Sevenways Shipping Services vs Commissioner Of Customs, (Imports)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.C/188/2012

[Arising out of Order-in-Original No.19243/2012 dt. 9.8.2012 passed by the Commissioner of Customs (Seaport-Import), Chennai]

Sevenways Shipping Services Appellant

Versus

Commissioner of Customs, (Imports) Chennai Respondent

Appearance:

Dr. S. Krishnanandh, Advocate For the Appellant

Ms. Indira Sisupal, AC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 28.5.2015

FINAL ORDER No.40877/2015

Per R. Periasami

This is an appeal filed by appellant-CHA against the order of Commissioner of Customs, Chennai suspending the CHA licence.

2. The brief facts of the case is that based on intelligence by DRI, it was alleged that appellant-CHA was found to be involved in certain illegal baggage clearances at Chennai Seaport; that the subject container contained goods belonged to several persons whereas the baggage declaration was filed in the name of one single passenger name Mohamed Jakkiriya Mohamed Idris in order to mislead and thereby evade applicable duty, fine and penalty. Statements were recorded from authorized signatory of appellant. After due investigations, the CHA licence was suspended on 12.7.2012 under Regulation 20 (2) of CHALR which was further continued vide impugned order. Hence the present appeal.

3. Ld. Advocate for the appellant submits that the appellant's CHA licence was initially suspended on 6.7.2012 and subsequently the suspension was continued by the impugned order dt. 9.8.2012. Ld. Advocate submits that in this case, there was no SCN issued and nor any enquiry conducted till date. He relied on the decision of Hon'ble Madras High Court decision in the case of CC Chennai vs CESTAT Chennai  2014 (310) ELT 673 (Mad.) and prayed for setting aside the impugned order and allowing the appeal.

4. Ld. A.R reiterated the order. She submits that the delay in proceedings is due to the request made by the appellant to keep the matter pending as the case is pending before Tribunal.

5. We have carefully considered the submissions of both sides and examined the records. In the instant case, the appellant's CHA licence was suspended vide order dt. 6.7.2012 under Regulation 20 (2) of CHALR 2004. Subsequently, the suspension was continued vide the impugned order dt. 9.8.2012. The adjudicating authority suspended the licence on the grounds that the CHA failed to discharge their duties and responsibilities as a CHA as per CHALR. It is held that CHA failed to inform the department on the clearance of baggage of his clients while filing the bills and fulfil their obligations in terms of Regulation 13 of CHALR.

6. We find that the suspension of licence is almost three years now and the authority has not completed the proceedings till date. The Department's plea that delay is due to request of appellant to keep the matter pending as subjudice is not justified and acceptable.

7. In this regard, the Hon'ble jurisdictional High Court of Madras in the case of CC Vs CESTAT Chennai (supra) dismissed the Revenue's C.M.A. and upheld this Tribunal's order revoking the suspension on identical case. The relevant paragraph of Hon'ble High Court order is reproduced as under :-

"26. The Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise & Customs, New Delhi has also issued Circular No. 9/2010-Cus., dated 8-4-2010 in F. No. 502/2008-Cus VI, wherein clarification on procedures in issuance of licence to CHAs have been issued and it is relevant to extract the following paragraphs :

"(v) Time limit for completion of suspension proceedings against CHA licensee under regulation 22 :

7.1 The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by the Board to prescribe an overall time limit of nine months from the date of receipt of offence report, by prescribing time limits at various stages of issue of Show Cause Notice, submission of inquiry report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs recording his findings on the issue of suspension of CHA license, and for passing of an order by the Commissioner of Customs. Suitable changes have been made in the present time limit of forty-five days for reply by CHA to the notice of suspension, sixty days time for representation against the report of AC/DC on the grounds not accepted by CHA, by reducing the time to thirty days in both the cases under the Regulations.

7.2 In cases where immediate suspension action against a CHA is required to be taken by a Commissioner of Customs under Regulation 20(2), there is no need for following the procedure prescribed under Regulation 22 since such an action is taken immediately and only in justified cases depending upon the seriousness or gravity of offence. However, it has been decided by the Board that a post-decisional hearing should be given in all such cases so that errors apparent, if any, can be corrected and an opportunity for personal hearing is given to the aggrieved party. Further, Board has also prescribed certain time limits in cases warranting immediate suspension under Regulation 20(2). Accordingly, the investigating authority shall furnish its report to the Commissioner of Customs who had issued the CHA license (Licensing Authority), within thirty days of the detection of an offence. The Licensing Authority shall take necessary immediate suspension action within fifteen days of the receipt of the report of the investigating authority. A post-decisional hearing shall be granted to the party within fifteen days from the date of his suspension. The Commissioner of Customs concerned shall issue an Adjudication Order, where it is possible to do so, within fifteen days from the date of personal hearing so granted by him.

27. The Honble Supreme Court of India in the decision of Ranadey Micronutrients v. Collector of Central Excise [(1996) 10 SCC 387 = 1996 (87) E.L.T. 19 (S.C.)] has held that the Board circular issued by the Central Board of Excise and Customs is binding on the Revenue and they cannot be challenged on the ground of inconsistency with any statutory provisions.

.... .... .... ....

31. The learned counsel appearing for the respective? respondents has also brought to the knowledge of this Court the show cause notice issued by the Office of the Commissioner of Central Excise, Coimbatore in C. No. VIII/13/9/98-Vol.II-PF-Cus.Pol/9, dated 24-1-2012 in respect of M/s. Jay Yess Agencies under Regulation 22. The said document also supports the case of the respondents herein on the ground that the appellant is following and issuing notice under Regulation 22 of CHALR, 2004, but for the reasons best known to him, has not chosen to issue notice under the said regulations to the respondents in these appeals. No doubt, the appellant is entitled to pass initial order of suspension under Regulation 20(2) and to continue the order of suspension under Regulation 20(3) and however, it must be followed by a notice under Regulation 22 and the authority has to take a decision to suspend the licence permanently or revoke the licence under Regulation 22(1) and admittedly, such a step has not been taken in respect of the cases on hand.

32.As already pointed out by the Tribunal in the? impugned order passed in the appeals that no persons right to carry on his profession can be stopped for a prolonged period through the means of a suspension order and such an approach is against the provisions in Regulations 20 and 22 of CHALR, 2004. In fact, CESTAT South Zone, Chennai in the decision in Maharaja Cargo v. Commissioner of Customs [2012 (284) E.L.T. 409 (Tri.-Chennai)] has found that the order of suspension under Regulation 20(2) is sustainable and observed that the action to suspend CHA is only a preliminary and interim measure and the authorities are required to hold an enquiry and decide whether any action is required to be taken against the appellant and this is not a stage for the Tribunal to pre-judge the issue and influence the enquiry and subsequent proceedings and once the final order is passed, the appellants will have ample opportunity to approach the Tribunal, if they are aggrieved by the said order.

33.As already pointed out in the earlier paragraphs? that the initial order of suspension under Regulation 20(2) and final order under Regulation 20(3) to continue the order of suspension are to be followed by an enquiry under Section 22 and admittedly, it has not been done so within the time limit prescribed. The orders of suspension passed against the second respondent in these appeals cannot continue and the concerned authority, namely the appellant herein has to take a decision whether to suspend or revoke the licence in terms of Regulation 22 and if he fails to do so, the only result is to set aside the impugned orders of initial suspension and its continuance and in the considered opinion of the Court, the Tribunal has rightly done that exercise by correct appreciation of facts and application of Regulations 20 and 22 of CHALR, 2004."

The ratio of this jurisdictional High Court of Madras order is squarely applicable to the present case. In spite of definite time limit of 9 months prescribed by Board circular dt. 8.4.2010 for completion of the proceedings, in the present case, we find that even after 2 = years the proceedings are not completed.

8. Therefore, by respectfully following the Hon'ble High Court order (supra), the suspension of CHA licence is liable to be set aside and the appellants are allowed to perform their duties as CHA. Accordingly, we set aside the order dt. 9.8.2012 and allow the appeal.

9. We make it clear that the adjudicating authority is at liberty to continue the proceedings under Regulation 22 of CHALR.

(Operative part of the order pronounced in open court on 28.5.2015)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

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