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TMI Blog2019 (2) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Section 42(2) have been contravened is not clear. It is not the case of the Commissioner in adjudication order that vessel MV Varda V 0004E had sailed without written permission from the Custom officer. The case of the department is to the effect that certain documents on the basis of which crew has been cleared were manipulated at the initiation stage, but were presented to the custom officers for the clearance of crew. The crew was in fact cleared on the said documents after proper and physical examination - In the cross-examination, the officers had admitted that no person has boarded or de-boarded the vessel nor any cargo loaded or unloaded without actual physical verification and explicit approval of the Customs Department. It is settled principle in law that procedures prescribed for performance of duties assigned under the law or the rules/ regulations made under the law should be respected and followed. Any person who has been assigned the duty under provisions of law and found manipulating the same is liable to punishment. However the punishment should be proportionate to the offence committed. Whether the appellants should be held vicariously liable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Steamer Agent, Console Agent and Shipping Line Agent under this Commissionerate is cancelled/revoked on account of the violation of provisions of the Customs Act, 1962 which amounts to a violation of condition under which the said registration was granted. (ii) I impose a penalty of ₹ 50,000/- on M/s. MBK Logistix Pvt. Ltd. under the provisions of Section 117 of the Customs Act, 1962. (iii) No separate penalty is imposed on Shri Santhosh Kumar, Senior Manager, M/s. MBK Logistix Pvt. Ltd. as the firm has been imposed penalty under Section 117 of the Customs Act, 1962. (iv) No separate penalty is imposed on Smt. Anita Prabhakaran, Managing Director, M/s. MBK Logistix Pvt. Ltd., as firm has been imposed penalty under Section 117 of the Customs Act, 1962. (v) I impose a penalty of ₹ 50,000/- on Shri Joakim Yesudasan, Andhakaranazhi, P.O., Cherthala, Alappuzha 688 531 under the provisions of Section 117 of the Customs Act, 1962. (vi) I impose a penalty of ₹ 25,000/- on Shri Antony Sijo, Velipparambil House, Palluruthi, Ernakulam 682 006 under the provisions of Section 117 of the Customs Act, 1962. (vii) This order is issued wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant as such was not aware or had in any way has directed any of its employees for the misconduct by them. Commissioner has in his order exonerated the Senior management of the Company and has not imposed any penalties on Ms Anita Prabhakar Managing Director and Shri Santosh Kumar Senior Manager working with them. Penalties have only been imposed on two officers against whom the charge of stealing the Custom seal and manipulating the documents has been made. They are not opposing the penalties on the said employees or in any way justifying their acts or conduct; iii. the consequence in terms of cancellation of registration to operate as shipping line agent is disproportionate to the offence for which they have been penalized; iv. by referring to series paragraphs in the order he showed us that company as such was not responsible for various offences committed. v. para XIVA to show that Commissioner himself has held that Shri Joakim Yesudasan, staff of the firm was responsible for the misconduct of stealing and modifying the custom seal and also for forging the signatures of the Custom Officers; vi. in the entire proceedings, the Commissioner has in no way pointed out w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of offence committed by the appellants and moral obligation/ vicarious liability of the respondent, the registration of appellants to operate in Cochin Port has been cancelled; v. all other Ports at which he was operating informed for similar action. vi. Madras High Court in the case of Chandra CFS Terminal Operators P. Ltd. vs. CC, Chennai-VIII: 2015 (326) ELT 122 (Mad.) and Bombay High Court in the case of CC (General) vs. Worldwide Cargo Movers: 2010 (253) ELT 190 (Bom.), has upheld the action of suspension of license of the employer for the acts of the employees. vii. Accordingly, he supported the cancellation of registration and the penalty imposed upon the appellant. 4.1 We have considered the submissions made in the appeal and during the course of arguments, 4.2 Appellants have been transacting their business as Console Agent, Shipping Agent and Shipping Line Agent as per registration granted by the Commissioner of Customs, Cochin on the basis of procedure laid down in Board Circular No.30/2004-Cus. dated 16.4.2004. Appellants were operating through Smt. Anita Prabhakar as Managing Director and Shri Santhosh Kumar as the Senior Manager for the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f notice under this section, the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed. 4.7 A show-cause notice under Section 124 is adjudicated as per Section 125 of the Customs Act. Section 125 of the Customs Act provide for confiscation of the goods and for redemption of the same on payment of redemption fine invoked. A proceeding under Section 124 could have led to the cancellation of the registration issued to the appellant for undertaking various activities in the Port. 4.8 Commissioner has recorded that Mr. Joakim Yesudasan by forging the sign on documents have contravened the provisions of Section 34 of the Customs Act and by producing the said documents for clearance of the vessel, provision of Section 42(2)(c) of Customs Act also got contravened. Thereby contravening provisions of Section 42(2)(b) for the act committed by the said employee, Commissioner holds that appellant responsible for submission of forged documents for clearance of vessel and hence, was the beneficiary of the said forged act. Commissioner states that accordingly, he holds appellants contravening the Sections 42(2), 34 ibid Section 98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied that it is not practicable to unload such goods, the person-in-charge of the conveyance has given an undertaking, secured by such guarantee or deposit of such amount as the proper officer may direct, for bringing back the goods to India. SECTION 98. Application of certain provisions of this Act to coastal goods, etc. - (1) Sections 33, 34 and 36 shall, so far as may be, apply to coastal goods as they apply to imported goods or export goods. (2) Sections 37 and 38 shall, so far as may be, apply to vessels carrying coastal goods as they apply to vessels carrying imported goods or export goods. (3) The Central Government may, by notification in the Official Gazette, direct that all or any of the other provisions of Chapter VI and the provisions of section 45 shall apply to coastal goods or vessels carrying coastal goods subject to such exceptions and modifications as may be specified in the notification. 4.10 From the reading of the said Sections, it is evident that Section 34 provides that no goods should be loaded or unloaded on a vessel except under supervision of a Customs Officer. In his order, Commissioner has not shown in how and what manner th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, cheese, cosmetics and other petty gift items for their personal or family use which shall not exceed the value of one thousand and five hundred rupees. 4.17 In terms of the said Rule, Crew Clearance is done and on the basis of which documents relating to baggage declaration of crew is made on the form which is facilitated by the shipping agent/ shipping line agent. Shipping line agent only facilitates the clearance of crew whereas actual clearance of crew is done by the Customs Officers at the port. 4.18 It is not even the case of the Commissioner that in garb of the forgery undertaken by the employees of appellant, crew was found carrying goods beyond their entitled baggage allowance. It is also not the case of the Commissioner that the crew was found carrying certain prohibited / restricted goods in person. In the absence of any such finding, a drastic action of cancellation of registration to operate in the Port is highly disproportionate to the offence alleged. 4.19 It is settled principle in law that procedures prescribed for performance of duties assigned under the law or the rules/ regulations made under the law should be respected and followed. Any person wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that licence would be for a particular period inoperative. An order of revocation would mean that licence is totally inoperative in future, it loses its currency irretrievably. Obviously, suspension/revocation, as the case may be, has to be directed looking to the gravity of the situation in the background of facts. For minor infraction or infraction which are not of very serious nature order of suspension may suffice. On the contrary, when revocation is directed it has to be only in cases where infraction is of a very serious nature warranting exemplary action on the part of the authorities, otherwise two types of actions would not have been provided for. Primarily it is for the Commissioner/Tribunal to decide as to which of the actions would be appropriate but while choosing any of the two modes, the Commissioner/Tribunal has to consider all relevant aspects and has to draw a balance sheet of gravity of infraction and mitigating circumstances. The difference in approach for consideration of cases warranting revocation or suspension or non-renewal has to be borne in mind while dealing with individual cases. In a given case the authorities may be of the view that non-renewal of lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gled), no additional blame can be heaped upon the CHA on that count alone. Rather, the only proved infraction on record is of the issuance of G cards to non-employees, as opposed to the active facilitation of any infraction, or any other violation of the CHA Regulations, whether gross or otherwise. Neither have any such allegations been raised as to the past conduct of the appellant, from the time the license was granted in January, 1996. Equally, it is important to note that the appellant has - as of today - been unable to work the license for 8 years, and thus been penalized in this manner. This is not to say that the trust operating between the Customs Authorities and the CHA is to be taken lightly, or that violations of the CHA Regulations should not be dealt with sternly. A penalty must be imposed. At the same time, the penalty must - as in any ordered system - be proportional to the violation. Just as the law abhors impunity for infractions, it cautions against a disproportionate penalty. Neither extreme is to be encouraged. In this case, in view of the absence of any mens rea, the violation concerns the provision of G cards to two individuals and that alone. A penalty of rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsh penalty and the punishment should commensurate for guilty of offence. Therefore, the order of the Commissioner of Customs revoking the CHA licence as confirmed by the CESTAT is set aside. 14. By this order, this Court only restore the CHA licence. However, forfeiture of the security deposit is concerned, there is a violation of CHA regulation by the appellant. Interest of justice would be met by restoring the CHA licence and confirming the order of forfeiture of security deposit. 4.26 We also take note of the fact that for last four year, appellants have been awarded best Steamer Agent in Cochin Port. Copy of such awards given to them have been placed at page 27, 28, 29 and 30 of the Paper Book. Looking into the past records of the Department itself appreciating the performance of the appellants, we are of the view that act of cancellation of registration is highly disproportionate to the offence alleged. 4.27 However, we hold that penalty under Section 117 which have been imposed is necessary to deter appellants or for that matter anybody else to indulge into such activities in future. Section 117 of the Customs Act provided for penalties for contravention n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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