time being employed a CHA and failed to comply with the provisions under Regulation 13(a) of CHALR, 2004. 3. They have signed blank documents and handed over to an unauthorized person to facilitate the import, who was to be duly approved by the Dy. Commissioner or Assistant Commissioner of Customs under Regulation 13(b) of CHALR, 2004. 4. They have not advised their client to comply with the provisions of the Act and thus violated the provisions under Regulation 13(d) of CHALR, 2004. 5. They have failed to verify the correctness of the information provided, in as much as he colluded with the importer as the goods were not lying in the CFS wherein he got the....
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....rt. Whereas the goods are actually lying under SANCO CFS, which was to be examined by D.C Customs of that FS. Thus it clearly proves the involvement of CHA and his employees. CHA cannot plead innocence. The relevant portion of the findings of the adjudicating authority is reproduced as under:- "16.01.The CHA filed a Bill of Entry number 616429 dated 02.09.2010 to the Deputy Commissioner in charge of SANCO CFS for getting open order. The Deputy Commissioner selected five containers for first check examination. AO/EO in charge of SANCO CFS allowed the marked containers to be opened for examination and CFS issued open order for inspection slip on 06.09.2010 for opening the containers for examination. On. 07.09.2010, the CHA presented one of the marked containers for examination to Examiner (SANCO CFS) and informed AO (CFS) to produce the remainingfour containers for examination the next day. DRI officers, vide their letter dated 09.09.2010, sent message to DC (Docks) in charge of SANCO CFS to examine the cargo in the present of DRI officers. But the CHA, on the same day (i.e. 09.09.2010) but in charge of GATEWAY CFS for first check examination. The DC in-charge of GATEWAY CFS....
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.... AC/DC. As per the principles of vicarious liability the master is to be vicariously liable for the acts of his servant acting in the course of his employment. Thus the CHA has failed to comply with the Regulation 13(b) of CHALR, 2004. 19. The CHA did not conduct any supervisory work of handling documents/cargo and entrusted the customs clearance work to some unapproved employees and the CHA failed to exercise due diligence. He took shelter by claiming that he was in Bombay at the time of assessment but the period of spanning 13 days (from 02.09.2010 to 14.0-9.2010) is too long to ignore any supervision on the part of CHA or his employees. The CHA did not produce any evidence or reasons for his present at Mumbai and the violation of Regualtion 13(e) of CHALR, 2004 has been established. 20. The contentions that the importer was having factory of production, IEC, reliable address and the importer gave good business to the CHA for number of years, are not sufficient for verifying antecedents. The CHA has not taken any reasonable precautions to ascertain the genuineness and bonafides of the importer and thereby it appears that the CHA has failed to comply with the Reg....
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....the Customs officer to check authorization in favour of the CHA before allowing him to act as CHA for the importer; that thus there was a contributory default on the part of both; that under these circumstances the CHA alone could not be blamed and punished; that punishment of cancellation of licence was disproportionate to the act of omission committed by the CHA and the action taken against the CHA cancelling the licence was set aside. 24.02. The facts of the present case are that the CHA colluded with the importer in misdeclaring the goods and value, manipulated the documents and fraudulently obtained examination reports. The CHA was charged with six allegations like not obtaining authorization, allowed unapproved employees to act as a CHA, not verified antecedents of the importer etc. The facts of the case referred is not applicable to the facts of the present case." In this regard, he rely on the Hon'ble High Court of Madras order in the case of Sri Kamakshi Agency Vs. CC, Madras 2001 (129) ELT 29 (Mad.), wherein the Hon'ble High Court upheld the Tribunal's order for revocation of licence. The relevant portion of the Order of the High Court is reproduced as under:-....
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..../97 and C/Ref/28/97 respectively and by a common order dated 17-4-1997, the questions earlier mentioned above have been referred for our consideration. A reading of Regulations 13 and 14 of CHALR, 1984 disclose that under Regulation 13, Every licence granted or renewed under the Regulations should be deemed to have been granted in favour of the licensee and no licence should be sold or otherwise transferred. The various sub-clauses under Regulations 14 disclose that Custom House Agent should obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as Custom House Agent and produce such authorisation whenever required by an Assistant Collector of Customs; that he should transact business in the customs station either personally or through an employee duly approved by the Assistant Collector of Customs, designated by the Collector; that he should 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 Assistant Collector of Customs; that he should exercise due diligence to ascertain the correctness of any information which he imparts to a....
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....d. The very purpose of granting a licence to a person to act as Custom House Agent is for transacting any business relating to the entry or departure of conveyance or the import or export of goods at any customs station. For that purpose, under Regulation 9 necessary examination is conducted to test the capability of the person in the matter of preparation of various documents, determination of value procedures for assessment and payment of duty, the extent to which he is conversant with the provisions of certain enactments etc. Therefore the grant of licence to act as a Custom House Agent has got a definite purpose and intent. On a reading of the Regulations relating to the grant of licence to act as Custom House Agent, it is seen that while Custom House Agent should be in a position to act as agent for the transaction of any business relating to the entry or departure of conveyance or the import or export of goods at any customs station, he should also ensure that he does not act as an Agent for carrying on certain illegal activities of any of the persons who avail his services as Custom House Agent. In such circumstances, the person playing the role of Custom House Agent has got....
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....ee of the Applicant, the same would not in any way alter the situation since that had resulted in a serious loss to the respondent. The fact remains that the respondent sustained a loss of duty by the reckless and irresponsible behavior of the Applicant in the course of discharge of his functions as Custom House Agent licensee. The respondent therefore rightly revoked the Custom House Agent licence of the Applicant. In the circumstances, while answering the questions now referred by the Tribunal in C/Ref/13/97 in favour of the respondent holding that the order of the Tribunal to the effect that on further deposit of Rs. 25,000/-, the licence of the Applicant should stand renewed with effect from 1-1-1997 is wholly illegal and improper, the various questions referred in C/Ref/13/97 are answered against the Applicant. The Reference Case is disposed of accordingly. The ratio of the Hon'ble High Court order is squarely applicable to the facts of the present case. Further, the Hon'ble Supreme Court dismissed the SLP filed by the appellant against the High Court's Order reported in 2002 (142) ELT A87 (S.C.). In view of the Apex Court's ruling which is directly binding on us and....