Per : Ashok Jindal
The appellants M/s. Real Logistics Shipping Agencies (CHA) has filed this appeal against the order of the Commissioner of Customs canceling the Licence No. PN/R/Miraj/010/2004 dated 22.04.2004 issued to them.
2. After hearing both the sides at length on the stay application, we find it that the appeal itself can be disposed of at this stage. Accordingly, after considering the impugned order and with the consent of both the sides, we take up the appeal for final disposal.
3. Brief facts of the case are that the appellants were granted licence in the name of Real Logistics Shipping Agencies, (a partnership firm under deed of partnership executed by three partners namely Shri. Manoj Haridas Kotak, Shri Savio Climark Gomes and Shri Yudhistir Shrimotiram Batla) vide CHA Licence bearing No. PN/R/Miraj/010/2004 under CHALR, 2004. In 2007, the partner viz. Shri Savio Climark Gomes and Shri Yudhistir Shrimotiram Batla resigned from the partnership firm and a new partner Shri Haresh V. Pandya (who holds a Customs Pass issued under Regulation 9 of the CHALR, 2004) was inducted into the firm under Retirement-cum-partnership deed dated 9.10.2007. Shri Manoj H. Kotak and Shri Harish V. Pandya were the partners in the new partnership firm. As per Regulation 15(1) of the CHALR, 2004, the appellants are required to intimate the Customs about the change in the constitution of the partnership firm vide letter dated 08.10.2007. On their intimation to the Customs, investigation was done and vide order dated 19.10.2009 the appellants were intimated that ‘your request could not be considered favourably as this case does not amount to change in the partnership firm since the partners of the firm before re-constitution are having minority stake in the new firm.- Aggrieved from the said letter the appellants filed a writ petition before Hon’ble High Court of Bombay vide Writ Petition No. 9439 of 2009 and the Hon’ble High Court disposed of the writ petition on the request of both sides that the impugned order dated 19.10.2009 is liable to be quashed, the same was quashed by the Hon’ble High Court of Bombay and the matter was remanded back to the Commissioner for fresh consideration after following the principle of natural justice. Accordingly, the Commissioner passed the impugned order on 29.04.10 canceling the licence of the appellants firm. Aggrieved from the said order of cancellation of licence the appellants are before us.
4. The learned DR took an objection that the Tribunal has no jurisdiction to entertain this appeal on the ground that this order does not have a preamble which indicates where the appeal of this order lies. He further submitted that it is an order passed by the Commissioner of Customs on the direction of the Hon’ble High Court hence, this Tribunal has no jurisdiction.
5. To decide the issue we have gone through the provision of Section 129A of the Customs Act, 1962 and the same are produced as under:-
Section 129A. Appeals to the Appellate Tribunal (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order
(a) a decision or order passed by the (Commissioner of Customs) as an adjudicating authority;
(b) an order passed by the (Commissioner (Appeals) under Section 128A;
(c) an order passed by the Board or the (Appellate Commissioner of Customs), under Section 128, as it stood immediately before the appointed day;
(d) an order passed by the Board or the (Commissioner of Customs), either before or after the appointed day, under section 130, as it stood immediately before that day:
As per Section 129, the Tribunal has the power to entertain the appeal against a decision or order passed by the adjudicating authority under this Act and we find that in this case the Commissioner (adjudicating authority) has passed an order which is appealable before us. Hence, the preliminary objection raised by the learned DR has been turned down and we have taken the appeal on merits.
6. The learned Advocate for the appellants submits that as per the Rule 15 of the CHALR, 2004 in case of any firm at the time of retirement of the partner and coming of a new partner in the partnership firm, the appellants have to make a fresh application indicating such changes within a period of sixty days to grant the licence afresh under Regulation 9. Thereafter the Commissioner will examine the case and if nothing found adverse against the firm, will grant a fresh licence of the category held by the appellant prior to change in constitution. There is no dispute that the appellants have fulfilled their obligation to intimate within 60 days of the change in constitution. The Commissioner in the impugned order has given some other grounds that it is a case of transfer of licence under Regulation 12 which is not permissible under law. The learned Advocate also produced the Form E under Indian Partnership Act, 1932 which confirms the notice of the change of constitution of the firm effecting the change by indicating Shri Haresh V. Pandya and Shri Manoj Haridas Kotak as the new partners. These documents were produced before the Commissioner who failed to consider the same. Moreover the Commissioner has held that the continuing partner is having a stake of 30% of the newly constituting firm which amounts to transfer of licence and cancelled the same which is not permissible under law. To support his contention he placed reliance on the decision in the case of Sree Narayanaswami Match Factory vs. Supdt. Of Central Excise, Tirunelveli ‘ 2000 (125) ELT 163 (Mad.) wherein the Hon’ble Madras High Court has observed as under:-
“When once it is conceded that the alternation which has been effected in the running and administration of the partnership firm related only to its reconstitution which was effected either by retirement or by admission, then the proposition is indisputable that the firm continues in the eye of law and it does not by reason of such a change become a new firm or a firm different from that which existed prior to the reconstitution.”
and the writ petition was allowed.
6.1 He finally prayed that the impugned order be set aside and the Commissioner may be directed to issue new licence under CHALR, 2004 to the appellant’s firm.
7. On the other hand, the learned DR opposes the contention of the learned Advocate saying that it is a case of transfer of licence and as per Regulation 12 of the CHALR, no transfer / sale of licence is permissible. The outgoing partners have sold their shares to the incoming partner, the same is not permissible.
8. On careful examination of the submissions made by both sides, we find that it is neither a case of transfer of licence nor a case of sale of licence to the incoming partner. The appellant M/s. Real Logistics Shipping Agencies remain the same and only the constitution of the partnership firm underwent a change by inducting a new partner in the said partnership firm. The provisions of Regulation 15 are applicable to this case which caused an obligation on the appellants to intimate to the Customs within 60 days of the change in constitution. The appellants have fulfilled the same. Now it is the duty of the Commissioner of Customs to verify the documents as to whether the change in constitution is as per the Indian Partnership Act, 1932 or not. If it is found that the documents are accepted under the Indian Partnership Act, 1932, renewal of licence be granted to the appellants.
9. With these observations, we set aside the impugned order by allowing the appeal. Stay petition also stands disposed of in the above manner.