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TMI Blog2016 (5) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation, 2013. Shri Naresh Makwana, G Card holder was running the appellants office in Mumbai. 3. As a result of certain investigations, it appeared that said Shri Naresh Makwana, G Card holder of the appellant, indulged in some alleged illegal activities in respect of imports made by one M/s. Abhay Enterprises in respect of clearances of the consignments of mobile phones and accessories. As a result, the appellants activities at Mumbai were suspended immediately. The appellants licence in Cochin was also suspended. Subsequently, however, after grant of personal hearing, the said order of suspension was revoked and the matter was referred for detailed investigations. As a result of detailed enquiry report, proceedings stand initiated against the appellant for revocation of their licence on the allegations that their G Card holder in Mumbai has contravened certain provisions of Customs Broker Licensing Regulations, 2013. 4. It is seen that the Commissioner in the present impugned order has exonerated the appellant from the allegations of violation of provisions of Regulation 11(d), 11(f) and 11(n). However, he revoked the licence of the appellant by concluding that he has sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant that he was associated with the clearances of the goods by Shri Naresh Makwana on behalf of M/s. Abhay Enterprises, neither is there any allegation nor any finding to the effect that he has abetted either his G card holder or the importer M/s. Abhay Enterprises in respect of any alleged illegal activities. The only ground adopted by the Commissioner is that he has sub-letted his licence to Shri Naresh Makwana and has thus violated the provisions of Regulation 10 of the said Customs Broker Licensing Regulation, 2013. 5. We find that admittedly Shri Naresh Makwana was a G Card holder, employee of the appellant. In terms of the provisions of Regulation 15, a person qualified in the examination referred to in Regulation 6 can be engaged by the Customs Broker for doing the work relating to clearance of goods. Engaging of the said qualified person has to be communicated by the Customs Broker to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, who shall be allowed to work in the customs station as a duly authorized employee on behalf of that firm or company. As such, as per the appellant the said Shri Naresh Makwana was a qualified person in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidences to show the involvement of the Customs Broker. The Honble Delhi High Court referred to the then provisions of Custom House Agent Regulations and Clauses 13 and 19 of the same. Clause 19 of CHA Regulation provided engagement of the person to assist the broker. The Honble High Court observed that when the CHA did not have knowledge about the illegal activity of the G Card holder and in the absence of any active or passive facilitation by the CHA, the serious punishment of revocation of the licence should not be adhered to. Accordingly, the Honble High Court observed that in the absence of any mens rea and the violations concerning the G Card holder, the extreme penalty of revocation of licence is not to be encouraged. By observing so, the Honble Delhi High Court set aside the majority order and restored the minority order setting aside the revocation of the licence. The said judgment of the Honble Delhi High Court was challenged by the Revenue before the Honble Supreme Court and was dismissed reported as Commission vs. Ashiana Cargo Services: 2015 (320) E.L.T. A175 (S.C.). 9. At this stage, we may deal with the contention of the learned DR appearing for the Revenue fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. It is pointed out that if Mumbai office is to run as the office of the appellant then there has to be proper supervision and control of the appellant, which was absent during the relevant period, which is proved from the facts of the record. 13. The impugned order consequently ordered revocation of the customs broker licence of the appellant issued by the Customs House, Cochin. The learned advocate, Mr. P. A. Augustian, appearing for the appellants, however mentions that as the appellant was running into losses and Shri Naresh Makwana came forward to run his office and give him business, the appellant therefore allowed him to run his office in Mumbai. The learned advocate points out that the mis-conduct which came to the appellant's notice later in respect of certain imports by M/s. Abhay Enterprises, it was the first instance and because of this mis-conduct, his licence was prohibited by the Commissioner of Customs, Mumbai, who issued the prohibition order thus not allowing him to operate under his licence in Mumbai. 14. From the facts, it is clear that there was no supervision, no control of the appellant on his Mumbai office and the activities of the G Card holder Shri Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant has been misused in the jurisdictional area of Mumbai Customs because of which their licence was suspended. The Commissioner of Customs, Cochin in his impugned order has treated this as a subletting of the licence which is a violation of Regulation 10 of the Customs Broker Licensing Regulation, 2013. After examination of full facts on record and the findings given in the impugned order, I am of the considered view that the appellant has been negligent and because of his conduct and activities of running unsupervised and uncontrolled office in Mumbai, the appellant has definitely violated the terms of the Regulation 10 of Customs Broker Licensing Regulation, 2013. Because of his actions, the appellant practically transferred his licence of Customs Broker to the G Card holder, Shri Naresh Makwana. Considering the above activities and operations in the jurisdictional area of Mumbai Customs, one cannot judiciously say that the appellant has not violated Regulation 10 of Customs Broker Licensing Regulations, 2013. 16. I find that impugned order dated 29.4.2015 has ordered revocation of the appellants Customs Broker Licence with forfeiture of whole of security deposited. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r application to the facts of this appeal. 16.4 It is important to note that above case laws have interpreted and applied the predecessor of the present Regulations on the subject namely Customs Brokers Licensing Regulations, 2013. The predecessor Regulations were called Customs House Agents Licensing Regulations, 2004. I find that Regulation 18 of the current Regulations namely Customs Brokers Licensing Regulations (CHALR), 2013 are almost similar to the Regulation 20 of the earlier Regulation i.e. the Customs House Agents Licensing Regulations, 2004 and the case laws quoted above, therefore, would be very much applicable to the present facts. 17. Considering the facts that the appellant has been completely out of his business and losing his earnings and livelihood for about last three months on account of revocation of his licence (which has also been a punishment for him) and when there was no mens rea involved on the part of the appellant in mis-use of the licence in Mumbai and the decisions pronounced in above cases (though the Hon'ble Bombay High Court order in the case of Shri Venkatesh Shipping Services Pvt. Ltd. supra says that it was restricted to the facts of that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, 2013. 18. It is made clear that regarding withdrawal of revocation of licence i.e. restoration of the licence of the appellant, I have agreed with the learned colleague Member (Judicial) but regarding the issue of "forfeiture of security", I have respectfully differed from her in the terms given above. (Major part of the Order pronounced in the open court) DIFFERENCE OF OPINION As both the Members dictated in the open court, the following Difference of Opinion was recorded in the open court : - Since there was a difference of opinion as regards the forfeiture of the security amount and since both the Members have agreed to set aside the order of revocation of licence, we accept the prayer of the learned advocate for restoration of the licence with immediate effect and the point of difference of opinion of forfeiture penalty can be resolved by the third Member. However, on going through the order sinned by the learned Member (Technical), it is seen that following differences of opinion emerge : - (i) When both the Members have set aside the revocation of the licence, whether the appellant's licence should be restored with immediate effect or the same would become o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se has been restored. The Hon'ble Court had also directed the Tribunal to dispose the appeal within three months from the date of receipt of judgment. The matter was posted for hearing before me (Third member) on 16-12-2015 at the regional Bench at Hyderabad, which was newly formed w.e.f 14-12-2015. The counsel for appellants sought adjournment on 16-12-2015. Thereafter, the case was adjourned to 19-02-2016 and was taken up on the same day. The time limit stipulated by the Honble Court could not be complied for the above reasons. 3. I have perused the order passed by learned Member (Judicial) Ms. Archana Wadhwa and learned Member (Technical) Shri Ashok. K.Arya and also the differences of opinion referred to me. The facts having been already narrated, I do not think it necessary to repeat the same. The difference of opinion referred also raises a little doubt and confusion as there is a hand written remark by the learned Technical Member, which reads as under: " regarding the difference of opinion X on page 16 not entirely represent the right position, later part I agree" 4. From the totality of all the differences of opinion I understand that both members agree that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons to assist him. The case of the appellant is that when the appellant was about to close the activities of Customs Broker in Mumbai, due to heavy loss and recurring establishment cost, Shri Naresh Makhwana put forward an assurance that he will make minimum business for meeting the running cost of Rs. 35,000/- per month. On such assurance by an experienced and qualified G-card Holder, the appellant agreed to continue operations in Mumbai and directed Shri Naresh Makhwana to supervise day to day activities as the appellant is in Cochin. That the appellants above statement was twisted by the department to the effect that Shri Naresh Makhwana was giving Rs. 35,000/- as commission and that appellant has sub-let the license to Shri Naresh Makhwana in return of the monetary consideration. The learned Member (Technical) has heavily relied upon the findings made in the impugned order to arrive at the conclusion that the license was sub-let and there is violation of Regulation 10 of Customs Brokers License Regulations, 2013 . 7. Whereas, the Learned Member (Judicial) has observed that the Commissioner has repeatedly referred to Shri Naresh Makhwana as the G-card Holder of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement. It is to be noted that the said retraction dated 20-10-2014 has not been countered or disproved by department. 9. Apart from the above discussed statement, on examination of evidence, there is nothing on record to arrive at the conclusion that Shri Naresh Makhwana paid Rs. 35,000/- per month to the appellant as consideration for sub-letting his license. There is no document evidencing the sub-let or the payment or promise to pay monthly consideration. The bank account of Shri Naresh Makhwana or the appellant have not been placed on record to show that there was any such monthly payment made by Shri Naresh Makhwana to appellant. Not even a single instance of payment of Rs. 35,000/- is proved. Thus the retracted statement of the appellant is not corroborated by any independent evidence. This has to be read together with the fact that the department issued notice to the appellant for the alleged imported consignment of M/s Abay Enterprises in which the documents were prepared and presented by Shri Naresh Makhwana. It is not disputed that there was a valid authorisation given by appellant to Shri Naresh Makhwana. When department has issued notice to appellant for documents pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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