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TMI Blog1992 (9) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... d by them at Bombay, they got the C.H.A. Licence at Kandla. 3.3 The cause of action for revoking the said CHA Licence arose at Kandla on account of the following reasons. The appellants filed a Bill of Entry for Home Consumption on behalf of M/s. Kajaria Export Ltd., Calcutta seeking clearance of 5943.270 M.Ts. of Pig Iron, foundry grade valued over Rs. 1.15 Crore. The said B/E was filed on 21-9-1987 and got assessed free of duty against an advance Licence issued to M/s. Kajaria Exports under D.E.E. Scheme with an export obligation for utilisation of the imported Pig Iron in the manufacture of export goods, on the importer undertaking to fulfil conditions of Exemption Notn. 44/87. The goods were assessed free of duty under the above Notn. and allowed clearance by Kandla Customs. However, it is alleged that the officers of Kandla Customs, kept a watch over the clearances and noticed that the goods, instead of being dispatched to the five supporting manufacturers noted in the D.E.E.C. Licence, as per the condition of the licence for manufacture of export products, were actually transported to various parties in Ahmedabad, Rajkot, Bulsar, Bhavanagar, Anand, etc. Hence investigations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the said M/s. Damani Brothers have resulted in smuggling of pig Iron of foreign origin covered under B/E F-3757, dated 21-9-1987 imported by their clients M/s. Kajaria Exports Ltd., Calcutta inasmuch as the fact that the goods covered under the Advance Licence/DEEC book had been arranged to be sold in the open market in abuse of the concession, instead of feeding/supplying to the supporting manufacturers as listed in DEEC book issued by the licensing authority. 3.4 The following evidences have been cited in Annexure III to the S.C.N. (i) Statement of Shri A.C. Damani, working partner recorded under Section108 of the Customs Act on 28/10/1987. (ii) Statement dated 14-10-1987 given by Shri Laxman G. Tolani under Section 109 of the Customs Act on 21/10/1987. (iii) Statement of Yuvraj Shivalal Charan alias Ghadvi given under Section 108 of the Customs Act on 21/10/1987. (iv) Copy of Bill of Entry No. F. 3757, dated 21-9-1987 filed by the appellants on behalf of M/s. Kajaria Export. 3.5 In the enquiry conducted by the nominated officer, all the above three persons whose statements were cited as evidences as also two departmental officers, who were ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the enquiry before the enquiry officer. They had no opportunity to see them and offer their explanation. (iii) The Collr. has framed the question on abetment to smuggling and given a finding, whereas the articles of charge do not refer to such a charge. (iv) Hence, on the basis of depositions of the witness before the enquiry officer and based on the documents produced before him, the enquiry officer has come to the right conclusion. The Collr. by taking recourse to reference to the adjudication order passed by the Collr. in the connected Customs case, has come to erroneous conclusion of abetment of smuggling, which is not the allegation in the charge made. Moreover, even though the said adjudication order imposing penalty of Rs. 10,000/- was issued earlier to the issue of S.C.N. it was never referred to in the notice proposing revocation of the licence. Hence, the Collr. is not right in drawing conclusions based on that order of adjudication, without citing the same and without an allegation of abetment in the S.C.N. in the present proceedings. (v) Apart from the gross violations of these legal requirements, even on merits, the Collr s finding is not justified, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as proved. The Collr. has already given the benefit to the appellant in respect of Charge No. 2. Hence the findings of the Collr. of Customs Kandla are not to be disturbed. In so far as the revocation of the Licence at Bombay is concerned, there is no need for conducting another enquiry. The S.C.N. issued in this regard clearly spells out the misconduct resulting in revocation of their licence at Kandla and when the licence at Kandla has been revoked after due enquiry, another enquiry for cancelling the licence issued to the same persons at Bombay is not called for. It would suffice, if notice is issued and the principle of natural justice are complied with before cancelling that licence. 6. Our findings on the above submissions are as follows :- (i) While we can agree with Shri Srinivasan that delivery orders relied upon ought to have been cited in the S.C.N. or atleast introduced during the enquiry as evidences, the question to be looked in to this case is whether even ignoring the delivery orders, whether the charges at (1) and (3) could be held to be established. This is what we propose to do. (ii) On the question of the Collr. framing the question on abetment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground is rejected. 7. With these findings on the objections, on points of law raised by the ld. Consultant, we now proceed to determine whether the charge (1) (3) can be held to be proved. As for article of Charge (1), the allegation is that the appellants have failed to properly advise the importers about the requirements of D.E.E.C. Scheme and have also failed to bring the matter to the notice of the Customs at Kandla about the diversion of D.E.E.C. goods by the importers. We agree that the M/s. Kajaria Exports, being an export House, are expected to know the details of the Scheme and they, having executed the bond for agreeing to comply with the condition, do not need the advice of the C.H.A. In any case, the fact that all the formalities required for assessment and clearance of the cargo are properly complied with indicates that the proper advice and guidance must have been given by the appellants, prior to filing of documents for assessment. However, as regards the second part of this charge from the statements given under Sec. 108 cited as evidences in the S.C.N. as also those given before the enquiry officer, it is evident that they were aware of the diversion of D.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving the above finding, we are guided by the objective behind the creation of the institution of Customs House Agent. Anyone can not become a Customs Agent. He is to possess the requisite expertise and knowledge and guide the importers for proper compliance with the Customs laws. He is to pass the required examination, before his licence is made permanent. He not only acts as an agent of the importer, while presenting the documents before customs for assessment and clearance of the goods; but also acts as an aid to the Customs Dept in carrying out a prior scrutiny to ensure that they are in accordance with the law. When, as per the documents presented on behalf of the importer, the goods imported are to be sent to the supporting manufacturers or the importer s factory for production of export goods, of which the C.H.A. is very much aware, when he finds that instructions are received by him for delivery to various parties in Gujarat and not to the supporting manufacturers in Calcutta, the C.H.A. is expected to caution the importer of the consequences and he is required to inform the Dept. forthwith if that caution is not heeded by the importers. Since such a course of action has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the above analysis. We are therefore to confirm the order of revocation of the C.H.A. Licence by Collr. of Customs Kandla. But while doing so, we have asked ourselves the question whether the penalty of permanent disability by taking away the licence for ever would be justified in view of the following undisputed position. (i) There are no evidences of prior conspiracy with the importers in their arrangements for sale of D.E.E.C. cargo and the appellants were engaged only after import, as C.H.A. (ii) There is no evidence to show that the appellants had prior knowledge of the plan of the importers for diversion of imported cargo, while presenting the documents before Customs and getting them passed by Customs. (iii) The appellants did not act as transporting agents nor did they store the goods in their godowns, from where the goods were delivered to the different parties. (iv) They plead that they are having a good record for a period 30 years in Bombay and ever since they obtained the licence at Kandla, and this is the first occasion when they have been found at fault. (v) These are no evidences of their getting monetary gain out of the evasio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Licence issued at Bombay in terms of Regulation 21(c). The S.C.N. reads thus a quote Now therefore M/s. Damani Bros C.H.A. No. 11/438 are hereby called upon to explain as to why their act of Misconduct should not be viewed seriously by the Customs House in terms of the provisions of Regulation 21 (c) of the C.H.A. Regulations 1984. Though the serious view taken finally after considering the explanation to the S.C.N. may result in revoking the licence, there are also other courses specified in Regulation 21(10) namely suspension, revocation and ordering forfeiture of the security. Hence we are of the view that the special proposal of revocation ought to have been mentioned in the Show Cause Notice. Hence the order passed for revoking the Licence gets vitiated to that extent, which might call for a remand on that ground. But we are to take note of the fact that there is no allegation of misconduct on the part of be appellants in their dealing with the Bombay Customs House. The appellant are reportedly having a record for 30 years as C.H.A in Bombay Customs House without any such fault. Hence, even if we agree that order of revocation at Bombay can be justified, for the reasons s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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