2004 (97) ECC 721 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

West Zonal Bench -- Mumbai

Shri S.S. Sekhon, Member (T) and Shri T. Anjaneyulu, Member (J)

Crown Shipping Agency

Versus

Commissioner of Customs, Mumbai

Appeal No. C/683/2004

[Arising out of Order-in-Original No. 23/2004 dated 10.6.2004 passed by the Commissioner of Customs (GEN) Mumbai.

Order No. A-1054/WZB/2004/C-III, dt. 25.8.2004, Certified on 9.9.2004

Customs House Agent Licence

As per CHALR proper Authorization, proper advice to comply provisions of Customs Act and proper conduct of the Agent required Regulation Nos. 13,14(d), 20(7) to be adhere -- On enquiring -- When no violation of sale or Transfer is being found the order cancellation arrived at after following the finding of Enquiry Officer are to be set aside and the licence restored -- Appeal allowed of CHALR, 1984.

PRESENT :

Shri Z.B. Nagarkar, Advocate for the appellant.

Shri B. Chandra (JDR) for the respondent.

Cases Cited :

1. Krishna Kumar Sharma 2000 (122) ELT 581..................................................... [Para 3]

2. P.P. Dulte, 2001 (136) ELT 1042 (T)................................................................ [Para 3]

Per : S.S. Sekhon

Commissioner vide the impugned order has cancelled CHA licence No. 11/427 of the appellant after coming to the following findings:

"I have gone through the case records and considered all the aspects of the case. The Enquiry Officer has held only the Article of Charge I against M/s Crown Shipping Agency in the case of M/s Valco Overseas, as proved and held all the other charges against the CHA as not proved. The articles of Charge-I related to the charge of sale or transfer of licence by CHA. S/Shri Ramesh Singh and Ramdutt Singh had confirmed in their statements that they were engaged in the clearance of goods through customs and did not have CHA licence and Shri M.I. Qureshi, partner of M/s Crown Shipping Agency used to come to their office to sign the shipping bills and other documents. Shri Qureshi had in his statements confirmed that he had filed and signed the Shipping Bills of M/s Valco Overseas; that he did not know the exporter and his employee Shri V.H. Jadhav has also signed the Shipping Bills; that their documents had been given to him by Shri V. Gaonkar Shri Gaonkar in his statement had admitted that Shri Qureshi had taken a deposit of Rs. 30,000 for allowing him to use the CHA Licence of M/s Crown Shipping Agency. Shri V.H. Jadhav had in his statement admitted that he was present at STP on 13.9.2000 in connection with examination of Export cargo of M/s Valco Overseas under instructions of his employee Shri Qureshi.

It has been brought on record that Shri Qureshi had signed Annexure `B' of 10 S/Bs without verifying the contents thereof and in the declaration even the name of the exporter and of the exporting firm had been filled in. S/Shri Ramdutt Singh and Ramesh Singh had also confirmed that their firm M/s Adarsh Clearing and Forwarding was using CHA licence of M/s Crown Shipping Agency by making payments document/Bill-wise and in this way on an average Rs. 25,000 to Rs. 30,000 was being paid per month.

The party has contended that they had lodged police complaints against M/s Valco Overseas and had provided assistance in investigations against the exporter. The party has citied in their support various judgments holding that reliance cannot be placed on statements recorded under Section 108 of the Customs Act, 1962 without corroboration by other evidences. They also referred to the order of Collector of Customs holding that there is no legal bar to clients coming through third parties and in such cases CHA licence cannot be said to have been lent to another person as soliciting business is not a misconduct. In this case apart from the admissions in various statements referred to above which confirm use of CHA licence by persons not authorized by M/s Crown Shipping Agency, to act on its behalf in getting clearances of goods through Customs and signing of documents by Shri Qureshi without ensuring correctness of contents clearly implying were of licence for monetary considerations and thus failing to insist for fulfilment of obligations placed on a CHA would normally do if it was not compromised by constraints of having been paid to go alongwith the requirements of unscrupulous exporters. Any amends made later by assistance to Department in investigations against the exporter cannot lessen the gravity of offence committed earlier. Thus, the charge rests not only on the statements of various persons referred to above, but on the proven attempt to export goods of quality far below the declaration as claimed in the documents as also, on the receipt of payments far in excess of amounts payable for providing services for activities which can be termed above board and strictly within the legal requirements. The ratios of the judgments and orders cited by the party in support are thus not applicable.

I therefore, hold that M/s Crown Shipping Agency by allowing their licence to be used by others for activities in contravention of the provisions of the Customs Act, 1962 had in effect to that extent transferred their licence in violation of Regulations 13 of CHALR, 1984."

2. These findings of Transfer of a CHA licence were arrived at, by the Ld. Commissioner, after accepting the report of the Enquiry Officer under the Custom House Agent Licensing Regulation 1984, (here after refer to CHALR) on the following charges framed:

Article of Charge I

As per Regulation 13 of CHALR, licence is granted/renewed in favour of Licence and no licence shall be sold or otherwise transferred. The grounds were --

Whereas, in the instant case, it was revealed that M/s Crown Shipping Agency, CHA No. 11/427 was allowing the use of the CHA licence to other Clearing and Forwarding Agencies who were not holding an authorized Customs House Agent Licence. The statements of Shri Ramesh Singh and Ramdutt Singh, confirms that Shri M.I. Qureshi of M/s Crown Shipping Agency was knowing to them as they were using the CHA licence of Shri Qureshi. Shri Vishwas Gaonkar in his statement dated 12.1.2001 stated that Shri Qureshi had taken Rs. 30,000 as deposit for allowing him to use the CHA licence of M/s Crown Shipping Agency.

Article of Charge II

As per CHALR the (a) authorization was required to be obtained from each company, firm or individual for whom he is working as an agent and produce such authorization whenever required by Assistant Commissioner of Customs. The goods were-

Whereas, in the instant case, Shri M.I. Qureshi was not knowing the exporter of M/s Velco Overseas. The documents were given to him by Shri Vishwas Gaonkar. Therefore, it appears that the authorization had not been taken from the proper person. He did not know the exporter and for the purpose of signature of Customs documents his employed Shri Vijay H. Jadhav (sic, Employee) signed the shipping bills.

Article Charge III:

As per Regulation 14(d) of CHALR, he was required to advise his clients to comply with the provision of Customs Act and report non-compliance to Assistant Commissioner on the grounds--

Whereas, in the instant case, Shri Qureshi had signed the Annexure-B of the subject 10 Shipping Bills without verifying that there was mis-declaration by the exporter e.g. in quota related information.

(Column-21 of Annexure-B) quota certificate for Hungary had been mentioned while Hungary was not a quota country for the purpose of export of garments. The CHA was not knowing the exporter. This fact was not brought to the notice of concerned Asstt. Commissioner of Customs. Therefore, the CHA failed to comply with the Regulation 14(d) of CHALR, 1984.

Article Charge IV:

CHA as per 14(1) of CHALR was required to ensure that all documents prepared or presented by on his behalf are strictly in order it was based on-

In the instant case, Shri Qureshi, Partner of the CHA had signed the Annexure-B of the 10 Shipping Bills in question without verifying that there were blatant mis-declaration by the exporter e.g. in quota related information (column No. 21 of Annexure-B) quota certificate for Hungary had been mentioned while Hungary was not appearing in the list of quota countries for the purpose of export of garments. Even in the declaration made at the foot of the Annexure-B neither the name of the exporter nor the name of exporting firm had been filled. Thus, the said CHA acted in gross contravention of the provisions laid down under Regulation 14(1) of the CHALR, 1984.

Article of Charge in case of M/s R.S. Exports:

Charge I: As per Regulation 20(7) Supervision necessary to ensure proper conduct on employer in the transaction of business as agent not effected on the goods-

Whereas, in the instant case, the statements of Shri S.K. Rane S. No. 706, Shri Dyandev More & Shri Vijay H. Jadhav recorded from time to time it revealed that the person who had come with the aforesaid eight shipping bills of M/s R.S. Exports, New Delhi, was Shri Vijay Jadhav, another employee of M/s Crown Shipping Agency.

Thus, an employee of M/s Crown Shipping Agency, CHA No. 11/472, had knowingly connived/aided and abetted in the fraudulent export of Readymade Garments on behalf of M/s R.S. Exports. This was due to the lack of proper control and supervision of CHA firm M/s Crown Shipping Agency. Thus, the said CHA violated the provisions laid down under Regulation 20(7) of the CHALR, 1984.

The enquiry officer has found the charges in an Article I hereinabove and the other four charges were found and held to be not proved, after detailed enquiry.

3 (a) If the article of charges and grounds as are not proved, are considered, it is established that the CHA has complied with the onerous responsibility of effective supervision on his employees, all the documents have been prepared and presented with due care and in accordance with the Act and the Procedures. There was nothing extraordinary which was to have been brought to the notice of the Assistant Commissioner. This also indicates that proper authorization was obtained from the clients. Therefore, it can be concluded that the Transaction effected were within the four corners of the CHAS liabilities and responsibility as far as the consignment of M/s Velco and M/s R.S Exports were concerned. The Commissioner, in accepting these findings of the Enquiry Officer, has accepted the above position.

(b) When all documentation are made/handled as prescribed and procedures have been found to be correctly followed, by the CHA after obtaining authorizations from the clients, merely because they are alleged to obtain a deposit of Rs. 30,000 from one Shri Gaonker will not be cause or case to bring them under the charge to have sold or and transferred the CHA licence. Surely a Transfer of CHA licence will not go hand in hand with subsequent obligations to be performed under the licence by the appellant. Transfer however temporary is therefore not infered. The Article of Charge II that he was not knowing the Exporter M/s Velco Overseas and documents were given to him by Mr. Gaonkar and in his having obtained a deposit of Rs. 30,000 from such unknown exports, which are not proved in any case, would indicate business prudence and not sale or transfer of the licence as is being arrived at. The subsequent charges, of which the CHA is absolved prove that he handled the consignment, documentation, in the manner prescribed. The obtaining of a deposit of Rs. 30,000 from a first time unknown client should not and cannot be considered as sale or transfer of his CHA licence in any manner.

(c) As regards the statement of Singh Brothers and payments and business obtained through their firm i.e. M/s Adarsh Clearing and Forwarding, it is found that, Ramesh Singh in cross-examination, before the Enquiry Officer had denied that he was using the licence as alleged. There is no legal bar of clients of a CHA, being procured by other firms and or in soliciting business through other unlicensed firms. That could not be a misconduct under CHALR to establish Transfer of Sale of Licence. Since as per the findings of the Enquiry Officer accepted by the Commissioner all subsequent act and role of CHA has been performed by Shri Qureshi and his employees. Practice of soliciting clients is established and finds approval as seen from the past orders of Collector/Commissioner of Central Bombay who have repeatedly upheld and found in the past. Orders passed by earlier Collector on this same subject were not considered by the Ld. Commissioner or have been not differentiated. Orders passed contrary to the settled position, upheld by Tribunal vide order in case of P.P. Dulte, 2001 (136) ELT 1042 (T) and Krishna Kumar Sharma, 2000 (122) ELT 581 would exhibit judicial indiscipline and not a judicious order. Such orders cannot be upheld to arrive at conclusion that the CHA herein had sold and transferred the licence. When otherwise the CHA for the same clients is found to have not conducted any violation.

4. When no violation of sale or Transfer is being found the order cancellation arrived at after following the finding of Enquiry Officer are to be set aside and the licence restored. Appeal allowed. Ordered Accordingly.

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