2004 (97) ECC 623 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench -- Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

Sai Shipping Agencies

Versus

Commissioner of Customs (Port-Import)

Appeal No. C/COD/369/2004 & C/EH/370/2004
C/SO/143 & 144/2004 and C/234 & 235/2004

[Arising out of Order F.No. R-336/CHA dated 22.3.2004 & Order-in-Original No. 1999/2004 dated 23.4.2004 passed by Commissioner of Customs (Port-Import), Chennai]

Stay Order No. 376 & 377/2004
Misc. Order No. 436 & 437/2004
Final Order No. 561 & 562/2004, dt. 13.7.2004 , Certified on 21.7.2004

Customs House Agent Licensing Regulations, 1984

Regulations 21(2) and 14 -- Both the Bills of Entry were acted upon by the proper officer of Customs, the earlier one having been cancelled by him in accordance with law and the later one having been assessed to duty. Had the filing of the Bills of Entry been unauthorised, they would not have been acted upon. The charge against the appellants in terms of Regulation 14(a) is therefore not sustainable. Nothing has been brought on record to show that the CHA transacted business, in relation to the subject goods, through Dilli Babu. Hence, the charge is not sustainable. Certain other provisions of Regulation 14 have also been invoked by the Commissioner without any specific finding of facts constituting non-compliance with such provisions by the appellants. The impugned order is set aside

Appeal is allowed

PRESENT :

Shri A.K Jeyaraj, Adv. for the appellant.

Shri C. Mani, JDR for the respondent.

Per : P.G. Chacko (Oral)

There are two appeals and two miscellaneous applications before us. Appeal No. C/234/2004 is against an order dated 22.3.2004 of the Commissioner of Customs suspending the appellant's CHA licence. There is a delay of six days in the filing of this appeal, which we condone after hearing both sides. Appeal No. C/235/2004 challenges a subsequent order dated 23.4.2004 passed by the Commissioner confirming his earlier order of suspension of CHA licence. One of the miscellaneous applications is for early disposal of the appeals and two other applications are for stay of operation of the aforesaid orders. After examining the records and hearing both sides, we allow the "early hearing application" and take up the appeals for final disposal. As we are disposing of the appeals finally at this stage, the stay applications are infructuous.

2. The aforesaid orders of the Commissioner have been passed under Regulation 21(2) of the CHA Licensing Regulations 1984. The suspension of licence is based on a finding that the CHA violated various provisions of Regulation No. 14. This finding is based on the following facts: The appellants had filed a Bill of Entry with the proper officer of Customs on 8.1.2004 in respect of certain machinery imported by M/s. Prabhu Engineering, Chennai. The Bill of Entry was signed by one Shri V. Nani Rao, authorised representative of the CHA. On 9.1.2004, the importer filed an application through their CHA (appellants) for cancellation of the above Bill of Entry. This application was allowed by the proper officer of Customs on the same day. On 10.1.2004, the importer through the same CHA filed a fresh Bill of Entry in respect of the same goods. That Bill of Entry was also signed by the aforenamed person, Shri Nani Rao. Meanwhile, there was a change of rate of duty of customs on the goods. The rate of duty on 10.1.2004 was lesser than the rate applicable to the goods as on 8.1.2004 by virtue of a Notification which came to be issued in between. However, the duty at the higher rate was paid by the importer later on. Notwithstanding this fact, the department suspected fraud on the part of the CHA. A question was raised in the departmental circles as to why the earlier Bill of Entry was cancelled. Inquiries were made which ultimately resulted in the suspension of the appellants' CHA licence and the subsequent confirmation of the suspension.

3. Heard both sides. Ld. Counsel for the appellants submits that nothing illegal was done by the appellants in relation to the clearance of the subject goods. The Bill of Entry was filed in accordance with law that was cancelled in accordance with law and a fresh Bill of Entry was subsequently filed, which was also in accordance with law. Ld. Counsel further points out that the finding of violation of Regulation No. 14 is not well-founded inasmuch as the impugned orders have not found any illegality or irregularity in relation to clearance of the subject goods. Ld. DR opposes these arguments on the strength of the findings recorded by the Commissioner.

4. We have examined the submissions. One charge against the appellants, in relation to the clearance of the goods in question, is that they had filed the Bills of Entry and taken steps in follow-up thereof without authorisation. This charge is in terms of Clause (a) of Regulation No. 14. We find that both the Bills of Entry [filed on 8.1.2004 and 10.1.2004] were acted upon by the proper officer of Customs, the earlier one having been cancelled by him in accordance with law and the later one having been assessed to duty. Had the filing of the Bills of Entry been unauthorised, they would not have been acted upon. The charge against the appellants in terms of Regulation 14(a) is therefore not sustainable. In terms of Clause (b) of Regulation 14, the Commissioner has found that the CHA transacted business through an employee who was not duly approved by the Assistant Commissioner or Deputy Commissioner of Customs designated by the Commissioner. The employee named in the impugned orders is one Dilli Babu. It appears from the records that it was not through this Dilli Babu that the above Bills of Entry were filed, nor was anything done through him by the CHA in follow-up of the Bills of Entry. Apparently, Dilli Babu was one of the employees of the CHA. But the Bills of Entry in this case were filed by an authorised representative of the CHA. Nothing has been brought on record to show that the CHA transacted business, in relation to the subject goods, through Dilli Babu. Hence, the charge is not sustainable. Certain other provisions of Regulation 14 have also been invoked by the Commissioner. But we have not been able to locate in the impugned orders, any specific finding of facts constituting non-compliance with such provisions by the appellants. Yet another aspect which has been stated before us by the Counsel is that the suspension order passed in March 2004 by the Commissioner under Regulation 21(2) in relation to the clearance of goods effected in January 2004 does not reflect any urgency. Had there been any urgency of taking action against the CHA, it would have been done shortly after the clearance of the goods. The Counsel has further submitted that, so far, there has been no inquiry against them under Regulation 23. Even any show-cause notice is yet to be issued to them.

5. In the light of our findings already recorded, we set aside the impugned orders and allow these appeals. It is, however, made clear that this order will not stand in the way of any inquiry proceedings already commenced against the appellants under Regulation 23.

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