Baraskar Brothers vs Commissioner Of Customs(General), ...

[Arising out of Order-in-Original No 46/2014/CAC/CC(G)/PKA/CBS dated 04/04/2014 passed by the Commissioner of Customs (General),Mumbai]

For approval and signature:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

Baraskar Brothers : Appellant

VS

Commissioner of Customs(General), Mumbai : Respondent

Appearance

Shri Anil Balani , Advocate for the Appellant Shri M. K. Sarangi, J.C., (AR) for the Respondent

CORAM:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 28/08/2015 Date of decision: / /2015

ORDER NO.

Per : Ramesh Nair

The appeal is directed against Order-in-Original No 46/2014/CAC/CC(G)/PKA/CBS dated 04/04/2014 passed by the Commissioner of Customs (General), CHA Section (P & D), New Custom House, Ballard Estate, Mumbai, wherein the Ld. Commissioner ordered the revocation of CHA License of the appellant and also forfeited of entire amount of security deposit made by the appellant.

2. The fact of the case is that the appellant has a regular CHA License under Regulation 10(1) of CHALR, 1984 (then Regulation 9(1) of CHALR, 2004, now Regulation 7(1) of CBLR, 2013) in Mumbai Customs under a partnership firm with two partners, viz. Shri Prakash Anant Baraskar and Shri Vijay Anant Baraskar. The appellant filed a Bill of Entry No. 672466 dated 16/01/2008 for the imported goods in container No. BAXU 2598677 together with container No. BAXU 5004995 and BAXU 5108303 on behalf of importer M/s Laxmi Enterprises, Mulund (West), Mumbai, the items in the Bill of Entry declared were assorted bath soaps, shampoo/conditioner; the overseas supplier was Al Miridya General Trading LLC, Ajaman, UAE, but the country of origin of the goods was declared as China and the declared value (CIF) was $5250 (Rs.3,56,875/-) and duty amount of Rs.5,16,592/- with respect to the said consignment was already paid by the importer. The intelligence received by Nhava Sheva Preventive Unit (NSPU), Rummaging and Intelligence Division, Jawaharlal Nehru Custom House, Mumbai Customs Zone-II that in the Speedy CFS, a smell of garlic emanating from container No. BAXU 2598677, located at the import yard of Speedy CFS, Jawaharlal Nehru Port, Nhava Sheva was felt.

The smell of garlic from the container gave suspicion regarding the truth of items declared by importer. When enquiry was made with Shri Vijay Anant Baraskar, parter of M/s Baraskar Brothers, Shri Baraskar denied having any knowledge of importer M/s Laxmi Enterprises or import of cosmetics under the said Bill of Entry No. 672466 dated 16/01/2008. On the same day (24/01/2008) Shri Vijay Anant Baraskar submitted a letter to NSPU office informing that the said Bill of Entry No. 672466 dated 16/01/2008 was filed by Shri Anish Sachde, one of the employee of his firm M/s Baraskar Brothers (holder of category-II Customs Pass with Cardex No. S-2778) without his knowledge. From further enquiries, it was revealed that no firm by name M/s Laxmi Enterprises (IEC No. 0303047798) existed at the given address of the said importer at 116/86, Hindustan Chowk, Mulund Colony, Mulund (West), Mumbai-400080 and no person by name Amit B. Balmukund Agarwal (the director of the said importer firm) resides at the given address. Even after keeping a discreet watch to find out the actual person interested in clearing the consignment, no one came forward to clear the said goods.

Shri Vijay Anant Baraskar was unable to contact Shri Anish Sachde, he submitted the duplicate copy of Bill of Entry No. 672466 dated 16/01/2008 and requested that the goods covered under the said Bill of Entry No. 672466 be examined. The goods were examined under Panchanama dated 31/01/2008 and 01/02/2008 in the presence of Shri Vijay Anant Baraskar. It was found that in each of the said three containers, cartons containing garlic were concealed behind stacks of carton containing assorted bath soap and shampoo/conditioner. Of total number of 5731 cartons found, 4890 cartons contained white garlic (each carton containing 10kgs, total weight 48.9 Metric tons) while only 842 cartons contain assorted bath soap, shampoo/conditioner i.e. 85% cargo consisting of garlic. The cartons of garlic round sticker inscribed with what appeared to be Chinese characters was affixed. The goods were seized under a panchanama dated 31/01/2008 and 01/02/2008 and representative samples were drawn which were forwarded to the Regional Plant Quarantine Department and Public Health Department for testing. The department vide the letter dated 05/02/2008 informed that the samples of white garlic were infected with a pest of quarantine significance, i.e. fungus Embellisai al 11; the said letter further informed that import of garlic from China was suspended by the Ministry of Agriculture, Government of India in view of risk of spreading of the said pest found in Chinese garlic; and it was recommended that the consignment of garlic be destroyed by burning or deported to the exporting country.

The Public Health Department of Municipal Corporation of Greater Mumbai through their report dated 10/02/2008 informed that the samples of white garlic were unfit for human consumption. It was found that the value of seized 48.9 metric tons white garlic (4890 cartons) and 842 cartons of assorted bath soap, shampoo/conditioner was ascertained to be Rs.78,24,000/- and Rs.7,20,900/- respectively.

3. In view of the above undisputed offence, enquiry proceeding was initiated against the appellant. Accordingly summons to Shri Vijay Anant Baraskar were issued and his statement was recorded under Section 108 of the Customs Act, 1962, wherein Shri Baraskar shown complete unawareness of the entire transaction. He stated that clearance job of goods of M/s Laxmi Enterprises was looked after by one of his employee Shri Anish Sachde. After the aforesaid case detected, he stated that he does not know any firm by the name of M/s Laxmi Enterprises and he never met and spoken to the proprietor/director of M/s Laxmi Enterprises. On question regarding signing of check list pertaining to the Bill of Entry No. 672466 dated 16/01/2008 of M/s Laxmi Enterprises, he stated that he did not know who signed the said check list. It was pointed out to Shri Vijay Anant Baraskar that earlier two consignments under B.o.E. Nos. 662454 and 662447 both dated 09/01/2008, of Laxmi Enterprises were also cleared by this firm. Shri Baraskar stated that he has no knowledge about this transaction and the same was not recorded in his firms job register. He stated that Shri Anish Sachde must his job without informing him. He stated that Shri Anish Sachde must be paid the amount of Rs. 5,16,592/- in respect of Bill of Entry No. 672466 dated 16/01/2008 after getting pay order from the importer. On further enquiry of primary document Appendix A pertaining to Bill of Entry No. 672466 dated 16/01/2008 of M/s Laxmi Enterprises were checked and found that Appendix A form and check list bore the stamp of CHA 11/97 M/s Baraskar Brothers, the name, signature and cardex number is S-2778 of Shri Anish H. Sachde was seen at the foot of the form in place of the authorized signatory of Baraskar Brothers. He said form was countersigned by Shri Vijay Anant Baraskar, partner of M/s Baraskar Brothers, on behalf of the importer/authorized CHA. Further the name, signature and cardex number S-2778 of Shri Anish Sachde was seen at the designated place of this checklist.

4. On the above fact which is contrary to the statement by Shri Baraskar, further statement of Shri Vijay Anant Baraskar was recorded on 23/01/2009 under Section 108 of the Customs Act, 1962. After showing him, Appendix A, i.e. format for declaration at service centre for data entry in respect of BoE No. 672466 dated 16/01/2008 which was bearing his signature, name and seal of his company on last page, he agreed that the signature was his and he has signed the said documents. He also stated that he had signed the said documents as per the say of Shri Anish Sachde to whom he has allowed to use his license with mutual understanding. He was getting Rs. 2000/- for every import job on his licence from Shri Anish Sachde.

5. In view of the above primafacie involvement of M/s Baraskar Brothers in the alleged smuggling of garlic, in the independent proceeding under CHALR, 2004, the articles of charges were framed where under it was proposed that the Appellant or CHA is primafacie failed in discharging their obligation as Customs Broker as per Regulations 12, 13(a), 13(d), 13(e), 13(k), 13(n) & 19(8) of CHALR, 2004. On the inquiry, the inquiry officer submitted his report vide letter dated 31/01/2014, wherein the seven charges under Regulations 12, 13(a), 13(d), 13(e), 13(k), 13(n) & 19(8) of CHALR, 2004 have been proved. The Appellant countered the charges and in their written submission submitted that there is no contribution on their part, as they have no knowledge about the offence done by their employees. It was not possible for the Appellant, due to frequent travelling, to supervise each and every clearance, they have believed their employees, hence they cannot be held responsible for the offence, if any, committed by their employees.

6. The Ld. Commissioner after personal hearing and considering the defense submission of the Appellant came to conclusion that CHA is guilty of violation of Regulations 12 and sub-regulations (a), (d), (e), (k) & (n) of Regulation 13 and sub-regulation (8) of Regulation 19 of CHALR, 2004 (now Regulation 10 and sub-regulations (a), (d), (e), (k) & (n) of Regulation 11 and sub-regulation (9) of Regulation 17 of CBLR, 2013). In a case involving subletting of CHA license and smuggling of prohibited goods which make it incumbent upon the CHA to receive most regress punishment accordingly ordered for revocation of CHA license and forfeited the security deposit vide the impugned order; therefore the Appellant is before us.

7. Shri Anil Balani, Ld. Counsel for the appellant submits that the entire proceeding of inquiry suspension and revocation of it is time barred. He submits that the mis-declaration was detected in January 2008 and the suspension of the licence was ordered in October 2012. The inquiry proceeding were completed in sixteen months as against statutory time limit of nine months. Further the proceeding is time bar and on that ground, revocation of licence could not have been ordered. It is his submission that whatsoever offence of mis-declaration, it was committed by the importer and for the offence on the part of the importer CHA cannot be penalized as the appellant has no role in the mis-declaration. He submits that Ld. Commissioner erred in holding that Anish Sachde was allowed to use the CHA license which was on the basis of statements recorded under Section 108. The same ought to have been discarded and reliance should have been placed on oral depositions of Anish Sachde and Vijay Anant Baraskar recorded in the course of inquiry. He submits that Ld. Commissioners reliance on the judgment of Santon Shipping Service and Ashiana Cargo Services which is distinguishable on facts, as there is no contravention of Regulations of CHALR 2004, the Ld.

Commissioner failed to appreciate that Regulation 13(a) could be invoked only if there is a complaint by an importer that the appellant was acting without authority. In the instant case, no one has made any such complaint against the appellant. The IEC holder was a friend of Anish Sachde, therefore the appellant cannot be implicated. There is no violation of Regulation 13(d) as the CHA does not have to personally meet the importer. There was no reason to advise the importer. The charge under Regulation 13(e) was also wrongly proved in as much as the Commissioner has admitted that in fact Anish Sachde was an employee of the appellant, but he was pretending to be the CHA before the importer. The finding contradicts the earlier findings that Anish Sachde has CHA licence, and Anish Sachde was the actual importer. The documents were signed by the employee of Baraskar Brothers as Shri Vijay Baraskar was travelling during the relevant period. Hence there is no violation of Regulation 13(k). No inefficiency was established in the inquiry proceeding on the part of the appellant, therefore Regulation 11(h) was not contravened.

The appellant had exercised supervision on all its employees and had cooperated with department and assisted in the seizure of garlic. Hence, charge under Regulation 19(8) is not established. He submits that the licence stands suspended since 2008 and the appellant has already suffered sufficient punishment. On this ground, the Commissioner should not have revoked the licence in the light of following judgments:-

(1) Ajay Clearing Enterprises  2008 (228) ELT 297 (Tri.) (2) Smita International  2004 (167) ELT 219 (Tri.) (3) Trans Shipping Service  2004 (163) ELT 484 (Tri.) (4) Sainath Clearing Agency  2011 (269) ELT 106 (Tri.) (5) K.S. Chhaya & Co.  2011 (265) ELT 65 (Tri.)  upheld by the Honble Gujarat High Court  2011 (272) ELT 180 (Guj.) (6) Mhatre & Sons  2009 (241) ELT 401 (Tri. Mum) He also submits that the impugned order is contrary to the law laid down by the Honble Delhi High Court in the case of Ashiana Cargo Services reported in 2014 (302) ELT 161 (Del.).

8. Shri M.K. Sarangi, Ld. Joint Commissioner (AR) appearing on behalf of the Respondent reiterates the findings of the impugned order. He submits that the Ld. Commissioner has given detailed findings regarding the time period taken for complete the proceeding wherein it found that there is no delay on the part of the department; however the appellant himself has taken lot of time for filing defense reply and making his submission, whereas the department was within the time limit. He further submits that even though there is delay due to various reasons, the proceeding of revocation of license cannot be vitiated on time bar as the limitation provided under the Regulations is directory and not mandatory. He relied on judgment of Mhatre & Sons  2009 (241) ELT 401 (Tri. Mum). He also placed reliance on the judgment of this Tribunal in the case of Unison Clearing Pvt Ltd Vs Commr of Customs (Gen), Mumbai  2015-TIOL-1253-CESTAT-MUM. As regard merit, he submits that from the entire inquiry and the facts of the case, it is clear that the appellant was well aware and also involved in the offence of illegal import of prohibited goods i.e. garlic by mis-declaring the same. He submits that the appellant has sublet the license to one of his employee Shri Anish Sachde and admittedly getting the payment their against. It is admitted fact that the appellant knowingly the offence, signed the documents, therefore the Ld. Commissioner has rightly revoked the licence holding that various charges on the basis of the various regulations which were proved against the appellant. He further submits that the appellant is an habitual offender in as much as this Tribunal in their own case M/s Baraskar Brothers Vs Commr of Customs (Gen), Mum  2013 (294) ELT 415 (Tri.- Mum) has though allowed the appeal but the appellant was not exonerated from the charges leveled against them. He submits that the appellant does not deserve for any leniency as despite punishment given in the earlier occasion, the appellant indulged into serious offence of smuggling of garlic.

9. We have carefully considered the submissions made by both the sides.

10. As regard the defence made by the appellant that the proceeding is time bar, we find that the Ld. Commissioner in the impugned order has correctly dealt the time bar aspect and came to conclusion that there is delay on the part of the appellant in proceeding. However, the department has completed the proceeding in reasonable time depending on the circumstances. Moreover, in the case of Mhatre & Sons  2009 (241) ELT 401 (Tri. Mum) and this Tribunal judgment in the case of Unison Clearing Pvt Ltd Vs Commr of Customs (Gen), Mumbai  2015-TIOL-1253-CESTAT-MUM , it was held that only due to delay in various time limitation in the proceeding, the action of revocation cannot be held illegal. The time limitation provided in Regulations is directory and not mandatory. In view of this position, we are the view that the proceeding of revocation of appellants CHA licence is not time bar. As regard merit of the case, we find that the importer has illegally imported garlic by concealing the same under the consignment of bath soap, shampoo/conditioner. Hence the smuggling of garlic has been established and there is no dispute on the said offence. The appellant has initially taken stand that he has no knowledge about the said transaction and the same was not recorded in his firms job register. He stated that his employee Shri Anish Sachde must have done a job without informing him. In further inquiry the appellant accepted that the Appendix A declaration in respect of relevant Bill of Entry was bearing his signature, name and seal of his company and he agreed that the signature was his and he signed the documents. He has also admitted that he allowed Shri Anish Sachde to use his license for which he was getting Rs. 2000/- for every import job from Anish Sachde.

10.1 We find that with the above admitted act, the appellant violated various Regulations which were held to have been proved in the proceeding by the Adjudicating Authority. It was also observed that the appellant has committed the offence earlier also as noticed from the judgment in the appellants own case M/s Baraskar Brothers Vs Commr of Customs (supra). The plea of the appellant that if in offence is committed; it is by Shri Anish Sachde who is the employee of the appellant. We do not find any force in this argument for the reason that even if the offence is committed by employee but since it was authorized by the appellant to his employee, it is the appellant who is responsible for offence committed by his employee.

10.2 As regard various judgments cited by the counsel on the issue that once the CHA has been punished due to suspension of licence considering the suspension punishment, revocation should be set aside. We are not impressed with this submission for the reason that the appellant is admittedly an habitual offender, therefore in our view such habitual offender should not be allowed to work as CHA. Therefore, in the facts of the case, the ratio of the judgments relied upon by the counsel in this regard are not applicable. In view of our discussion, we are of the considered view that the impugned order is legal and proper, which does not require any interference. The impugned order is upheld and the appeal is dismissed.

(Order pronounced in court on __________)

P.S. Pruthi Member (Technical) Ramesh Nair Member (Judicial)

saifi

13 Appeal No. C/88223/14-Mum