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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 ..... stoms 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 Rs. 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 Rs. 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 without prejudice to any other action that may be taken against the noticees under this Act or under any other Act for the time being in force in the Republic of India." 2.1 Appellants challenged the order of the Commissioner before High Court of Kerala, Ernakulam by way of Writ Petition No.226 of 2019. High Court vide its order dated 12.02.2019 decided the matter giving following directions: "2. We had kept t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 what was the benefit that would have accrued to the company, as such, for the reason of manipulation of the seals and signatures; no finding has been referred in this regard. vii. submissions made during cross-examination of various officers and witnesses show that even such manipulation of seals and signatures would not have impacted the physical examination and clearance of the crew. viii. even if it is assumed without any admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 appellants. Among other employees, Mr. Joakim Yesudasan and Mr. Antony Sijo worked for the appellants. 4.3 During the course of preliminary enquiry, it was observed that signatures of Shri P. Gopinathan, Superintendent of Customs and Shri Ritesh Kumar Singh, Inspector of Customs and the seal of Preventive Department on the documents submitted by the appellants for sign-on the vessel MV Varada V004E appeared to be forged. Thereafter, detailed investigations undertaken and it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies 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 and which is enough for the cancellation of the registration granted and penal action against them. 4.9 Sections 34, 42 and 98 of Customs Act provides as follows: SECTION 34. Goods not to be unloaded or loaded except under supervision of customs officer. - Imported goods shall not be unloaded from, and export goods shall not be loaded on, any conveyance except under the supervision of the proper officer : Provided that the Board may, by notification in the Official Gazette, give general permission and the proper officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds 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 the provisions of these Sections has been contravened in the present case. Secondly, how appellants were responsible for such contravention. 4.11 Similarly, how provisions 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. 4.12 Section 98 is making applicable provisions of certain Sections for coastal goods where the appellants are dealing in relation to such coastal goods has not been brought on record. The clearance of the crew is done under Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 4.20 Next question that comes for consideration is whether the appellants should be held vicariously liable for the act of manipulation of the documents by their employees. In our view because of Master Servant relationship such vicarious liability shall follow. Same view has been expressed by the Madras High Court in case of Chandra CFS Terminal Operators P Ltd {2015 (326) ELT 122 (MAD)] "123. It cannot be heard to say that the appellant was not aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 licence for a period of time would be sufficient. That would be in a somewhat similar position to that of suspension of licence though it may not be so in all cases. On the other hand, there may be cases where the authorities may be of the view that licencee does not deserve a renewal either. Position would be different there. Though we have not dealt with the question of proportionality, it is to be noted that the authorities while dealing with the consequences of any action which may give rise to action for suspension, revocation or non-renewal have to keep several aspects in mind. Primarily, the effect of the action vis-a-vis right to carry on trade or profession in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken 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 revocation of license for this contravention of the CHA Regulations unjustly restricts the appellant's ability to engage in the business of the CHA for his entire lifetime. As importantly, it skews the proportionality doctrine, substantially lowering the bar for revocation as a permissible penalty, especially given the dire civil consequences that follow. On the other hand, the minority Opinion of the CESTAT, delivered by the Judicial Member, correctly appreciates the balance of relevant factors, i.e. knowledge/mens rea, gravity of the infraction, the stringency of the penalty of revocation, the fact that the appellant has already been unable to work his license for a period of 6 years (now 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not expressively mentioned. Section 117 are reproduced below: "SECTION 117. Penalties for contravention, etc., not expressly mentioned. - Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding [one lakh rupees]." In our view, a penalty under Section 117 would suffice to deter the happening of similar incidence in future. 5. In the result, we allow the appeal filed to the extent of cancellation of registration of the appellants. Apart from such modification, we uphold the penalties imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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