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M/s. Ashiana Cargo Services v/s Commissioner of Customs (Import & General), New Delhi

    Customs Misc. Application No.587 of 2011, Customs Appeal No.661 of 2007

    Decided On, 17 January 2012

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi


    For the Appellant: L.P. Asthana, Advocate. For the Respondent: Sonal Bajaj, SDR.

Judgment Text

Per Archna Wadhwa (for the Bench), J.

1. Vide impugned order the Commissioner has suspended the appellants licence of CHA, issued to them in the year 1996-97 in terms of Custom House Agent Licence Regulation 1984.

2. As per facts on record, the appellant procured G Card in the name of Shri Naveen Mishra and Shri Jawed Kamal. In the case of inquiry being conducted in respect of fraudulent export of prohibited narcotics drugs by M/s. V.K. International, it came to fact that the said two G card holders were infact employees of M/s. V.K. International Pvt. Ltd., a freight forwarding company. Further investigations were conducted and statement of appellants representative were recorded. It stands established that Shri Naveen Mishra and Shri Jawed Kamal were not the employees of the proprietor and G card was procured by the appellant in their name by mis-representing as his own employees. He also received a consideration of Rs.15,000/- for obtaining said G cards from M/s. V.K. International.

3. In the above background, proceedings were initiated against the appellants by way of show cause notice dated 30.3.05 proposing to suspend their licence immediately in terms of Regulation 20(2) of the Custom House Agent Licence Regulation. The appellant vide his letter dated 1.4.2005, in reply to the show cause notice admitted that the said two G card holders were the employees of M/s. V.K. International. However, he submitted that they were not aware of the fact that M/s. V.K. International was engaged in exporting narcotics. They acted in a bonafide belief that the said M/s. V.K. International needs their help in business as freight forwarder. As such, they submitted that inasmuch as the appellant was not in direct contact with M/s. V.K. International and there is no record reflected upon their knowledge of export of narcotics, the lapse on their part be condoned.

4. The adjudicating authority, by holding that there is no dispute that the said CHA has lent overt /covert support in subletting his CHA agency by obtaining G cards for such persons who were not his employees and were not eligible G card holders un abashedly indulged in fraudulent exports of narcotics drugs. The fraudulent act on the part of CHA warrants for immediate and stern action against him. For violation of the provisions of Regulation 13 of CHALR, 1984 read together with Regulations 13(b), 13(e) and 19(8) of CHALR, 2004, the suspension of his licence is required as continuation of the same would be against the public interest. He accordingly, ordered for suspension with immediate effect.

The said order is impugned before us.

5. Shri L.P. Asthana, learned advocate appearing for the respondents submits that appellant was given provisional licence in January, 1996 which was converted into a regular CHA licence in January, 1997. The appellant has worked for 9 years handling number of export consignments and has unblemished record as there has been not a single instance of the appellants indulging into any irregularity. M/s. V.K. International was a freight forwarding company and approached the appellant for procurement of G card for two of their employees against the consideration of Rs.15,000/-. The appellant under a bonafide belief that the said requirement of M/s. V.K. International was a genuine business requirement, procured the G cards for two of their employees. He submits that there is no finding or evidence or any averment to the effect that the appellant was aware of the clandestine activities of M/s. V.K. International or in any way dealt with the shipping bills filed by M/s. V.K. International. He submits that there is a finding of fact by the Commissioner that the appellant was not involved in the export of Narcotics and as such submits that mere procurement of G card for two employees of M/s. V.K. International under a bonafide belief should not result in suspension of the licence.

6. Learned Advocate has also drawn our attention to various decisions of the Tribunal in support of his submissions that at the most the appellants act can be said to be negligence per se but not culpable negligence. He submits that the Tribunal in the case of Sanco Trans Ltd. vs CC Bangalore reported as [1996 (83) ELT 557 (Tri)] has held that the difference between the negligence and culpable negligence has to be kept in mind and a mere admonition in such cases would meet the ends of justice when the appellants bonafide are not doubted. The appellants clean record of reputation for the last number of years, without any breach or contravention of any rules have to be kept in mind. Similarly, he draws our attention to the decision in the case of A.N. Bhat vs. CC reported as [1991 (55) ELT 580 (Tri)] in support of his plea that the licence stand cancelled for the last 6 years which should be considered to be a sufficient punishment for the negligence on the part of the appellants. He submits that the punishment should be commensurate with the offence and the appellant as an old person having no expertise in any other line and have been out of job for the last 6 years and has been at the brink of starvation. The cancellation of licence deprived him from his means of livelihood. He further submits that security deposit of Rs.50,000/- has also been forfeited. Accordingly, he prays for setting aside of the impugned order and reviving the appellants licence.

7. After hearing the learned DR for the appellant, we find that it is an admitted fact by the appellant that he procured the G card for two employees of M/s. V.K. Internationall, which amounts to contravention of the provisions of Customs House Agent Licence Regulations,1984. However, we find that apart from the above observation, there is no finding nor any allegation to the effect that the appellant was aware of the mis-use of the said G cards by M/s. V.K. International. The appellants have requested for a lenient view on the ground that for a period of around 6 7 years during which the appellant was working as a CHA, there was no contravention of any law by him. This was the first punishment suffered by the appellants and suspension and subsequent revocation of licence is too harsh punishment. The appellant has suffered for a period of 6 years and is ready to give any undertaking to work diligently in the future years.8. Keeping in view the contravention committed by the appellant, we find that the suspension and subsequent revocation of his licence is too harsh a punishment to be awarded to him. The revocation of licence has the effect of taking away the means of livelihood of that person for the rest of his livelihood. The same effects not only the person concerned but his family as also the staff, workers of CHA. Keeping in view that the appellant was not directly connected with the illegal export and did not have any knowledge of mis-use of G cards, we think it fit to hold that suspension and revocation of his licence for the last 6 years is sufficient and adequate punishment for the contravention committed by him.This has been the ratio of many decisions relied upon by the appellants. Some reference can be made to the judgement of the Tribunal in the case of C.J. Joshi & Sons vs. CC Kandla reported as [1999 (113) ELT 900 (Tri)] as also to the case of Trans Shipping Service vs. CC Mumbai as reported in [2004 (163) ELT 484 (Tri)], as also the Tribunal’s decision in the case of Samrat Shipping Services vs. CC, Mumbai as reported in [2007 (213) ELT 103 (Tri-Mum)]. By following the ratio of the said decisions and by taking into account the appellant has been out of job for the last 6 years, we set aside the impugned order of suspension of his licence and restore the licence subject to the condition that any fraud of CHA Regulation in future would be viewed strictly by the officers and may result in forfeitation of his licence forever.9. The appeal is disposed of in above terms.

10. I have gone through the case records and the order recorded by Ld. Member (Judicial) and since I am not agreeing with the order I am recording this separate order.

11. The facts have been recorded by Ld. Member (Judicial). The question to be considered is whether the act committed by the Appellant as a Custom House Agent, is serious enough to warrant cancellation of his license as a Customs House Agent or whether it is not so grave in nature. The second issue to be decided is whether keeping the appellant out of his job for more than six years as a Customs House Agent is a good enough punishment and whether the cancelled license can be restored now for that reason.

12. The misconduct on the part of the appellant is that he helped two persons to get ‘G card’ as per provisions of Regulation 3 (b) of Customs House Agents Licensing Regulations, 2004 (‘CHALR for short) declaring those persons to be employees of the appellant’s firm when the persons were actually not his employees and those two persons helped somebody to smuggle narcotics out of the country. The case records do not show that the Appellant had knowledge about the plan of those two persons either at the time of helping them to get G cards or later. So the appellant pleads innocence or less culpability.

13. The issue is that the job of a Customs House Agent is that of trust as in the case of any agent. He is acting as agent of the Customs House as well as agent of the exporter or importer. The license granted under Regulation 8 of CHLAR is for helping members of the public as well as the Customs House in activities relating to import and export within or in the vicinity of the customs area. So naturally he and his employees have apposition of trust with customs officers and also have access to sensitive places which access can be misused for smuggling of goods. The license cannot be seen as a means to earn rental income either by giving blank signed Shipping Bills or Bills of Entry for a specific consideration or to help some persons to get G cards and thereby gain trust of customs officers and also access to the customs areas so that he can do mischief. It is the bounden duty of a Customs House Agent to employ persons of dependable character and to continuously supervise them and also not to authorize anybody else to represent him before the Customs House without his knowledge. In this case he has helped two persons to get G cards stating that they were his employees. He should have known the seriousness of the matter. I do not accept the argument that it was an innocent mistake. If a person is so innocent as to do such an act it is only proper that he is not allowed to continue as a CHA because it is not known what type of problems he will cause later in an ‘innocent manner’.

14. The argument that cancellation of his license has denied him his means of livelihood and hence it should be restored is also is not a sound argument. Such an argument makes sense while considering an appeal against a suspension order and not while considering an appeal against a cancellation order being considered after more than 6 years. The Appellant should have been doing other jobs during these years. Even before the cancellation of his license he was seeking rental income from his license. When the appellant engages his employees against payment of money instead of paying the employee, the intention is clear. A message is sent that the so called employee is

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given an opportunity to do whatever he wants using the identity card to earn his livelihood. Now after a break of six years, when he has to restart his business, the risk of such behavior is higher and I am of the view that this is not a fit case where license can be restored. 15. The theory that keeping the person out of his activities for about six years is a sufficient punishment is not a correct argument because there is no such law in the matter. Depending on the facts of a particular case, Tribunal has decided so in some cases. But that cannot be a general rule. In this matter the Commissioner of Customs should be a best judge as decided by the Andhra Pradesh High Court in the case of CCE Vs HB Cargo Services reported in 2011 (268) ELT 448 (A.P.) and is not a fit case for the Tribunal to interfere with the decision. So I am of the view that there is no reason to restore the license of the Appellant. 16. POINT OF DIFFERENCE IN VIEWS OF THE MEMBERS Whether in the facts and circumstances of the case the Customs House Agents License granted under Regulation 8 of CHLAR is to be restored? 17. The Registry is directed to take necessary steps to resolve the above point of difference in views of the two Members.