By TIOL News Services

KOLKATA, MAY 27, 2015: AN intelligence was collected by DRI that certain operators/importers are indulging in duty evasion by mis -declaring old car attracting higher rate of duty as new car chargeable to lower rate of duty. Further, the value and model of these imported vehicles were found to be mis -declared inasmuch as high end vehicles/SUV were imported in the guise of low end vehicles. Investigations conducted against some of the operators revealed that bills of entry in 62 such cases were filed in Customs House, Kolkata by the CHA M/ s.Baid Organisation (P) Ltd. at the behest of one Shri Suresh Halde, a resident of Thane(Maharashtra).

In his statement dated 17.6.2009 Shri Halde stated that he was advised by one Shri Balu Patil, who suggested that they could make more money for customs clearance of the vehicles imported by Charanjit Singh and Rajesh Jethani . He stated that he was informed by Shri Charanjit Singh and Shri Rajesh Jethani that some such vehicles could be imported through Kolkata port and therefore he along with Shri Balu Patil visited Kolkata and happened to meet Shri Monoj Baid in the Kolkata Customs House running his business in the name of M/ s.Baid Organisation (P) Ltd. He requested Monoj Baid to allow the use of his CHA license for import clearance of impugned vehicles through Kolkata port and offered Rs.7 ,000 /- per job to which Shri Monoj Baid agreed. He admitted that these vehicles were imported on behalf of Shri Charanjit Singh. Shri Monoj Baid in his statement dated 23.7.2009 admitted that he allowed his license to be used by Shri Suresh Halde for the monetary consideration. It appeared that in the present case M/ s.Baid Organisation (P) Ltd., the CHA had violated the provisions of Regulation 12, 13(a), 13(b), 13(d) and 13(e) of CHALR 2004. Consequently license of the CHA was suspended vide establishment order No. 11/2010 dated 11.01.2010. .

In the meantime the appellant filed a writ petition in the High Court of Calcutta. In terms of an interim order dated 19.8.2010 in the said petition, the commissioner of Customs (airport & admn .) allowed the CHA to carry on their CHA business till 16.01.2011 which was extended to 16.7.2011.

The Commissioner revoked the license and forfeited the security deposit under regulation 20(1) of CHALR . On Appeal by the appellant CHA against the above order the Tribunal remanded the matter vide order dated 20.3.2012 to adjudicate the case afresh after considering whether the CHA has procured the proper authorization from the impugned importers. In the remand order dated 17.10.2012 the Commissioner has dropped the above charges but upheld the charge of violation of Regulation 13(e) of CHALR , 2004. Consequently, he again revoked the licence and forfeited the security deposit.

Being aggrieved, the CHA is again before the Tribunal.

3. Ld.Advocate for the appellant assailed the order on the ground that although the adjudicating authority has upheld the charges of violation of Regulation 13(e), but no reasons are mentioned in the said order. He submits that Regulation 13(e) requires that the CHA shall impart to a client any information with reference to the clearance of the cargo, but the order of the Commissioner is silent on this issue as to which information was required to be imparted . He submits that all other charges have been dropped in this case except the charges on violation of regulation 13(e) of CHALR , 2004. It is the submission that in case of Sai Nath Clearance Agency vs. CC( General), Mumbai reported in 2011 (269 ELT 106( Tri.Mum ) , wherein out of the four charges, two have been proved by the respondent, this Tribunal held that continued operation of the commissioner's order in such a case was not justified. He submits that in the present case, the CHA's licence was revoked on 15.7.2011 and since the then CHA is out of a job which is adversely affecting his livelihood. Under the circumstances the CHA has been sufficiently punished.

The Tribunal noted that in this case the licence has been revoked on the sole ground of violation of Regulation 13(e). The said provision reads as under :-

"Regulation 13. Obligation of Customs House Agent - A Customs House Agent shall

(e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;"

It is a case of Revenue that in all the 62 cases of imports the documents were given to the CHA by one Shri Halde , but the CHA failed to ascertain the genuineness of the importer in all these cases. This was considered to be a gross negligence and in violation of the provisions of Regulation 13(e) of CHALR .

On the other hand according to Appellant, the adjudicating authority has not mentioned in his order any such information required to be imparted to the CHA's client.

Tribunal noticed from the impugned order that the Commissioner has dropped the charges framed against the appellant CHA for violation of Regulation 13(a), 13(b), 13(d) and 19(8) of the CHALR , 2004. These Regulations inter alia provide that the CHA shall obtain an authorization from his client; transact business in the customs stations personally or through their employee; advise his client to comply with the provisions of the Act and Regulation and exercise necessary supervision on conduct of his employee. The Commissioner did not find any violation on the part of the CHA in the above matters. Tribunal also noticed that under para 30 of the impugned order that the CHA was not aware of the fraudulent attitude of the importers and the operators who engaged themselves in fraudulent import of high end cars/SUVs by mis -declaring the same as new vehicle. He has further recorded that the appellant CHA filed bills of entry as per import documents and during examination no adverse report received.

Tribunal found that prior to detection by the officers of DRI no irregularity was found in respect of the import of impugned vehicles. As such there was no occasion to impart any information to the CHA's clients by the said CHA as required under Regulation 13(e). Moreover, it is the categorical findings of the Commissioner that the appellant CHA was totally unaware of the fraudulent activities of the operators/importers. Merely because the CHA could not doubt as to why on every occasion the import documents were brought to him by Shri Halde cannot be a sufficient ground for revocation of license.

The tribunal further observed, “Out of four charges, one has been proved by the respondent but this alone is not enough for continued operation of the Commissioner's order. The CHA has already suffered for over four years on account of revocation of license. At this length of time, the CHA license needs to be restored. However, for not acting diligently, the Commissioner's order for forfeiture of security deposit has to be upheld.”

In the result, the revocation of licence is set aside, but the forfeiture of security deposit is sustained, The appellant may be allowed to resume business as CHA in accordance with the CHALR subject to furnishing fresh security deposit.

(See 2015-TIOL-948-CESTAT-KOL)