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TMI Blog2011 (3) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... EYAN, JJ. Shri Prakash Shah, Advocate for the appellant. Smt. Sudha Koka, SDR for the revenue. Per Shri P. Karthikeyan This is an appeal filed M/s. DHL Lemuir Logistics Private Ltd. (DHL), a custom house agent (CHA) whose licence has been suspended under Regulation 20 (2) of Custom House Agents Licensing Regulations, 2004 (CHALR) vide the impugned order passed by Commissioner of Customs, Bangalore. Facts of the case in brief are that DHL used to handle clearance of consignments of tyres imported by M/s. Michelin India Tyres Pvt. Ltd. (MITPL) from China, Thailand etc. through Nhava Sheva port. Government imposed Anti Dumping Duty (ADD) on such consignments of tyres originating from, inter alia, China and Thailand under Notification No.12/2010 Cus. dated 19.02.2010. Rate of ADD varied depending also on the particular producer and exporter. Authorities at Nhava Sheva port found that DHL knowingly filed shipping documents showing M/s. Michelin Asia Pacific Import Export (HK) Ltd., Hong Kong (MAPIEHK) as exporter whereas the corresponding original documents had shown the exporter to be Transityre,BV,Netherlands(TBV). Other factors remaining same when MAPIEHK was sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts favour by its clients up to 26.10.2010. The Writ Petition filed before the Hon ble High Court of Mumbai is pending disposal. Vide Stay Order No.857/2010 dated 15.11.2010, this Tribunal stayed the operation of the impugned order till the disposal of the appeal filed by DHL. 3. In the appeal filed before the Tribunal, the impugned order is assailed on the following grounds. 3.1 The impugned order was based on the order of the Commissioner of Customs (General), Mumbai without conducting an independent enquiry into the facts and circumstances of the case. The said order had been passed in violation of the principles of natural justice. The adjudicating authority had relied on an order of the Commissioner of Customs (General), Mumbai which was similarly passed without hearing the appellant. Immediate suspension was a drastic action and no exceptional circumstances existed warranting such an order. The impugned order recorded details of the correspondence within the organization which clarified the correct provision of the notification prescribing ADD which applied to the goods involved and the correct course of action required to be followed by the importer. The impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de payment of ADD in violation of Regulation 13(d), (e), (n) and 19(8) of CHALR was unsubstantiated and incorrect. He invites our attention to paragraph 8 of the Order No.25/2010 wherein the Commissioner of Customs(General), Mumbai had recorded the correspondence between Shri Suresh Narayanan, Operation Manager, DHL and the Customs Brokerage and Clearance Division of DHL regarding the correct provisions of the relevant notification which applied to the consignment imported by MITPL and the clarification by Shri Subash, Manager, Compliance and Training, DHL. It was stated that the correct Sl. No. would be 13 and 17 of the table to Notification No.12/2010 Cus. dated 19.10.2010 for the impugned goods if imported from China and Thailand, respectively. He had also clarified that if the client insisted on Sl. No. 16, the impugned goods would be subject to duty in terms of Sl. No. 17 of the notification. The Commissioner also recorded in para 10 of the order that DHL had refused the suggestion by MITPL that DHL may make appropriate correction of the shipping documents. We are shown the internal e-mail wherein the staff of DHL were directed not to carry out corrections of the documents. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where an issue was raised, whether the government s opinion as to urgency had been formed in a manifestly arbitrary or perverse fashion without regard to patent, actual and undeniable facts, or that such opinion has been arrived at on the basis of irrelevant considerations or no material at all, or on materials so tenuous, flimsy, slender or dubious that no reasonable man could reasonably reach that conclusion. It is submitted that the impugned order called for interference by the Tribunal in the light of the above observations of the Apex Court. 6. The learned SDR defended the impugned order and submitted that the importer paid Rs.5 crore admitting the liability to duty evaded. The question was the role of CHA in the evasion attempted. After perusing the shipping documents, the CHA had intimated the importer that the impugned imports attracted higher ADD unless the notification was amended. She invited our attention to internal correspondence of DHL between Shri Danny Fernandes and Shri Amita Shedge endorsing copy to other executives wherein it was advised as under. Kindly take a print of the revised B/L, invoice and packing list of Michelin job 675326 attached herewith. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the documents originally submitted were different and did not entitle the assessee to obtain the benefit of lower ADD. 7.2 She submits that the letter dated 20.10.2010 received from Commissioner of Customs (General), Mumbai formed the investigation report envisaged under Regulation 20 (2) of CHALR. The impugned order was therefore passed satisfying the requirements of the relevant regulation. 7.3 She relies on the following judgments in support of the impugned order. (a) Orient Clearing Forward Agency Vs. UOI - 2001 (136) ELT 3(Cal.) In this judgment their Lordships of the Hon ble High Court of Calcutta had held as follows: 17. In the case therein, the said order was not on merely subjective satisfaction of the Collector, but ample reason had been given in the order itself indicating that he had bona fide exercised his power under sub-regulation (2) of Regulation 21. When the wide powers given to the Collector of Customs had not been misused or arbitrarily used and when such power has been exercised for immediate action, the Court is debarred from interfering with the order. Therefore such case is not helping the petitioner but the respondent authority of course, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble High Court upheld the order of immediate suspension under Regulation 20. The High Court went on to observe that it was not only for the CHA to ensure that the entries made in bills of entry were correct but also that a true and correct declaration of value and description of goods was made and in the event of any infraction such as mis-declaration of goods, he could be penalized under the Regulation 20 of CHALR, 2004 if it resulted in mis-conduct which was of the nature which rendered him unfit to transact the business of CHA at the customs station. (f) Sindhu Cargo Services Ltd. Vs. Commissioner of Customs, Coimbatore - 2006 (203) ELT 218 (Mad.) In this judgment, the Hon ble High Court held that an order passed under Regulation 20 (2) for suspending the license pending proceedings under Regulation 22 (1) could not be construed as a punishment and the power conferred under Regulation 20 (2) empowered the Commissioner to pass an order of suspension pending enquiry having satisfied that immediate action was necessary for the reasons mentioned in the order itself. 8. We have considered the various case laws cited by the learned SDR. We find that all the judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DHL. (i) DHL had full knowledge of manipulation of invoice, packing list, seaway bill / BL in order to evade payment of correct amount of anti-dumping duty. (ii) DHL also had in their possession copies of original and manipulated documents. (iii) DHL had advised the importer to evade payment of anti-dumping duty. He referred the matter to the Commissioner of Customs (General), Mumbai for considering suspension of CHA licence in terms of CHALR. 9.1 The Commissioner of Customs (General), Mumbai after conducting investigations recorded in his Order No.25/2010 dated 22.10.2010 that the importer had admitted forging the shipping documents and paid Rs.5 crore towards part of the differential ADD due from them and that such goods valued at Rs.5.8 crore had also been seized. He observed the sequence of events and involvement of staff of DHL and MITPL in the offending transactions in the paragraphs 8 9 of the order reproduced below. 8. On 8.8.2010, Operations Manager of DHL Lemuir Logistics P. Ltd. (DHL in short) Shri Suresh Narayanan by email requested for clarification from the Customs Brokerage and Clearance division of his company. Shri S. Subash, Manager, Compliance and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. The documents were manipulated to claim lower rate of ADD as against the correct amount of ADD of $ 88.27 and $ 99.05 per tyre set. As a result of above manipulation, total duty evaded was worked out to Rs.5.18 crores out of which Rs.5 crores has since been paid by the importer towards differential duty. 5. Further it has been reported that from the above facts and other material evidences such as statements recorded, emails, printouts of documents taken from computers of M/s. DHL Lemuir Logistics P. Ltd., it appears that the CHA had full knowledge of manipulation of documents submitted to the Customs, had in their possession copies of original and manipulated documents and had advised the importer to evade payment of anti dumping duty. Further it was also reported that the CHA has grossly violated Regulation 13 (d) of CHALR 2004 in as much as they have not only failed to advise their client to comply with the provision of the Customs Act but instead willfully colluded in perpetrating the fraud. The CHA has also acknowledged that the original invoice, bill of lading, sea way bill and manipulated copies of invoice, sea way bill, bill of lading were available with them and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvoice was initially by TBV Netherlands as reflected also in other shipping documents. The CHA was aware that the description Michelin Asia Pacific Import Export (HK) Ltd., Hong Kong was a later insertion. Though the appellant had initially intimated the correct legal position according to their understanding of notification to the importer, they kept silent and suppressed from the department the tampering of the documents resorted to by the importer for getting the goods assessed at inadmissible lower ADD. MITPL availed inadmissible benefit of lower ADD on the strength of amended shipping documents filed by DHL. Regulation 13 (d) of CHALR reads as follows: REGULATION 13.?Obligations of Customs House Agent. - A Customs House Agent shall (d) advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs; This provision clearly mandates that the CHA intimates the department any violation committed by the importer to obtain a benefit not authorized by law. In finding a violation of this provision, the fact whether the correction was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, the Commissioner of Customs may, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs House Agent whose licence is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs House Agent.] 11. The Commissioner is empowered to invoke powers in cases like this under Regulation 20 (2) of CHALR. In ordering suspension, the Commissioner relied on a report of Commissioner, Nhava Sheva. We find that there is no necessity of putting the party on notice of such action proposed and the material relied on. Suspension is not a punishment. The CHA gets adequate opportunity to present its case before the Commissioner at the post decisional hearing which the CHA is yet to attend pending these proceedings initiated by it. We have no doubt in our mind about the immediacy that necessitated the order. The order is competently and justifiably made. The civil consequences of such an order cannot be avoided. We reject the appeal. The Commissioner shall hear the CHA in ten days from today and pass orders under Regulation 20 (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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