2019 (1) TMI 519 - AT - Customs

Overvaluation - fraudulent intention to avail excess duty drawback - omission or commission on the part of the Appellants in relation to the export of the said goods - Held that - There was no delay or inefficiency on the part of the employees of the CHA with reference to the three Shipping Bills in question In view of the above the Inquiry Officer stated that he was constrained to hold that the charges as contained in Article of Charge-I was not proved. Article of Charge-II related to failure on the part of the Appellants to ensure the conduct of their own employees which rendered them liable to action under Regulation 19(8) of CHALR, 2004 - During the course of proceedings, the witnesses examined by the department had stated plainly that they are not permitted to open the package, which normally comes in the sealed condition because there would be complaints and allegations of thefts or substitution; even though this was what was clearly stated by the department s witness, yet, no evidence was brought on record to say that this contention was not true in view of any specific provisions of law; since the charge basically was that of misdeclaration of the export cargo, in terms of value and no allegations of aiding or abetting were made against the Appellants, the charge of misconduct on the part of the employees cannot sustain; Consequently the charge that there was a failure on the part of the Appellants to ensure proper conduct of the employees cannot be upheld. Accordingly, the Inquiry Officer held that this charge too was not proved.

Summary

Issues Involved:
1. Alleged delay and inefficiency in the discharge of duties by the Custom House Agent (CHA).
2. Alleged failure of the CHA to ensure proper conduct of their employees.

Issue-wise Detailed Analysis:

1. Alleged delay and inefficiency in the discharge of duties by the Custom House Agent (CHA):

The first issue pertains to the alleged contravention of Regulation 13(n) of the Custom House Agents Licensing Regulations (CHALR), 2004, which mandates that CHAs must discharge their duties with utmost speed, efficiency, and without avoidable delay. The appellants, M/s. East West Freight Carriers Ltd, argued that they had adhered to the required procedures for filing declarations and necessary documents for the export of goods. The consignment in question was received in fully packed condition at the Air Cargo Complex (ACC) and presented for examination by the proper officer on the same day, within minutes of receipt.

The Inquiry Officer found that no evidence was presented to substantiate the charge of delay or inefficiency on the part of the appellants. The examination of witnesses revealed that the cargo was received at about 5 PM, and all necessary formalities, including registration and presentation for examination, were completed promptly. The documents were ready even before the cargo arrived, indicating no delay in the process. Consequently, the Inquiry Officer concluded that the charge of delay and inefficiency was not proved.

2. Alleged failure of the CHA to ensure proper conduct of their employees:

The second issue relates to the alleged failure of the appellants to ensure the proper conduct of their employees, rendering them liable under Regulation 19(8) of CHALR, 2004. The charge was based on the alleged misdeclaration of the value of the export cargo, leading to an overvaluation with the intention of claiming higher duty drawback.

The Inquiry Officer's report noted that there was no specific provision in the CHALR, 2004, that imposed a responsibility on the CHA or their employees to verify the contents or value of the cargo. The witnesses from the department confirmed that CHAs are not permitted to open sealed packages to avoid allegations of theft or substitution. Furthermore, no evidence was presented to contradict this contention. The charge did not include any allegations of aiding or abetting the misdeclaration by the exporter. Therefore, the Inquiry Officer held that the charge of misconduct on the part of the employees was not sustainable, and consequently, the charge against the appellants for failing to ensure proper conduct of their employees was also not proved.

Conclusion:

The Inquiry Officer, after considering the evidence and submissions from both the department and the appellants, concluded that neither of the charges framed against the appellants was proved. The appellants were found to have acted in accordance with the required procedures, and there was no evidence of delay, inefficiency, or failure to ensure proper conduct of their employees. The judgment was pronounced in court on 08-01-2019.