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TMI Blog2009 (7) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... y authority i.e. Commissioner of Customs finds it to be a fit case for immediate action, when an enquiry is pending or contemplated. - We respectfully hold that the judgments on the points of law of any Hon’ble High Court on a Central legislation will have to be given precedence for arriving at the rationale compared to the decisions, where there is no question of law discussed. - CHA cannot find shelter in the submission that they had verified the IEC No. at the DGFT website. – Revenue’s submission is that this is not a substitute to physically verifying the existence of the exporter, when he acts as an agent for all purposes related to Customs - We are in agreement with his contention and hold that physical verification cannot be dispensed with by the CHA, when he acts for and on behalf of the importer or the exporter for all Customs matters. - we uphold the Commissioner’s order - C/1119/2008 - A/164/2009-WZB/MUM/C-II/(CSTB), - Dated:- 16-7-2009 - S/Shri A.K. Srivastava, Member (T) and Ashok Jindal, Member (J) Shri S.N. Kantawala, Advocate, for the Appellant. Dr. T. Tiju, JDR, for the Respondent. [Order per: A.K. Srivastava, Member (T)]. - This is an appeal again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (General) v. Burieigh International as reported in 2008 (226) E.L.T. 49 (Bom.), where the decisions of the Tribunal revoking the suspension were upheld. He also relied on the decision of the Tribunal in the case of International Shipping Agency v. Commissioner of Customs (General) Mumbai as reported in 2006 (196) E.L.T. 439 (Tri.-Mumbai). 4.3 The CHA had checked the details of the exporter from the DGFT website and thus had taken enough precautions to verify the genuineness of the exporter. 4.4 The CHA has been out of business for the last 11 months and the issue involved is also of livelihood of many people dependent on the CHA firm. He submitted that in the case of International Shipping Agency (cited supra), the suspension was vacated taking into consideration the "issue of livelihood" also. He also submitted that the enquiry is already initiated against the CHA and hence the suspension should be set aside pending final orders of the Commissioner after the enquiry proceedings were over. 5.1 The learned JDR submits that the role of a CHA should be seen in a macro perspective. He submits that as per the Customs Act, 1962 and the regulations made thereunder (CHALR, 2004), th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on the judgment of the Hon'ble High Court of Delhi in the case of Jasjeet Singh Marwaha v. Union of India and others as reported in 2009 (239) E.L.T. 407 (Del.) = 2009-TIOL-87-HC-DEL-CUS, wherein the Court has, in a similar matter, framed 4 questions of Law. The relevant paras are reproduced below: "2.1 By an order dated 12-11-2008, we had admitted the Appeal and framed the following substantial questions of Law: - "1. Whether any violation under the Customs Act, 1962 or imposition of penalty can be a ground to suspend Clearing House Agent License under regulation 20 of the Customs House Agents Licensing Regulation, 2004, without there being any violation of the provision of the said Regulations' 2. Whether the suspension order can be sustained solely on the basis of the confessional statement recorded under Section 108 of the Customs Act, 1962' 3. Whether the delay of 4˝ years on the part of the Department for not taking immediate action against the alleged violation would not cause the suspension order to be revoked' 4. Whether the clearing House Agent can be penalized for the mis-declaration, if any even though it is not his duty/obligation under the Customs Hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Customs (G), Mumbai v. Raj Clearing Agency as reported in 2006 (199) E.L.T. 602 (Bom.) has held in a question of law raised whether it is mandatory that in all cases of suspension, Regulation 22(1) need to be followed. The relevant part of Para 3 is reproduced hereunder: "We make it clear that the observations of the CESTAT that in all cases of suspension the procedure under Regulation 22(1) ought to have been followed in the sense prior notice before suspension ought to be given cannot be sustained. A bare reading of Regulation 20(2) very clearly indicates that where immediate action is necessary the Commissioner of Customs has been granted such a power to suspend such licence where an enquiry against such agent is pending or even contemplated. Accordingly we answer the aforesaid question of law to the effect that it is not mandatory that in all cases of suspension, Regulation 22(1) ought to be followed. Whereas in cases where immediate action is necessary the Commissioner of Customs is fully empowered to suspend the licence where an enquiry against such an agent is pending or contemplated as per Regulation 20(2)." Further, the Hon'ble Bombay Bench of CESTAT, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 24 of the Indian Evidence Act, 1872. In the instant case, the partner himself has confessed in a statement under Section 108 of the Customs Act that he has not taken the precaution of meeting the exporter personally to verify the genuinity and that he signed the documents for export and that his employee had attended the export formalities i.e. shipping bill processing, examination and EP copy (export promotion copy) passing on behalf of his firm. It was argued by the ld. JDR that the confession read with the Delhi High Court judgment, cited supra was enough for a suspension and that the CHA cannot run away from the vicarious liability for the deeds of its employees in relation to clearance work. 5.7 It is also the contention of the ld. DR that hardship or issue of livelihood of the employees of the CHA cannot be a ground for revocation of suspension. He has invited our attention to the decision of the Hon'ble High Court of Bombay dated 29-11-2006 in the case of Commissioner of Customs v. Worldwide Cargo Movers in the Customs Appeal No. 37 of 2006 and 39 of 2006, wherein it was held that: "Similarly, when one comes to the disciplinary measures, one must not lose sight o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Bombay in the cases Commissioner of Customs v. National Shipping Agency as reported in 2008 (226) E.L.T. 46 (Bom) and in the case of Commissioner of Customs (General) v. Buriegh International as reported in 2008 (226) E.L.T. 49 (Bom.), where the decisions of the Tribunal revoking the suspension were upheld. He has also relied upon the decision of the Tribunal in the case of International Shipping Agency v. Commissioner of Customs (General), Mumbai as reported in 2006 (196) E.L.T. 439 (Tri.-Mumbai). The ld. DR, on the other hand, has relied on the judgments of the Hon'ble Delhi High Court in the case of Jasjeet Singh Marwaha v. Union of India and others as reported in 2009 (239) E.L.T. 407 (Del.) = 2009-TIOL-87-HC-DEL-CUS and the Hon'ble Calcutta High Court decision in the case of Orient Clearing Forwarding Agency v. Union of India - 2001 (136) E.L.T. 3 (Cal.) to counter the same. We find that in both the decisions of the Hon'ble High Court of Bombay cited by the ld. Advocate, it was categorically held that "the questions of law would not arise", whereas in the case of Jasjeet Singh Marwaha, the Hon'ble Delhi High Court has framed 4 questions of law including "whether the dela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CHA cannot find shelter in the submission that they had verified the IEC at the DGFT website. He submitted that this is not a substitute to physically verifying the existence of the exporter, when he acts as an agent for all purposes related to Customs. He also drew our attention to the fact that the CHA himself had admitted in his statement under Section 108 that he had not taken necessary precautions for identifying the exporters and such action/inaction has resulted in a huge loss to the exchequer. We are in agreement with his contention and hold that physical verification cannot be dispensed with by the CHA, when he acts for and on behalf of the importer or the exporter for all Customs matters. 6.5 He further submitted that had the CHA been cautious and verified the genuineness of the exporter, this export fraud would not have happened. On the other hand, the representative of the CHA has attended all the export formalities and has still not brought this fraud to the notice of the Customs Department, as required by law. The CHA has handled export goods worth more than Rupees six crores pertaining to two fictitious exporters. We also find that the CHA is also made a party to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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