AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 534
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....pected the Shipping Bill No.3245398, dated 26.08.2006 at the Chennai Air Cargo complex filed by the respondent/licensee on behalf of the Exporter M/s. India Lanka General Impex, Chennai and the consignee M/s. Quick Cargo (HK) Ltd., (iii) On such inspection, the Revenue found that, though the goods declared under the Shipping Bill was 22 sets of grinding stones and milling stones together with rods contained in 24 stainless steel cylinders of the grinder, on the detailed examination of the handles, it was found that, the handle had a cavity which was plastered and on removal of the plastered portion, a polythene bag containing white powder was found concealed. In all 10.565 Kgs of white coloured powder suspected to be "Ketamine Hydrochloride" were seized. (iv) Thereafter the said white powder was tested in the Laboratory and was declared that, it was "Ketamine Hydrochloride", which was a prohibited item. Therefore the Revenue initiated action against the exporter and also against the respondent/licensee. Initially the Customs Broker Licence of the respondent/licensee was suspended by order dated 02.03.2007 by the office of the Commissioner of Customs of Chennai Com....
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....order of imposing of penalty passed in Order-in- Original, dated 28.05.2012 was not in proportion with the proven charges / violations on the part of the respondent/licensee, the Revenue felt aggrieved over the said lenient view taken by the licensing Authority in not revoking the Customs Broker licence of the respondent and decided to prefer appeal against the Order-in-Original, dated 28.05.2012 before the CESTAT under Section 129A of the Customs Act, 1962. Accordingly such appeal was filed by the Revenue, which was decided by the CESTAT by the impugned order, dated 31.05.2018, whereby the CESTAT, only on the ground of jurisdiction / maintainability of the appeal, rejected the said appeal of the Revenue on the ground that under CHALR Regulations 2004, only the Customs Broker is entitled to prefer appeal against the order passed by the Licensing Authority, under Section 129A of the Customs Act and not an appeal by the Revenue, therefore on that ground alone, the appeal of the Revenue before the CESTAT was rejected through the impugned order. Assailing the said order, the present appeal has been preferred by the Revenue. 3. Since the appeal was rejected only on the groun....
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....ligible applicants and if there is any violation or default of the regulation itself, what shall be the corrective or punitive action to be taken against the erring Customs Broker Licencee, have been dealt with. 7. In this context, the Regulation 9 provides for grant of licence, which reads thus : "9. Grant of licence.- (1) The Commissioner of Customs shall on payment of a fee of Rs. 5,000/- grant a licence in Form B to an applicant who has passed the examination referred to in regulation 8. (2) The Customs House Agents who are granted licences under sub-regulation (1) shall be eligible to work in all Customs Stations within the country subject to intimation in Form C to the Commissioner of Customs of the concerned Customs Station where he intends to transact business. No separate licence shall be required in places where in addition to a Customs House handling imports by sea, there is also an International airport to handle imports by air, even if under the jurisdiction of a different Commissioner of Customs. (3) The Commissioner of Customs may reject an application for the grant of licence to act as Customs House Agent if the applicant is in....
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....d on application made by the licensee before the expiry of the validity of the licence and once such application is made for renewal, the licensing authority, on satisfaction of the performance of the licensee can renew the same for the further period of 10 years. Regulation 11 reads thus : "11. Period of validity of a licence.- (1) A licence granted under regulation 9 shall be valid for a period of ten years from the date of issue and shall be renewed from time to time in accordance with the procedure provided in sub-regulation (2). Provided that licence granted to a Customs House Agent, authorized under the Authorised Economic Operator Programme, shall be valid till such time the authorization granted to the Customs House Agent under the Authorised Economic Operator Programme is valid. (2) The Commissioner of Customs may, on application made by the licensee before the expiry of the validity of the licence under subregulation (1), renew the licence for a further period of ten years from the date of expiration of the original licence granted under regulation 9 or of the last renewal of such licence, as the case may be, if the performance of th....
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....eived from him in excess of Governmental or other charges payable in respect of the clearance of cargo or baggage on behalf of the client; (h) not procure or attempt to procure directly or indirectly, information from the Government records or other Government sources of any kind to which access is not granted by the proper officer; (i) not attempt to influence the conduct of any official of the Customs Station in any matter pending before such official or his subordinates by the use of threat, false accusation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing of value; (j) 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 Commissioner of Customs; (k) maintain records and accounts in such form and manner as may be directed from time to time by a Deputy Commissioner of Customs or Assistant Commissioner of Customs and submit them for inspection to the said Deputy Commissioner of Customs or Assistant Commissioner of Customs ....
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....eiture of part or whole of security, on any of the following grounds, namely :- (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 any where else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station." 13. Therefore the Commissioner of Customs, on proven charges against the licensee, either can revoke the license of the Customs House Agent as well as forfeiting whole or part of the security deposit or only order for forfeiture of part or whole of security deposit. Though such a discretion was given to the Commissioner of Customs, in a case where the Customs Broker Licensee violated several obligations on the part of the Customs House Agent, as has been contemplated under Regulation 13, whether a mere forfeiture of deposit of a sum of Rs. 25,000/- alone c....
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....dered a case for renewal of licence, under the Motor Vehicles Act, 1988 and held that renewal of licence means a new licence, granted by way of renewal. The Hon'ble Apex Court held that while considering an application for renewal, all the conditions required to be complied with, under the statutory provisions, rules or regulations, as the case may be, for grant of fresh licence and any other conditions, imposing performance of the conditions of licencee, have to be complied with. Procedure set out in CHALR, 2004, does not provide for any adjudication, either for grant of fresh licence or renewal. 34. In the case on hand, while considering the renewal application, the licencing authority has acted as an adjudicating authority. The need, according to him, was, whether the licencee, who had not renewed the licence, issued at Vizag, is entitled to get the licence issued by the Chennai Commissionerate, renewed? If there was any such pre-condition, in our view, he should be answered the issue administratively, but in the case on hand, the licencing authority, seemed to have taken a decision that the abovesaid question requires adjudication. In the light of Gajraj Singh'....
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....lation 22, which provides all discretion to the said authority to pass such orders as he deems fit. The word 'such orders as he deems fit' gives a wider discretion to the Commissioner of Customs to pass ultimate final order, after enquiring the matter and if any such order passed by the Commissioner of Customs against the Customs Broker is prejudicial to the interest of the Customs Broker, then he alone can prefer appeal as contemplated under subregulation 8 of Regulation 22 before the CESTAT under Section 129A of the Act and such facility is not given to the Revenue to prefer any appeal, since the Revenue has been specifically omitted to be mentioned in sub-regulation 8 of Regulation 22. 19. He would also urge that, if at all the makers of the Regulation, i.e., the Board, thought of providing an appeal to the the Revenue also, the words in sub-regulation 8 must be that, "any person aggrieved by any order passed under Regulation 20 or sub-regulation 7 of Regulation 22" which could have been employed with, instead, the words employed therein, i.e., at sub-regulation 8 is only "any Customs House Agent aggrieved by any decision or order passed under Regulation 20 or sub-reg....
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....nt that, whatever the illegality or unlawfulness or violations committed by the Customs Broker that would be taken lightly by imposing a mere penalty and at any cost, the licence would not be revoked. This would not be a deterrent to such kind of violators especially who makes serious violations causing serious set back, as the case in hand involves in attempting to smuggle prohibited or banned goods like the "Ketamine Hydrochloride". Therefore the learned counsel would submit that, the Revenue has got every right to prefer an appeal made against the Order-in-Original. 23. Learned counsel for the Revenue would also rely upon a decision of the Karnataka High Court at Bangalore in the matter of Cargomar v. Union of India, Ministry of Finance and others in W.P.No.15866 of 2016. 24. Hence the learned counsel for the Revenue would submit that, the appeal remedy since has not been specifically prohibited even under subregulation 8 of Regulation 22, for Revenue, such a prohibition cannot be imposed against the Revenue, as no party to any adjudicating proceedings can be rendered remediless against the order to be passed by such adjudicating authority in case such party is aggrieved o....
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....e case laws relied upon by the CHA are not relevant to the case. The Managing Director of the CHA Company himself admitted that he didn't have any authorisation from the exporters. The CHA didn't even know who the exporters were. Hence, the violation of Regulation 13(a) stands proved. The CHA in their written submissions had only discussed that not getting authorisation is not a grave offence to cancel the licence of the CHA and also blamed the officers for not verifying the authorisation. However, he had not denied that the fact that he had not obtained the authorisation. Moreover, the Managing Director of the CHA Company himself admitted that he has not even met the exporters, so no question of taking any authorisation from them. Hence, I find that the violation of the Regulation 13(a) stands sustained. b. With regard to the Regulation 13(b) of transacting business either personally or through an employee duly approved by Dy. Commissioner of Customs, it is revealed from the inquiry officer report that the Managing Director of the CHA Shri.K.Rajashekaran, in his statement had accepted that he has signed the blank Annexures and handed over the same to M/s.....
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.... either giving advice or wrong advice. The CHA cannot simply wash of the hands by saying that exporter was not given any advice to perform illegal activity. It is the duty of the CHA to at least meet the exporter and enquire about the advice to be given to clients. Here has not even met the exporter or verified the IEC Code. Hence, the allegation under Regulation 13(d) stands proved. d. Regarding the violation of 13(e) the Inquiry officer had stated that it is the responsibility of the CHA to verify the antecedents and reputation of the exporter before accepting the consignment handling work from them. If the CHA had exercised due diligence cast upon them under the Regulation 13(e) the exporter could not have made an attempt to export the banned goods in concealment. The CHA cannot shy away from the responsibilities casted upon them under the Regulation 13(e) by stating that examination of the goods is the officer's responsibility. In the instant case, as the appellant did not know the identity of the exporter and permitted their licence to be used for clearance of the export consignment of such exporters under a "contract of service", to which such exporters had no pr....
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....lation 11 states that, "If the performance of the licensee is found to be satisfactory with reference, inter alia, to the following: (a)........ (b) absence of instances of any complaints of misconduct including noncompliance of any of the obligations specified in Regulation 13". 34. Therefore even for a normal renewal of licence, after expiry of the term, the licensee must satisfy the licensing authority that, there is no complaints of misconduct including non-compliance of any of the obligation specified in Regulation 13. Therefore if any violation of Regulation 13 is noticed, then the licensee is not entitled to get the renewal of licence, even though such licensee has not been punished for such violation of Regulation 13. 35. From the reading of these regulations, we find that, the Board while making regulation, under Section 146(2) of the Customs Act, has made it clear that, certain obligations has to be scrupulously followed or to be fulfilled by the licensee as enumerated under Regulation 13 and if any violation is noticed, even though the licence is not revoked in between, at the time of renewal, that will have a bearing and such licensee would not b....
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.... by an aggrieved party. 43. In support of this view, we would like to quote a decision of the Karnataka High Court, which in fact was authored by one of us (Dr.VINEET KOTHARI, J). For the sake of ready reference, we quote the relevant paras of the said Judgment of the Karnataka High Court in the matter of Cargomar v. Union of India, Ministry of Finance and Ors., [MANU/KA/0473/2018] "18. The contention raised by the learned counsel for the petitioner that Regulation 21 provides for an appeal to the Customs Broker only in the limited contingency of suspension and cancellation of licence and not under any other contingencies based on the reading of Section 146 (2)(g) of the Act is rather misconceived and does not deserve to be accepted. The power to frame Rules given to the Board in the various fields enumerated in Clauses (a) to (g) of sub-Section (2) of Section 146 of the Act are not restrictive in any manner, but they provide for different fields for which Regulations can provide for. Unless the Regulation 21 quoted above itself was couched in a narrow and limited terms to provide for an appeal only against the suspension and cancellation of licence, the State could hav....
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....o) of Regulation 11 and as submitted at bar by the learned counsel for the Revenue. Clause 11 (e) inter alia enjoins upon the Customs Broker to 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. Therefore, the Customs Broker cannot completely disentangle himself or distance himself from the mis-declaration made on behalf of the importers or by the importers themselves. While working under these Regulations, he undoubtedly acts as an agent of the Importer and his acts bind the Importer as the Principal. The purposes of these Regulations are obviously to prevent evasion of custom duties and illegal activities and declarations to evade duties to be checked and various consequences in these Regulations have been provided for including "prohibition" from functioning, suspension of licence which is India-wide permission or even cancellation thereof. Regulation 23 does not in its own terms provide for any temporary or permanent prohibition. The said prohibition by the terms of Regulation 23 can continue even for an indefinite period. While the suspension and revoc....
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....he rival parties, assessee on the one hand, revenue on the other hand and record their own reasons in writing for taking a particular view of the matter on either side of the issues so that the Constitutional Courts have the benefit of the final orders passed by such Authorities created under the statute and are not called upon to decide the issues prematurely without the Authorities under the Act in a hierarchy of channels provided under the relevant statutes apply their mind and pass appropriate orders. 25. Once this Court comes to the conclusion as it had already laid down in the earlier case in the case of M/s. Capricorn Logistics Pvt. Ltd.(supra) that the impugned order under Regulation 23 is an appealable order before the CESTAT under Section 129-A of the Act read with Regulation 21, it is not considered appropriate to touch the merits of the case and deal with the same, lest it prejudices the case of either of the parties before the Tribunal. It appears that on account of ex-parte interim order granted in the present case by the cohttp:// ordinate bench on 23/03/2016 staying all further proceedings in pursuance of Annexure B which is the impugned order under Regulat....