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2016 (9) TMI 927 - AT - CustomsRestoration of CHA license revoked - forefeiture of security deposit - regulation 22(7) and 20(1) of then CHLR 2004( now Regulations 20(7) and 18 of CBLR, 2013) - drawback - mis-declaration - classification - Customs Tariff Item No. 6109.9090 - drawback @ 7.8% of the FOB value - Customs Tariff item No. 6109.1000 - drawback @ 6.7% of the FOB value - Held that - Appellant, being CHA, acted as a CHA of the exporter on the basis of documents submitted to him. As per the document, description declared was not incorrect i.e. readymade garment /T shirt. Further, the appellant were paid ₹ 500/- per document for their clearance in respect of exports of the impugned goods, there is nothing on record to show that the appellant have benefited extraneously over and above the actual CHA fees i.e. ₹ 500/- per document. In view of this position also there is no doubt that appellant CHA was nowhere involved in any mis-declaration of the goods made by the exporter - CHA not responsible for mis-decaration. Authorisation letter - Held that - once the exporter gave the authority letter and thereafter the business is continuing, the same authority letter will be sufficient for carrying out the business in future also. Therefore, in each and every consignment, or each and every shipping bill separate authorization is not required. Once the authorization was given by the exporter it is sufficient compliance of regulation 13(a) of CHARL, 2004. when the shipping bill was filed by the CHA and it has been accepted by the exporter, this fact itself shows that appellant has been duly authorized by the exporter for carrying out clearance work of exports consignments. It is general practice in the CHA business that CHA work is brought by the various intermediary but ultimately it is CHA and importer or exporter which are under contract regarding the CHA clearance as well as payment term. Therefore, merely because some shipping line brought client to the appellant does not lead to any conclusion that there was no relation between appellant and exporter. Advise to client - Held that - Even after detection of different nature of the goods, the description of the goods remained same. Therefore there was no occasion for CHA to advise client. Performance of CHA - delay and deficiency - Regulation 13(n) - Held that - the appellant have performed their clearance work of export consignment in usual course and nothing brought on record that appellant as CHA have delayed in the clearance work or there is any deficiency in the performance of clearance work on the part of the appellant. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Alleged misuse of the drawback scheme by the exporter. 2. Violation of Regulation 13(a) of CHALR, 2004. 3. Violation of Regulation 13(d) of CHALR, 2004. 4. Violation of Regulation 13(n) of CHALR, 2004. 5. Revocation of CHA License and forfeiture of security deposit. Issue-wise Detailed Analysis: 1. Alleged Misuse of the Drawback Scheme by the Exporter: The case originated from intelligence received by the DRI indicating that M/s. Cosmos Enterprises misused the drawback scheme. The exporter declared the goods as made of manmade fibers to claim a higher drawback rate of 7.8%, whereas the goods were actually made of 100% cotton, eligible for a lower drawback rate of 6.7%. The misclassification was detected after the Textile Committee tested the goods. 2. Violation of Regulation 13(a) of CHALR, 2004: The Commissioner held that the appellant violated Regulation 13(a) by not obtaining a proper authorization letter for the consignment in question. The authorization letter submitted was for earlier consignments and was not accepted due to discrepancies in the signatures. The appellant admitted to receiving the client through a middleman, not directly from the exporter, further supporting the violation. 3. Violation of Regulation 13(d) of CHALR, 2004: The Commissioner found that the appellant failed to meet the exporter and thus could not advise them to comply with all rules and regulations. The CHA was deemed to have blindly accepted documents without exercising due diligence, leading to the misdeclaration and misclassification of goods to avail a higher drawback rate. 4. Violation of Regulation 13(n) of CHALR, 2004: The Commissioner contended that the CHA did not possess an authority letter and accepted clearance work through an unauthorized person, indicating lapses in carrying out clearance work properly. This failure to efficiently discharge their obligations as a Custom House Agent constituted a violation of Regulation 13(n). 5. Revocation of CHA License and Forfeiture of Security Deposit: The Commissioner ordered the revocation of the CHA license and forfeiture of the entire security deposit based on the findings of the violations mentioned above. The appellant challenged this order, arguing that the authorization letter was genuine and that the CHA acted based on the documents provided by the exporter. The appellant also highlighted that the penalty imposed by the adjudicating authority was set aside by the Commissioner (Appeals), indicating no involvement in the misdeclaration by the exporter. Tribunal's Findings: The Tribunal found that the misclassification could only be detected after testing by the Textile Committee, and it was unreasonable to expect the CHA to know the exact nature of the goods by mere inspection. The Tribunal noted that the appellant acted based on the documents provided and that there was no apparent discrepancy in the documents. The Tribunal also observed that the appellant was paid a nominal fee of ?500 per document, indicating no extraneous benefit. Regarding the authorization letter, the Tribunal found that the appellant did submit an authorization letter, and once given, it should suffice for ongoing business. The Commissioner’s contradictory stance on the authenticity of the signature was noted. The Tribunal concluded that the appellant was duly authorized by the exporter for the clearance work. The Tribunal also dismissed the charges under Regulations 13(d) and 13(n), stating that the CHA’s role is to act based on the documents provided and that there was no evidence of delay or deficiency in the performance of clearance work. Conclusion: The Tribunal set aside the impugned order of revocation and forfeiture, allowing the appeal. The findings indicated that the appellant was not involved in the misdeclaration by the exporter and had acted within the scope of their duties as a CHA based on the documents provided. The charges of violating Regulations 13(a), 13(d), and 13(n) were not substantiated, leading to the conclusion that the revocation order was unsustainable.
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