TaxTMI 
TaxTMI 
2016 (7) TMI 859
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....efore March 2012, the import of Glass Sheet and Aluminium coated mirror was in the name of M/s F.K. International. Total duty evasion in case of M/s Riya International is Rs. 1,96,658/-, whereas in case of M/s Apex Enterprises is Rs. 5,12,285/-. During investigation IEC user has accepted that undervaluation was done in case of import of glass sheet by M/s F.K. International as well. Duty yet to be quantified in the said case. Further, in another case duty of Rs. 35,48,409.96 was not paid on sewing machine needles imported by M/s Bombay Fashion vide Bill of Entry No. 6750589 dated 07/05/2012 which were cleared by M/s Parvath Shipping Agency. Hence total duty liability quantified in the three cases (M/s Apex Enterprises, Riya Enterprises & Bombay Fashion) as mentioned above is Rs. 42,57,352/-. Initial offence report from the Special Investigation and Intelligence Branch (Import), New Custom House, Mumbai vide letter F. No. SG/Misc-61/FN/2011-SIIB(I); SG/Inv-26/FN/2012-SIIB(I) dated 06/12/2012 incorporating the above and mentioning role of the CHA was received in this office on 06/12/2012 and further communication dated 14/12/2012 was received 18/12/2012. 3. The statement of Shri M....
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.... 7. Coming to a conclusion that the prima facie CHA has derelicted their duties, the licence was suspended and a charge sheet was issued and inquiry was conducted for failure to discharge obligation of CHA under Regulation no. 13(a), 13(d), 13(e), 13(n) and 13(o) of CHALR 2004. 8. Inquiry proceedings were conducted by inquiry officer. Appellant participated in the inquiry and cross examined persons. Inquiry officer held all the charges stand proven. Consequent to such inquiry report, the appellant filed a detailed written submission vide letter dated 02.01.2014 disputing the upholding of the charges. Adjudicating Authority after following due process of law revoked the CHA licence and also forfeited the security deposit. 9. Ld. Consultant appearing for the appellant submitted as under:- 9.1 The learned Counsel for the appellant urges that the IEC holders have not denied the fact that they were in the partnership with the said Rizwan Bhai and/or Z.A. Khan and have allowed the use of their IEC. So far the allegation of the CHA knowing that there is under-invoicing, has no legs to stand, as CHA filed the Bill of Entry based on the documents supplied to him by the impor....
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....ctly he had not obtained authorization letter, which is in violation of the provisions of Regulations 13(a) of CHALR, 2004. The appellant submits that the said findings mean that the appellant had obtained the authorization letter but through Shri Rizwanbhai. In other words, the authority letters were in existence based on which the appellant had filed the Bills of Entry. While holding that it is no one's case that Custom Broker was not in possession of any authorization documents and accepting that the documents were obtained from Shri Rizwanbhai, the Commissioner has failed to appreciate that when both the authority letters were received by the appellant, the charge of violation of Regulation 13(a) cannot be said to be proved. As per provisions of Regulation 13(a) A Custom House Agent shall obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as Customs House Agent and produce such authorization whenever required by the Dy. Commissioner of Customs or the Assistant Commissioner of Customs. 9.4. The appellant further submits that the findings of the Commissioner that the appellant is liable for contravention of....
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....Departmental Representative would submit that the issue is not as simple as the ld. Consultant has put up. It is his submission that the main appellant was very well aware of the fact that imports undertaken by person who was holder of IEC; that the main appellant has not conducted any background checks before undertaking the clearance work; that due to such negligence there is a loss of exchequer which was noticed due to alertness of the Departmental authorities. It is his submission that action under CHALR has been initiated against the appellant as his action is found wanting as a responsible CHA. 11. We have considered the submissions made at length by both sides and perused the records. The CHA licence of the appellant is revoked and security deposit is forfeited by the Adjudicating Authority based on the inquiry report filed by the inquiry officers against various charges. 12. We proceed to record our findings in this case change wise, hence we reproduce the various violations as alleged against appellant as per Regulations of CHALR. 11(i) Article of Charge - I: Regulation 13(a) of CHALR 2004 states that A Customs House Agent shall obtain an authorisation from ....
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....concern which is not permissible even if he were a Power of Attorney holder. Moreover in view of the admitted and established fact that IEC holders had no clue about the imports being made in the names of their concerns, it is clear that they could not have authorized the CHA to carry out clearance of goods of which they themselves had no idea. The admissions make it abundantly clear that the IEC holders were dummies and the real imports were effected by Shri Zeeshan Anwar. A Power of Attorney cannot eliminate the requirement for a genuine authorization. The misuse of IEC by a person other than the IEC holder cannot be legitimized merely on the ground of a Power of Attorney in favour of the IEC user. 20(vi). I also note that Shri Zeeshan Khan has admitted in his statement dt 23.05.12 that due to some legal problems he cannot start a company in his name and hence he is importing goods in the name of different companies. Shri Zeeshan Khan has not made any mention of a Power of Attorney. It is pertinent to note that neither Shri Zeeshan Khan nor any of the IEC holders nor the CHA have ever alluded to the existence of a Power of Attorney in any of their statements recorded und....
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....eeshan Anwar Khan for the clearance of several consignments over a period of a few months. Any person of ordinary prudence will know that when dummy IECs are being misused7 by a third party then such misuse is usually for effecting imports in contravention of the rules and I or to evade Customs duty. A genuine importer who does not intend to evade the Law does not need to effect imports by using IECs of others. Under the circumstances, the fact that a CHA who is admittedly in business for over 15 years, should have properly scrutinized the import documents or exercise necessary caution and met and adviced the IEC holders. However the CHA did not bother to interact with the IEC holders and also did not think it fit to inform Customs during this entire period when the impugned imports took place. This is a clear evidence of the CHA's failure to adhere to the stipulations of Regulation 13(d) of CHALR, 2004." On this count also the findings of Adjudicating Authority are mis directed as it is on record that there was no specific allegation of non-compliance of the provisions of the Act i.e. Customs Act, 1962. The main appellant had taken care to enquire about the genuineness of t....
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....he findings of Adjudicating Authority are assumptions and presumptions, as he expects the CHA to get alerted by the shop and establishment Act licences. In our view, these findings do not instill any confidence in us that there was any contravention by CHA as regards this regulation. 17. Regulations 13(n) of CHALR 2004 On this point we again find that Adjudicating Authority has in his finding at para 23(i) to 23(iv) brought on record that main appellant has not discharged his duties as a CHA with utmost speed and efficiency and without avoidable delay in respect of the consignment that were cleared. It seems that purpose of this regulation is no understood by the lower authorities in its true sense. To our mind this Regulation expects the CHA to assist the customs authorities for clearance of the goods, and cannot be held against the appellant for not coming for recording of the statements. In our view, on this point also the Adjudicating Authority has misdirected the findings. 18. Regulations 13(o) of CHALR 2004 On this point, the Adjudicating Authority has held against the appellant as under: "24(vii) Regulation 13(o) of CHALR, 2004 lays a very onerous respon....