Ashok Jindal

The appellant who is a Customs House Agent (CHA) has filed this appeal against the impugned order whereby his CHA licence No. 11/1033 has been revoked and the entire security deposit has been forfeited for the alleged violation of Regulations 12, 13(a) and 13(d) of the CHALR, 2004.

2. The facts of the case are that the DRI vide letter dated 03.02.2009 stated that the said CHA firm was allegedly involved in the case of misuse of IEC by undervaluing the imported goods and thereby violating provisions of CHALR, 2004. In view of this information, the licence was suspended on 11.02.2009 and the suspension was confirmed on 25.03.2009. Thereafter, Charges were framed and an Inquiry Officer was appointed for the alleged violation of provisions of CHALR, 2004 on the charges of sub-letting the CHA licence to one Shri Manoj Shial for monetary consideration, not having proper authorization from the importer, not advised their clients properly and the appellant has not worked efficiently which is in violation of provisions of CHALR, 2004. During the course of inquiry, except the charge of not working efficiently, all other charges were proved. Therefore, the Commissioner of Customs (General), Mumbai revoked the CHA licence vide order dated 21.09.2010. Aggrieved by the said order, the appellant is before us.

3. Shri Anil Balani, learned Advocate for the appellant appearing before us submitted that although in this case the statements of the appellant as well as Shri Manoj Shial were recorded under Section 108 of the Customs Act, but no show-cause notice was issued to the appellant. He further submitted that Shri Manoj Shial was a regular employee of the appellant and the allegation against the appellant is that they have sublet the licence to Shri Manoj Shial is not correct as Shri Manoj Shial was having his firm in the name of M/s. Arihant Shipping Agency who brought the work of clearance to the appellant and the appellant was issuing invoices of the clearance made by them to M/s. Arihant Shipping Agency and M/s. Arihant Shipping Agency was further issuing invoices to various agencies who has done clearance through the appellant. He further submitted that the allegation against the appellant that Shri Manoj Shial was involved in the clearance of the consignment Hot Melt Glue Sticks. In fact, this fact is not correct as it is on record that none of the consignment of these imports cleared by Shri Manoj Shial or ever participated in the clearance of these imports. Therefore, the charge against the appellant that they have let out the CHA licence is not sustainable. He further submitted that the appellant relied on the decision of Dilip A Goplani vs. Commissioner of Customs, Kandla 2003 (160) ELT 223 (Tri. [LQ/CEGAT/2003/1071] Mum.) and Krishan Kumar Sharma vs. Commissioner of Customs, New Delhi - 2000 (122) ELT 580 (Tri. ) before the Commissioner of Customs during the course of adjudication but the Commissioner of Customs has not considered the reliance placed by the appellant. He further submitted that in similar set of facts in the case of M/s Venkatesh Agencies, CHA who has also been charged as the appellant in the case and his suspension was withdrawn by the same Commissioner of Customs (Gen), Mumbai. He further submitted that in the case of Daroowala Bros & Co., out of eight charges, seven charges were proved but the Commissioner of Customs (Gen) withdrew the order of suspension of CHA licence. Therefore, discrimination has been done with the appellant in this case. To maintain the consistency, the order passed by the Commissioner of Customs (General) in this case of the appellant, is to be set aside.

4. On the other hand Shri A.K. Prabhakar, learned A.R. strongly opposed the contentions of the learned Advocate and submitted that during the course of investigation the statements of the appellant as well as Shri Manoj Shial was recorded under Section 108 of the Customs Act wherein they have admitted the charge of sub-letting the CHA licence against the monthly payment of Rs.9,000/-. Moreover, the Commissioner of Customs (Gen) has gone through the detailed investigation and thereafter he found that the charges against the appellant have been proved therefore, he has rightly revoked the CHA licence of the appellant.

5. Heard both the sides in detail and perused the records.

6. On perusal of the records, we find that it is an admitted position that no proceedings were initiated against the appellant under the Customs Act, 1962. Both the statements under Section 108 of the Customs Act have been recorded. Further, we find that in case of Daroowala Bros & Co., in paragraph 30 of the order-in-original, the Commissioner has observed that -

30. CHA files shipping documents in the Customs on the basis of materials given to him by his client and this is done in good faith considering that these documents are genuine. Proper valuation has necessarily to be done under relevant Customs Rules by the competent Customs Officers during Customs examination of the goods. Act of overvaluation or checking of overvaluation of export goods is not always attributable to the CHA unless proved otherwise. In this case, the CHA has claimed that he produced letter of authorization/Power of Attorney which has otherwise not been rebutted during enquiry. However, I find that in respect of regulation 13(n), efficiency would not only mean doing work in time, it would also mean doing it rightly. It is common knowledge in trade as to which kind of export goods are prone to overvaluation. Simply bcause of the fact that he has been in clearance business for considerable time, he should have known that garments/fabrics are one of such goods. Keeping in view the fact he could ot meet exporter, for whatever reasons, and that he obtained documents from Power of Attorney holder, he should have exercised more than routine checks. He did not do so, even when he was handling export shipment of item prone to overvaluation. Nor the CHA has tried to show during enquiry or during personal hearing that he took more than routine effort in dealing with the sensitive goods. He has not been efficient. So, Article of Charge III in respect of sub-regulation (n) of regulation (13), stands proved.

6.1 In paragraph 31 he had said that I am of the view that CHA have performed in a casual manner. Even though, I do not fully concur with the findings in the Inquiry Reports, there are enough evidence on records that point out that the CHA have not behaved prudently. But for the lapses on the part of the CHA as enumerate in the Inquiry Reports as well as in my observations after weighing defence put forth by the CHA, it is seen that no malafide intent has been proved against the CHA. Considering magnitude of infractions on the part of the CHA, I am of the view that the CHA should be punished adequately. While considering the quantum of penalty to be imposed upon the CHA, I also take into account that the CHA Licence was placed under suspension on 25.07.2008 and they have been out of business since then causing enormous hardship to the company and to the staff and their family members, and thereafter he made operative of the CHA licence by forfeit the entire amount of security deposit.

6.2 In case of M/s Venkatesh Agencies also where the CHA was involved in the same activities, as alleged against the appellant, and in that case also while considering the representation made by the CHA during the course of post decisional hearing observed that the main case investigated by DRI relates to fraudulent misuse of IEC codes and undervaluation of imported goods. The allegations on CHA include non-obtaining authorization from the actual importer and thus abetting in the fraudulent designs of the importers. This is precisely the subject matter of the Inquiry under Regulation 22 of CHALR, 2004 being conducted against the CHA. With regards to undervaluation of the goods, the CHA have contended that they submitted the documents made available to them by their clients and there is no allegation that they were aware of such malpractices or withheld any information from the department.

6.3. We have seen that, in that case the statement of Shri Nitin Jatania was recorded and he has stated that he had been importing tyres in the name of M/s. Fasttrac Impex Pvt. Ltd. since 2003, that on being asked about the said M/s. Dhiren Enterprise, he stated that he had also cleared the import consignments of tyres consignments of tyres through CHA Firm M/s. Venkatesh Agencies, that the said M/s. Dhiren Enterprise was a Proprietary Firm floated by one Shri Dhiren Gor an employee of the said CHA Firm M/s. Venkatesh Agencies and thereafter he reviewed the suspension and revoked CHA licence.

7. As discussed above, we find that there is no consistency in the observation made by the Commissioner of Customs (General) when identical charges have been made against CHA namely M/s. Venkatesh Agencies he withdrew the suspension of CHA licence on preliminary stage. It is well settled law that the authority should be consistent in their views. Therefore, in the case of M/s. Venkatesh Agencies the Commissioner of Customs (General), Mumbai has revoked the suspension of the CHA licence after giving post decisional hearing but he has not followed the same precedence in the appellants case where the appellant was also charged with the same allegation. Therefore, the impugned order is not sustainable in the eyes of law. Accordingly, we set aside the impugned order and direct the Commissioner of Customs, Mumbai to allow the CHA licence No. 11/1033 of the appellant operative with immediate effect.

8. Appeal is disposed of in the above terms.