M/S. Jepson & Co vs Commissioner Of Customs (General), ...

(Arising out of Order-in-Original No. 32/CAC/CC(G)/PKA/2012-13 dated 04.03.2013 passed by the Commissioner of Customs (General ) Mumbai )

For approval and signature:

Honble Mr. Anil Choudhary, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)

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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 authoritative report or not?

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

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

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M/s. Jepson & Co., : Appellant

VS

Commissioner of Customs (General), Mumbai : Respondent

Appearance

Shri Rajendrakumar Advocate for Appellant

Shri Chatru Singh, Assistant Commissioner (A.R) for respondent

CORAM:

Mr. Anil Choudhary, Member (Judicial) Mr. P.S. Pruthi, Member (Technical)

Date of hearing : 12/03/2015 Date of decision : /2015

ORDER NO.

Per : P.S. Pruthi

This appeal is directed against order No. 32/CAS/CC/G/PKA/2012-13 dt. 4.3.2013 vide which the Commissioner of Customs Mumbai revoked the CHA License of M/s. Jepson & co., the appellant, and ordered forfeiture of the entire amount of security deposit of the Company.

2. The facts are that one car was imported under TR Rules in the name of Shri Chennapully Bappu at Mumbai. As the conditions under which the car could be imported vide Public Notice No. 3/97 dt. 31.3.1997 were violated, the car not being in possession for more than one year, a case was booked against the importer and adjudicated on 18.03.2000. The car was confiscated but released on payment of redemption fine and penalty. From the records it appeared that that the vehicle was cleared through Customs subsequent to clearance of unaccompanied baggage which was cleared in the name of Shri Chennapully Bappu. The delivery of the car was taken by the CHA M/s. Jepson & Co. Later, on information that the import and clearance of the car took place on the basis of bogus import and travel documents , the statement of Shri Chennapully Bappu was recorded by Central Excise authorities in Kerala. Shri Bappu denied the import of the car or having signed any import documents. Shri Salim Patel partner of the CHA, the appellant, submitted the Passport of Shri C.Bappu and boarding pass of Oman Airways indicating the date of arrival of Shri Bappu as 28.9.1999 by Flight No. WV8000 at CST Airport Mumbai .

However, immigration authorities confirmed that no person by name Shri Bappu arrived on 28.9.1999; neither was there any such flight on 28.9.1999. During enquiries by Customs, Shri Salim Patel stated that Shri Bappu came to his office with one Shri Ebu and handed over all relevant documents such as Original Passport, Original B/L, Vehicle Export Certificate, Draft for payment of duty and fine. Shri Salim Patel admitted that the signatures of the importer on the application for demand draft and on the delivery challan which was used for taking delivery of the vehicle, were not the same. But Shri Bappu, in his statement before Central Excise authorities, Kerala expressed ignorance about the whole matter , denied knowledge about the Boarding Pass and also denied any knowledge about Shri Salim or Shri Ebu. Shri Salim Patel could neither inform Customs about the whereabouts of the car or Shri Ebu. It appeared that he took delivery of the car, arranged its temporary registration with Mumbai RTO and arranged for its transfer to Kerala. However Assistant Commissioner Trichur Kerala intimated that no such vehicle was registered there and also that Shri Bappu expired on 16.6.2002.

It appeared that the appellant had conspired to prepare bogus documents to import and clear the said car through Customs. Therefore, the appellant was charged for violating Regulations 14 (a), 14(d) and 14 (l) of the Custom House Agent Licensing Regulations ( CHALR )1984. Regulation 14(a) was invoked as the appellant did not obtain proper authorization from the importer for filing documents for the clearance of the car. Regulation 14(d) was invoked as the appellant CHA failed to give proper guidance to his client. Regulation 14(l) was invoked as the documents relating to Customs clearance were not presented properly to the Customs. The inquiry officer concluded that the articles of charge for violation of Regulations 14(a), 14(d) and 14 (l) stand proved. After following the procedure laid down in Regulation 22, the Commissioner vide his Order No. 32/CAC/CCG/PKA/2012-13 dt, 4.3.2013 ordered the revocation of the appellants License and also ordered forfeiture of the entire amount of security deposit.

3. Heard both sides.

4. The case of the appellant is that they had obtained a proper authority letter for clearance of the car and the car was released after clearance of unaccompanied baggage of the same passenger through another CHA which has been held legal. They relied on Bombay High Court Order dt. 28.4.2006 which dismissed the appeal of Customs against CESTAT Order in the case of VB Bhatia & Co. Vs. Commissioner 2006 (200) ELT 150 (Tri.Mum). The Tribunal had in that case held that CHA cannot be held responsible for forged end use certificates and other fabricated documents obtained by the importer without their knowledge. The Tribunal also held that the assessee was not responsible for the acts of their employees.

4.1 The Ld. Counsel contended that the passport had never been made available and produced during the inquiry to indicate whether the passenger had arrived on the said date. The Ld. Counsel also stated that the application for demand draft was neither in the list of relied upon documents nor a copy has been submitted or shown in the inquiry proceedings, and therefore the inquiry officer and presenting officer have not transferred the burden of proof on the applicant to hold that the signatures of the importer on the two documents are different. It was also contended that no cross examination of witnesses was allowed. Further that the signature of the importer on the documents are in Malayalam and the Examiner of Documents was expert whose opinion was sought has not given any definite opinion on whether the signatures are forged for want of original documents, specimen signatures and natural signatures. It was also submitted that the original statements of the importer were not furnished to the appellants for inspection and the statement dt. 26.2.2001 which has been relied upon by the inquiry officer and the adjudicating authority has not been part of the inquiry proceedings. Even the copy of the letter dt. 31.8.2000 of Oman Airways on which the department has relied as proof that the passenger did not arrive has not been made available to the appellant. They were never given a copy of the investigation report relied upon by the inquiry officer. As regards non presentation of documents and want of cross examination of witnesses during inquiry proceedings, except statements of two officers who recorded statements of Shri Bappu, they relied on the Apex Court judgment in the case of Arya Bhushan Bhandar Vs. UOI 2002 (143) ELT 25 (SC) to support their stand on violation of principles of natural justice.

4.2 The Ld. Counsel stated that their contentions regarding non-furnishing of crucial documents relied upon by the inquiry officer which were not submitted along with the articles of charge nor shown have not been discussed by the adjudicating authority. It is a matter of record that the hearing took place on 10.8.2007 but the impugned order was passed in 4.3.2013. According to the Ld. Counsel, the inquiry pertains to October 2004 and their License expired on 31.12.2006. It was renewed upto 31.12.2007 and thereafter it was not renewed and they are suffering since then.

5. The Ld. AR appearing for Revenue drew our attention to the impugned order where it is stated that Shri Bappu in his statement dt. 26.2.2001 denied having known the Customs House Agent Shri Salim nor had he signed the documents shown to him. He also pointed out that Shri Salim in his statement on 11.9.2001 could not recognize the person in the photograph attached to bank account opening application in the name of Shri Bappu. Shri Salim in his statement on 4.1.2001 admitted that Shri Bappu was not present at the time of delivery of the car from the docks but he was present in his (Shri Salim) office when he took delivery of the car and signed the delivery challan. The Ld. AR also recalled the statement of Shri Bappu on 22.9.2000 in which Shri Bappu stated that he had given the passport to PKM Travels at the time of arrival at Bombay and he had not received the passport back.

6. We have gone through the facts and the submissions made by both sides. In view of the statements of Shri Bappu recorded by the Central Excise authorities it does appear that the import of the car may have been manipulated on the basis of forged documents and the appellant did not make adequate enquiries to verify the genuineness of the importer. But strangely the investigations are flawed and the inquiry proceedings are not in consonance with law. The adjudicating authority holds that the CHA is responsible for violation of Regulation 14(a) for not having a proper authorization because the documents, namely, the copies of boarding pass and passport produced by Shri Patel turned out to be fabricated. However we find that the allegation of fabrication of these documents is based on the letter of Oman Airways and immigration authorities. But these letters have not been given to the appellant in the inquiry proceedings. Even the passport which is the most reliable piece of evidence to prove the travel date is not included in the list of relied upon documents. The adjudicating authority has based his conclusion regarding violation of Regulations 14 (d) and 14 (l) also on the same facts and held that the appellant did not verify the credentials of the importer which led to filing of bill of entry in the name of a bogus importer. However, Shri Salim in his statement on 8.1.2001 stated that the vehicle was delivered to Shri Bappu in his office after clearance from Customs and the delivery challan was duly signed by Shri Bappu. The shortcomings in the conduct of the inquiry proceedings is also reflected in the opinion dt.19.3.2009 of the Assistant State Examiner of Documents who stated that:

I have carefully and thoroughly examined the documents with scientific aid.

It has not been possible to express an definite opinion as regards identify or other wise of the red-enclosed Xerox signatures at Exs. Q-1 to Q-4 with Xerox writings at Exs. N-1 to N-4 for want of original documents, specimen signatures and natural signatures for the purpose of scientific examination. Thus it is clear that the basic protocol to verify the genuineness of the signature of Shri Bappu was not followed. Therefore, it is not conclusively proved that the signature of Shri Bappu on the delivery challan and the application for making demand draft are not the same. The Commissioner has not even referred to the Declaration signed by Shri Bappu and addressed to the AC Customs for the import of the car. This declaration shown by the Ld Counsel has not been made a part of the inquiry proceedings for reasons unknown. Therefore it cannot be said that the violation of Reg 14(a) is proved conclusively.

6.1 Shri Bappu expired in 2006, but his cross examination before he expired was not done. That the inquiry was not conducted in accordance with principles of natural justice is also evidenced by the fact that an important statement of Shri Bappu recorded on 26.6.2001 and referred to in the adjudication Order is not a relied upon document as per the inquiry officers report of June 2006 (Annexure III & IV of relied upon documents). On the other hand, the statements recorded on 22.09.2000, 09.06.2000 and 14.03.2000 which are relied upon documents as per Ann III and Ann IV have not been provided in the Inquiry proceedings. Thus, the inquiry proceedings are totally vitiated. We agree with the Ld. Counsel that the adjudicating authority has failed to ensure conduct of a proper inquiry and also failed to pass a well reasoned order. He has completely ignored the contentions of the appellant and his Order, therefore, is not a speaking Order. There are various other aspects of the inquiry which indicate that the proceedings were not conducted in accordance with principles of natural justice. For instance the letters of Oman Airways which states that there was no Flight on 28.9.1999 was not provided to the appellant. All these relevant issues pertaining to the conduct of a fair and impartial inquiry were not even referred to by the adjudicating authority in his discussion. We are therefore not convinced by the order revoking the License. We are of the view that remanding the matter for a judicious inquiry will not serve any purpose because the main witness in whose name the car was imported died many years ago. Although the appellant has not been very diligent in following the Regulations in letter and spirit, we also note that the license has remained inoperative after 2007. Therefore, in the face of an improper inquiry as well as the fact that the license has remained in operative for 7 years, we are of the view that the adequate punishment has already been undergone by the appellant.

7. Accordingly, we order that the License be restored immediately. However the security deposit is ordered to be forfeited.

8. Appeal is disposed of in above terms.

(Pronounced in court on 2015)

(Anil Choudhary) Member (Judicial)

(P. S. Pruthi) Member (Technical)

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