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TMI Blog2012 (9) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... c intelligence by DRI that certain operators were engaged in the large scale import of high end cars/SUVs by adopting diverse modus operandi as detailed below to evade the appropriate Customs duty by mis declaration of new cars as old, misdeclaration of used cars as new cars, misdeclaration of the model, year of manufacture, etc., by tampering with the chassis/odometer etc., suppression of value of the accessories installed in the vehicles, which substantially enhances the value of the vehicles and misuse of vehicle imported under EPCG, etc. 4. In this connection, Shri Lalji Bhatia and Shri Rehman Sheikh were searched. During the course of that investigation, it was found that the bills of entry were filed by the appellant for customs clearance of the vehicle imported by the above operators in the name of 3rd parties. Thereafter, it was observed that the appellants were actively involved in the said fraudulent import of cars. During the course of investigation, it came to know that Shri K.S. More and Shri Sachin B Bugde were handling the Customs clearance on behalf of the appellants and they were having their independent firm in the name of M/s. Shree Shanta Ashish. Thereafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral), Mumbai reported in 2004 (163) E.L.T. 484 (Tri.-Mum.), Prakash Gawde v. CC (Gen.) Mumbai reported in 2006 (206) E.L.T. 465 (Tri.-Mum.), K.M. Ganatra & Co. v. CC (Gen.), Mumbai, reported in 2007 (219) E.L.T. 316 (Tri.-Mum.) & CC (Gen.) Mumbai v. K.M. Ganatra & Co. reported in 2010 (254) E.L.T. 454 (Bom). 7. On the other hand, the ld. AR strongly opposed the contentions of the Ld. Advocate and submits the charge of sub-letting and Regulation 13(d) and 13(n) has been proved against the appellant. The adjudicating authority has discussed the issue in detail and thereafter it has been arrived that there is a violation of Regulations 12, 13(d) and 13(n) and the impugned order is to be upheld. To support his contention he relied on the decision of OTA Kandla Pvt. Ltd. v. Union of India, reported in 2011 (269) E.L.T. 457 (Guj.). 8. Heard both sides. 9. On consideration of the submissions made by both sides, we have found that from the various statements of the persons, the inquiry officer held that the charges under Regulation 12 has been proved along with charges against Regulations 13(d) and 13(n). The DRI investigation was conducted on the basis of mis-declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is an admitted fact that the appellant has allowed Shri Vipual Shah to carry on business on monthly rental basis or a consignment basis which has resulted in fraudulent exports by his client whose credentials were not looked in to by the CHA. This cannot be considered as a mere commission agent being employed by the CHA. In fact no authorization from the customer in favour of the CHA is on record and the copy produced by the appellant is without any date and there is no evidence that it was procured before taking up the business of the exporters in question. On the other hand the appellants contend that the same was recovered by the DRI but could not show any panchnama to that effect. We find that the tribunal has in the case of Noble Agency held that the statement of defence witness that 'employer for whom he was working did not have CHA licence and that he was using licence of the noticee CHA on payment of monthly sums is sufficient to prove subletting of licence. This decision has been concurred with in the case of Nanda International v. Commissioner of Customs, Chennai - 2004 (176) E.L.T. 524 (Tri.-Chennai), the only difference being that since in latter case the licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Apex Court discussed in the case of Kaveri Coal Supplies v. CCE, Kanpur reported in 2011 (23) S.T.R. 35 (Tri.-Del.) wherein it is observed as under :- "8. 'We have also seen that in the case of Vivilon Textile Industries v. CCE, Raigarh this Tribunal vide order No. A/82 to 86/2011/C-II/EB, dated 10-2-11 has also observed as under :- "8. 'Further we have examined the issue in the case of Pramod Shah v. CC in Criminal application 4230/06 wherein the Hon'ble High Court of Bombay has observed as under :- "To say the least, the learned Additional Sessions Judge has committed a grave error in not following the binding precedent. The precedent does not cease to be binding merely because in the opinion of the learned Judge, the same is challenged in the Supreme Court and its operation stayed by the Supreme Court. In the decision reported in AIR 1992 Supreme Court Page 1439 in the case of M/s. Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras, the Hon'ble Supreme Court has very succinctly pointed out the difference between a judgment being quashed and set aside and its operation stayed by the higher court. The judgment being stayed does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tanbe, Managing Director of M/s. Anand Clearing & Forwarding Pvt. Ltd. in his statement recorded under Section 108 of the Customs Act, has stated that he had employed Sri. Sachin Bhaskar Budge who was a power of attorney holder of M/s. A.B. Consultants and his employees were holding Customs Passes as employees of M/s. A.B. Consultants, the bills were raised in the name of his firm and he was paying ₹ 15000/- per month to Shri. Barun Bhanot of M/s. A.B. Consultants for using his CHA licence. Shri. Barun Bhanot in his statement dated 4-11-2008 recorded under the provisions of the Customs Act has confirmed and corroborated the statements of Shri. Tambe and Shri. Sachin Budge and has also confirmed that the persons who handled the customs work using his licence were not his employees but the employees of M/s Anand Clearing & Forwarding. He has further admitted that he did not know any of the clients for whom the clearing work was done nor has he raised any bills on the customers and he received the payment of ₹ 15000/- per month from M/s Anand Clearing & Forwarding towards usage charges of his CHA licence. These statements given by the persons concerned make it amply clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charges imputed against the CHA stands proved without any iota of any doubt and I hold accordingly. 18. The hon'ble Member (Judicial) has come to the conclusion that since the appellant was debarred from operation in Mumbai since 12-12-2008, the punishment suffered is sufficient in the light of the decision of the Hon'ble High Court of Mumbai in the case of M/s K.M. Ganatra & Co. and has restored the operation of the CHA licence in Mumbai on forfeiture of security deposit of ₹ 25,000/-. I completely disagree with this finding for the reasons enumerated below. 19. What is evident from the records of the case is complete abdication of responsibility on the part of the CHA and misuse of the CHA licence for smuggling of cars by '(i) misdeclaration of new cars as old so as to claim substantial depreciation in value; (ii) misdeclaration of used cars as new cars to minimize duty liability (old cars attract higher rate of duty than new cars); (iii) misdeclaration of the model, year of manufacture, etc., by tampering the chassis/odometer, etc.; (iv) suppression of the value of accessories installed in the vehicles; (v) misuse of vehicles imported under EPCG scheme. Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his business or profession, it is subject to reasonable restrictions and conditions. In the present case, those conditions were already stipulated. In the case of Arvind Bhagat (supra), the order of the Madras High Court has been left undisturbed by the Apex Court. It was a case where the CHA had failed to discharge his obligation to exercise proper supervision. In the case of Sri Kamakshi Agency (supra), the CHA was held responsible for the fraudulent activities of a third party whom it had delegated its functions. That was also left undisturbed by the Supreme Court. Here, the CHA has brazenly defended his Regulation 8 employee who gave a fake name of his brother as importer for undervaluing the imported car. Thus, the employee of the CHA was party to the Firm. The CHA has not disowned him in the reply filed by him before the appellant. That being so, he is clearly responsible vicariously. 18. In our view, the Tribunal has committed a grave error in interfering with the decision of a domestic authority. In a departmental proceeding one has to see whether the principles of natural justice are followed and the findings are justified from material on record. Once both these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows:- "14. In view of the above principles laid down by the Hon'ble Supreme Court in various judgments, it clearly transpires that the judicial review of administrative action or of proportionality of punishment is permissible only if the decision of the decision maker is found to be illegal, unreasonable, irrational or suffering from any procedural impropriety, and that the High Court in exercise of jurisdiction under Article 226 or 227 should not interfere with the legal orders of Administrative Authorities. So far as the facts of the present case are concerned, as stated hereinabove, respondent no. 3, the CEGAT has upheld the order of respondent no.2, revoking the licence of the petitioner as CHA on the ground of petitioner having committed breach of statutory regulations and the misconduct by misusing its licence. In the opinion of this Court, once the decision of the respondent authorities that the petitioner committed violation of statutory regulations and the misconduct is found to be within the legal parameters, all the legal consequences as a result of such violation and the breach have to follow. The case of the petitioner being the case of contravention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng issues: (a) Whether the Member (Judicial) is correct in holding that when the charge under Regulation 13(a) has stands not proved. Consequently, the charges under Regulation 13(d) and 13(n) also stands not proved? (b) Whether the Member (Judicial) is correct in holding that the punishments suffered by the appellant is sufficient, following the decision of Hon'ble High Court of Bombay in the case of M/s. K.M. Ganatra & Co. (supra)? (c) Whether Member (Technical) is correct in holding that although the charge under Regulation 13(a) is not proved independently charge can be examined under Regulation 13(d) & 13(n) which has stands proved? (d) Whether Member (Technical) is correct in upholding the impugned order by debarring the appellant from operating from Mumbai Customs Zone under Regulation 20(c) of the CHALR, 2004, relying on the decisions of M/s. Wordwide Cargo Movers (supra), M/s. HB. Cargo Services (supra) & M/s. OTA Kandla Pvt. Ltd. (supra)? (Pronounced in Court on …………..) Sd/- (P.R. Chandrasekharn) Member (Technical) Sd/- (Ashok Jindal) Member (Judicial) 25. [Per : S.S. Kang, Vice-President]. - Heard both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mr. Rehman admitted his involvement in the import of used/stolen vehicles declared as new as also his complicity in the fraudulent import of vehicles under Transfer of Residence facility. The investigation was also conducted from the Customs House Agents in whose name, the Bills of Entry were filed for Customs Clearance of the Vehicles imported by the above operators in the name of third parties. The record pertaining to the clearance of imported cars where Bills of Entry filed by the appellant shows that the job of clearance under the Bills of Entry filed by the appellants were actually handled by Shri Krishna S. More and Shri Sachin B. Bugde. In their statements Shri Krishna S. More as well as Shri Sachin B. Bugde admitted that they were using the CHA licence belonging to the appellant for Customs clearance. It is also disclosed by them that Mr. Barun Bhanot, the proprietor of appellant firm is based in Delhi and given the Power of Attorney to Mr. Sachin B. Bugde to operate the business in the name of M/s. A.B. Consultants. Shri Barun Bhanot, the proprietor of the appellant firm in his statement also disclosed that he was receiving initially ₹ 10,000/- per month and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies Act, 1956 and proceedings under Section 433(e) for winding up of the company were initiated in the Hon'ble High Court of Karnataka. During the pendency of the proceedings under the Companies Act, the appellant company filed a reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and in these proceedings it was held that the company have become economically and commercially non-viable due to its huge accumulated losses and liabilities and should be wound up. The company filed appeal before the Appellate Authority for Industrial and Financial Reconstruction and the appeal was dismissed. Against the order passed by the Appellate Authority, the company approached the Hon'ble Delhi High Court and the Hon'ble Delhi High Court in the Writ Petition filed by the company issued notice and ordered the stay of operation of the order of the Appellate Authority. After the dismissal of the appeal of the company by the Appellate Authority, the winding up petition was taken up by the Hon'ble Karnataka High Court and the Hon'ble High Court of Karnataka proceeded with the matter in spite of the stay order passed by the Hon'ble Delhi High Court. The comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... get the benefit of the order passed by the Hon'ble Bombay High Court in the case as held by the learned Member (Judicial). 36. Further I find that the Hon'ble Supreme Court in the case of Union of India v. West Coast Paper Mills Ltd. reported in 2004 (164) E.L.T. 375 (S.C.) held that once an appeal is filed and the same is entertained the judgment of the lower authority is jeopardy the subject matter of the lis unless determined by the higher Court cannot be said to have attained finality. 37. Now I take up the other points of difference, i.e., (a), (c) and (d) above. 38. The main contention of the appellant is that as the violation of Regulation 13(a) is not proved as per the Inquiry Officer's report, therefore the charges for violation of Regulations 13(d) and 13(n) will also not sustain. 39. I find that the main charge is for violation of Regulation 12 of the Regulations. Regulation 12 provides as under : "Regulation 12. Licence not transferable. - Every licence granted or renewed under these regulations shall be deemed to have been granted or renewed in favour of the licensee, and no licence shall be sold or otherwise transferred." 40. The readi ..... 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