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TMI Blog2004 (12) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... f attracting higher rate of duty. The goods were examined, statements by the importer and the CHA were recorded and, on the basis of the results of investigation, the DRI booked a case of misdeclaration and undervaluation of goods against the importer, M/s. Rising Star Enterprises. The show-cause notice issued in this connection to the importer has been adjudicated by the Commissioner of Customs (Exports) as per Order-in-Original No. 2371/2004, dated 23-6-2004 wherein, the goods covered by the aforesaid Bill of Entry stands absolutely confiscated under Section 111(d) of the Customs Act and a penalty has been imposed on the importer under Section 112(a) of the Act. It appears, the above show cause notice had not proposed any penalty on the CHA. From the role played by the CHA for clearing the above consignment, it appeared to the Commissioner of Customs (Seaport), the respondent herein, that the CHA had indulged in violation of the Customs House Agents Licensing Regulations, 1984 (hereinafter referred to as CHALR) warranting immediate punitive action. The Commissioner, accordingly, by an order dated 18-9-03 suspended the CHA licence pending investigation. This order of the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... li Babu. (e) The CHA's letter dated 4-7-2001 issued to Shri S. Mazhar Ahmed. We have also taken judicial notice of Order-in-Original No. 2371/2004 passed by the Commissioner of Customs (Exports), Chennai. We have also considered the submissions made by ld. Counsel for the appellants and ld. JDR for the respondent. 3. Ld. Commissioner of Customs (Seaport) has found that the appellants did not comply with obligations under Regulations 14(a), 14(b), 14(d), 14(e), 14(l), and 20(7) of the CHA Regulations. He has accepted the enquiry officer's recommendation. Though there is a grievance noted in the memorandum of appeal that the enquiry officer did not give sufficient notice to the appellants, it was not pressed at the Bar. The Counsel's arguments were on merits. The challenge to the Commissioner's findings, which was summerised in ground No. (k) of the grounds of the appeal, was reiterated and elaborated by the Counsel. Ground (k) is reproduced below :- "k. The appellants submit that the respondent has alleged that the appellants had not complied with various obligations set out in Regulation 14 of CHALR. In terms of 14(a) there is no violation as their own employee has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his partner equally; that he had arranged G - Card, Harbour Entry Photo Permit and Airport Entry Permit for Shri J. Dilli Babu and Shri S. Mazhar Ahmed of M/s. Esteem Shipping Agency as "Managers" of the CHA firm in furtherance of the aforesaid understanding between the CHA and M/s. Esteem Shipping Agencies. Shri Dhanraj categorically stated that Shri Dilli Babu and Shri S. Mazhar Ahmed were not employees of the CHA firm and that identification cards were arranged for them only to facilitate customs clearances of their customer M/s. Esteem Shipping Agencies (vide answer to question No. 3). He further stated that he did not have any knowledge about the import or importer of the consignment covered by Bill of Entry No. 512952, dated 23-7-2003. He added that the power-of-attorney holder Shri S.T. Natarajan also did not have any such knowledge as he only signed blank annexures and it was Shri Dilli Babu and Shri S. Mazhar Ahmed, employees of M/s. Esteem Shipping Agencies, who filed the annexures (vide answer to question No. 4). It was also stated by Shri Dhanraj that his firm had indulged in the above activities only for monetary benefit and to fulfil the target of customs clearances f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed M/s. Esteem Shipping Agencies to file the Bill of Entry in their (appellants') name. The annexures filed with the Bill of Entry were signed by Shri Natarajan (power-of-attorney holder). Both S/Shri Dhanraj and Natarajan admitted that they did not know anything about the import or importer of the consignment in question and that the persons who filed Bill of Entry and connected documents with the Customs were not employees of the CHA firm. Admittedly, Esteem Shipping Agencies had no CHA licence of their own. It was also admitted by S/Shri Dhanraj and Natarajan that there was an understanding between the appellants and Esteem Shipping Agencies that the Bills of Entry and other import documents in respect of consignments imported by the latter's clients would be signed by the former for monetary consideration. Admittedly, the appellants received Rs. 17,000/- per month from Esteem Shipping Agencies for such transactions. This activity of the appellants was in gross breach of provisions of the CHA Regulations. As it was admitted by Shri Dhanraj that the CHA firm had no knowledge of any details of the subject consignment or of its importer, it has to be held that they had signed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments only when Esteem Shipping Agencies filled in the blanks. In the hands of the appellants, the papers were blank and not documents envisaged under Regulation 14(l). Therefore, the appellants cannot be held to have discharged their obligation under Regulation 14(l). Regulation 20(7) made it obligatory for the CHA to ensure proper conduct of his employees in the transaction of business as CHA. In the present case, none of the employees of the CHA transacted any business with the Customs Authorities in respect of the consignment in question. Therefore, the appellants had no occasion to supervise conduct of their employees in the transaction of business as CHA. Their having signed blank annexures for another agency is not a "transaction of business as CHA". Hence, the burden cast on them by Regulation 20(7) was not discharged. We are, thus, in full agreement with the Commissioner's finding that the appellants failed to discharge their obligations under the aforesaid Regulations. 4. Counsel has argued that the order of the Commissioner suspending the CHA licence for a period of three years and ordering forfeiture of the security deposit of Rs. 25,000/- is a disproportionate pun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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