TaxTMI 
TaxTMI 
2015 (10) TMI 2330
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....ehalf 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 High Court against the order dated 09.04.2011 ....
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....torney 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 (General), Mumbai 2009 (241) ELT 401 (Tri.-Mum.) 4. M/s. Global Linkerz United Agencies Vs. CC, N.Delhi 2009 (238) ELT 76 (Tri.-Del.) 5. M/s. Falcon Air Ca....
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....her 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 examination report and thus failed to fulfill the obligation under Regulation 13(e) of CHALR, 2004. 6. They attempted clearance of imported goods by mis-declaring the same under CTH 72044900 instead of CTH 7302....
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.... 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 approached AO/EO in-charge of GATEWAY CFS and fraudulently obtained examination report in respect of the selected four containers for first check examination, by misrepresenting a if the consignment pertains to GATEWAY CFS and available in the GATEWAY CFS. 16.02.....
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....ling 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 Regulation 13 (o) of CHALR, 2004. 21. The CHA, in his letter dated 29.09.2011 admitted that he has not obtained specific authorization from the importer, by oversight. The reasons given by him was that the importer had been giving business for four years. The reason appears to be not reasonable and the CHA h....
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.... 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:- 5. As against the orders of the respondent dated 21-5-1996, the Applicant preferred an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal. By order dated 1-11-1996 in Appeal No. 1776 of 1996, the Tribunal found that though there was no evidence to show that the Proprietor of the Applicant was directly involved in the tr....
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....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 client with reference to any work related to clearance of cargo or baggage; that he should not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Customs House Agent which is sought or may be sought by the Collector; that he should ensure that all documents prepared or presented....
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.... 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 greater responsibility. The very prescription that one should be conversant with the various procedures including the offences under the Customs Act to act as a Custom House Agent would show that while acting as Custom House Agent, he should not be a cause for violation of those provisions. A CHA cannot be permitted to misuse his position as a CHA by taking advantage of his ac....
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....m 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 the issues are identical wherein the appellants deliberately, presented the documents to another CFS and obtained a fraudulent examination report. Further, we find that the Hon'ble Andhra Pradesh High Court in the case of CC, Customs Vs. H.B. Cargo Services (supra), where the Hon'ble High Court has set aside the Tribunal's order and upheld the revocation of CHA license. The relevant ....