M/S. Baid Organization Pvt.Ltd vs Commissioner Of Customs(Airport & ...

Appeal No.Cus.Ap.70017/13 (Arising out of Order-in-Original No.KOL/CUS/AIRPORT/ADMN/23/2012 dated 17.10.2012 passed by the Commissioner of Customs(Airport & Admn.), Kolkata.)

FOR APPROVAL AND SIGNATURE

HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL) HONBLE DR. I.P. LAL, MEMBER(TECHNICAL)

1. Whether Press Reporters may be allowed to see 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 Authorative report or not?

3. Whether Their Lordship wishes to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental Authorities?

M/s. Baid Organization Pvt.Ltd. Applicant (s)/Appellant (s)

Vs.

Commissioner of Customs(Airport & Admn.), Kolkata Respondent (s)

Appearance:

Shri R.K.Chowdhury, Shri B.N.Pal, Advocates for the Appellant(s) Shri S.P.Pal, Appraiser(A.R.) for the Revenue

CORAM:

Honble Dr. D.M. Misra, Member(Judicial) Honble Dr. I.P. Lal, Member(Technical)

Date of Hearing :- 10.02.2015 Date of Pronouncement :- 08.04.2015

ORDER NO.FO/A/75198/2015

Per Dr. I.P. Lal.

1. This Appeal is filed by the Appellant against the Order-in-Original No.KOL/CUS/AIRPORT/ADMN/23/2012 dated 17.10.2012 passed by the Commissioner of Customs(Airport & Admn.), Kolkata, wherein he has has revoked the CHA license of the appellant under Regulation 20(1) of CHALR 2004 and forfeited the full amount of security deposit furnished by the CHA.

2.1 Facts of the case are that an intelligence was collected by DRI that certain operators/importers are indulging in duty evasion by mis-declaring old car attracting higher rate of duty as new car chargeable to lower rate of duty. Further, the value and model of these imported vehicles were found to be mis-declared inasmuch as high end vehicles/SUV were imported in the guise of low end vehicles. Investigations conducted against some of the operators ravealed that bills of entry in 62 such cases were filed in Customs House, Kolkata by the CHA M/s.Baid Organisation (P) Ltd. at the behest of one Shri Suresh Halde, a resident of Thane(Maharashtra). In his statement dated 17.6.2009 Shri Halde stated that he was advised by one Shri Balu Patil, who suggested that they could make more money for customs clearance of the vehicles imported by Charanjit Singh and Rajesh Jethani. He stated that he was informed by Shri Charanjit Singh and Shri Rajesh Jethani that some such vehicles could be imported through Kolkata port and therefore he along with Shri Balu Patil visited Kolkata and happened to meet Shri Monoj Baid in the Kolkata Customs House running his business in the name of M/s.Baid Organisation (P) Ltd. He requested Monoj Baid to allow the use of his CHA license for import clearance of impugned vehicles through Kolkata port and offered Rs.7,000/- per job to which Shri Monoj Baid agreed. He admitted that these vehicles were imported on behalf of Shri Charanjit Singh. Shri Monoj Baid in his statement dated 23.7.2009 admitted that he allowed his license to be used by Shri Suresh Halde for the monetary consideration. It appeared that in the present case M/s.Baid Organisation (P) Ltd., the CHA had violated the provisions of Regulation 12, 13(a), 13(b), 13(d) and 13(e) of CHALR 2004. Consequently license of the CHA was suspended vide establishment order No.11/2010 dated 11.01.2010.

2.2 In the meantime the appellant filed a writ petition being WP No.61 of 2010 in the Honble High Court of Calcutta. In terms of an interim order dated 19.8.2010 in the said petition, the commissioner of customs(airport & admn.) allowed the CHA to carry on their CHA business till 16.01.2011 which was extended to 16.7.2011.

2.3 Show cause notice issued to M/s. Baid Organisation (P) Ltd. for revocation of licence and forfeiture of his security deposit for violation of the above-stated regulations which was adjudicated by commissioner of Customs (Airport & Admn.) vide order dated 15.07.2011. After considering the enquiry report submitted by the enquiry officer, various submissions made by the Appellant and facts of the case as per available record, he upheld the charges framed under Regulation 13(a), 13(d), 13(e) and 19(8) of CHALR, 2004. He revoked the license and forfeited the security deposit under regulation 20(1) of CHALR. On Appeal by the appellant CHA against the above order this Tribunal remanded the matter vide order dated 20.3.2012 to adjudicate the case afresh after considering whether the CHA has procured the proper authorization from the impugned importers. In the remand order dated 17.10.2012 the ld.Commissioner has dropped the above charges but upheld the charge of violation of Regulation 13(e) of CHALR, 2004. Consequently, he again revoked the licence and forfeited the security deposit. Being aggrieved present appeal is filed before this forum. The Revenue has not filed any appeal against the dropping of charges by the ld.Commissioner.

3. Ld.Advocate for the appellant assailed the order on the ground that although the adjudicating authority has upheld the charges of violation of Regulation 13(e), but no reasons are mentioned in the said order. He submits that Regulation 13(e) requires that the CHA shall impart to a client any information with reference to the clearance of the cargo, but the order of the Commissioner is silent on this issue as to which information was required to be imparted. He submits that all other charges have been dropped in this case except the charges on violation of regulation 13(e) of CHALR, 2004. It is the submission that in case of Sai Nath Clearance Agency vs. CC(General), Mumbai reported in 2011 (269 ELT 106(Tri.Mum), wherein out of the four charges, two have been proved by the respondent, this Tribunal held that continued operation of the commissioners order in such a case was not justified. He submits that in the present case, the CHAs licence was revoked on 15.7.2011 and since the then CHA is out of a job which is adversely affecting his livelihood. Under the circumstances the CHA has been sufficiently punished.

4. As per contra the ld.A.R. for the Revenue submitted that in para 31 of the impugned order dated 17.10.2012, the adjudicating authority has categorically observed that the CHA had filed 62 bills of entry for clearance of high end cars/SUVs for different importers. In all cases they received the import documents from one Shri Suresh Halde, a resident of Thane, (Maharashtra). But the CHA never tried to know under what circumstances the same person has been carrying the import documents for all importers and on none of the occasion they made any attempt to verify the genuineness of any importers and their imports. This shows absolute negligence on the part of the CHA resulting into smuggling of old high end cars. The ld.commissioner found this action of CHA to be in violation of provisions of regulation 13(e) of the CHALR, 2004. He submitted that the commissioner of customs is best placed to understand the importance of CHA in a customs area and therefore the CESTAT should not be swayed by considerations of mis-placed sympathy. In support he relied on the case law of Dhakhane & Co. Vs. CC(General), Mumbai  2014-TIOL-2274-CESTAT-MUM and the ratio laid down in case of H.B.Cargo Services  2011(268) ELT 448(AP).

5. Heard both sides and perused the records.

6.1 We find that in this case the licence has been revoked on the sole ground of violation of Regulation 13(e). The said provision reads as under:-

Regulation 13. Obligation of Customs House Agent  A Customs House Agent shall

(e) 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;

It is a case of Revenue that in all the 62 cases of imports the documents were given to the CHA by one Shri Halde, but the CHA failed to ascertain the genuineness of the importer in all these cases. This was considered to be a gross negligence and in violation of the provisions of Regulation 13(e) of CHALR. On the other hand according to Appellant, the adjudicating authority has not mentioned in his order any such information required to be imparted to the CHAs client.

6.2 We notice from the impugned order that the ld.commissioner has dropped the charges framed against the appellant CHA for violation of Regulation 13(a), 13(d) and 19(8) of the CHALR, 2004. These Regulations inter alia provide that the CHA shall obtain an authorization from his client; advise his client to comply with the provisions of the act and Regulation and exercise necessary supervision on conduct of his employee. The ld.Commissioner did not find any violation on the part of the CHA in the above matters. We also notice that under para 30 of the impugned order the ld.Commissioner observed that the CHA was not aware of the fraudulent attitude of the importers and the operators who engaged themselves in fraudulent import of high end cars/SUVs by mis-declaring the same as new vehicle. He has further recorded that the appellant CHA filed bills of entry as per import documents and during examination no adverse report received.

6.3 We find that prior to detection by the officers of DRI no irregularity was found in respect of the import of impugned vehicles. As such there was no occasion to impart any information to the CHAs clients by the said CHA as required under Regulation 13(e). Moreover, it is the categorical findings of the ld.Commissioner that the appellant CHA was totally unaware of the fraudulent activities of the operators/importers. Merely because the CHA could not doubt as to why on every occasion the import documents were brought to him by Shri Halde cannot be a sufficient ground for revocation of license.

6.4 As regards the contention of the ld.A.R. that the Tribunal should not interfere with the order of the ld.commissioner who is best placed to understand the importance of CHA in a customs area, we find that in case of H.B.Cargo Services, the gravity of the offence was serious and therefore the Honble High Court did not interfere with the order of punishment by revocation of licence. However in the present case revenue has failed to bring it to our notice, the seriousness of the offence on the part of the CHA and the Commissioner has dropped all the major charges against the Appellant and the Revenue has not challenged the said findings.

7. Out of four charges, one has been proved by the respondent but this alone is not enough for continued operation of the Commissioners order. The CHA has already suffered for over four years on account of revocation of license. In our view, at this length of time, the CHA license needs to be restored. However, for not acting diligently, the Commissioners order for forfeiture of security deposit has to be upheld.

8. In the result, the revocation of licence is set aside, but the forfeiture of security deposit is sustained. The appellant may be allowed to resume business as CHA in accordance with the CHALR subject to furnishing fresh security deposit. The appeal is accordingly disposed of.

(Pronounced in the open court on 08.04.2015)

(D.M.MISRA) (I.P.LAL) MEMBER(JUDICIAL) MEMBER(TECHNICAL) sm

7 Appeal No.Cus.Ap.70017/13