Devadatta Agency Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. this appeal arises from order dated 6-9-2005 putting the appellant under suspension in terms of regulation 21(2) of chalr, 1984 read with regulation 20(2) of chalr, 2004. the appellants had filed bill of entries on behalf of a psu unit viz. m/s. iti ltd., bangalore on 6-6-2005 and 28-7-2005. the supplies were made by m/s. zte corporation, china. the commercial invoice raised by the foreign supplier described the goods as "wp805a cdma integrated fixed wireless terminal (ifwt) less smps with internal battery and battery charger". however, the cha had described the goods as "model no. wp805a cellular telephone wp805a cdma integrated fixed wireless terminal (itwt) less smps with terminal battery". the allegation against the appellants is that they have incorporated words 'cellular telephone' which was not appearing in the commercial invoice. therefore, the appellants have been put under suspension vide order dated 6-9-2005 on the allegation that there is a deliberate mis-declaration of description in the import documents by the cha as a result of which goods were wrongly assessed duty as cellular phones resulting in short levy of rs. 23,34,125/-. it has been alleged that this is a case of mis-conduct on the part of the cha requiring further enquiry and appropriate action in terms of chalr.2. the contention of the appellants is that m/s. iti ltd. has produced enormous evidence both technical along with specifications to claim the item to be a cellular telephone. there is no mis-declaration and this declaration has been done at the instance of the said psu who have supporting evidence to claim the item to be a cellular telephone. they have paid the duty under protest and have taken appropriate legal remedies to substantiate their claim. the appellants contend that the suspension has not been done with immediate effect which is a requirement for putting the appellants under suspension. they are having business of crores of rupees and there was no occasion for them to have indulged in any mis-conduct. it is the submission of the learned counsel that there has to be prima facie evidence for placing the appellants under suspension. as m/s. iti ltd. has placed enormous evidence to claim the item to be a cellular telephone, the appellants in no way indulged in an act of mis-conduct. the evidences are also produced before us for verification. it is their contention that the revenue interest has not been jeopardized. as the suspension has not been done immediately and there is a delay of more than three months, the suspension order is required to be set aside. in this regard, the learned counsel relies on the following rulings :-total shipping india (p) ltd. v. cc - final order no. 1474/2005 dated 29-8-2005mohammed riaz uddin ahmed v. cc - final order no. 846/2005 dated 20-5-2005gcl shipping agencies (p) ltd. v. cc 2. the learned counsel submits that all these judgments have been rendered in the light of several rulings of the high court, supreme court and larger bench. he prays for setting aside the suspension order but does not contest the right of the commissioner to proceed against the appellants in terms of the regulations for charge-sheeting and holding an enquiry and proceeding in terms of law. he submits that the appellant should not be prevented from carrying on the business by an order of suspension when there is a delay in issue of the order and when prima facie, the appellants have not committed any serious misconduct.3. the learned sdr opposes the prayer for lifting the order of suspension.4. on a careful consideration and perusal of the citations, we notice that in terms of the ratio of several judgments produced before us, the suspension order has to be immediate in terms of the regulation 20(2) of chalr, 2004 as held by the madras high court in the case of east west freight carriers pvt. ltd. v. collector - and calcutta high court in the case of n.c. singha & sons v. uoi - . the tribunal, in the case of hexagon shipping services v. cce - 2002 (149) e.l.t. 958 has set aside the order of suspension on the ground of delay. so also, in the case of d.h. patkar & co. v. cce - . similar orders have been passed in the case of (i) poonam cargo services -; (ii) gnk shipping pvt. ltd. v. cce - 2005 (68) rlt 569; (iii) gcl shipping agencies p. ltd. v. cceinternational cargo agents v. cc - . therefore, these judgments have been followed in the case of mohammed riaz uddin v. cce - final order no.1474/2005 dated 29-8-2005. in the present case also, the delay is more than three months. in the present case, the appellants have not committed the mis-conduct with a view to avail any monetary gain or to defraud the revenue as contended by them. they were having technical evidence to support the plea that the imported item is a cellular phone. in any case, m/s. iti ltd., a public sector undertaking, had given instructions to the appellants to declare the item to be a cellular telephone in the light of the enormous evidences they were relying on. they have contested the department's plea that it is not a cellular phone and paid the duty under protest. the matter is subjudice with regard to the item being a cellular telephone or not. in view of the contest raised by m/s. iti ltd., the appellants cannot be said to have committed such a misconduct as to keep them away from the business. there is a serious doubt with regard to the item imported.there is also a delay in issue of the suspension order. in terms of the cited judgments, the suspension order is required to be set-aside on this ground alone. therefore, the order of suspension against the appellant is set aside by allowing the appeal. however, it does not preclude the commissioner to proceed as per law against the appellants for such actions as is required to be taken under chalr. the appellants shall be permitted to operate their licence with immediate effect.registry to issue this order out of turn.(operative portion of this order was pronounced in open court on conclusion of hearing)

Judgment:
1. This appeal arises from Order dated 6-9-2005 putting the appellant under suspension in terms of Regulation 21(2) of CHALR, 1984 read with Regulation 20(2) of CHALR, 2004. The appellants had filed Bill of Entries on behalf of a PSU Unit viz. M/s. ITI Ltd., Bangalore on 6-6-2005 and 28-7-2005. The supplies were made by M/s. ZTE Corporation, China. The Commercial invoice raised by the foreign supplier described the goods as "WP805A CDMA Integrated Fixed Wireless Terminal (IFWT) less SMPS with internal battery and battery charger". However, the CHA had described the goods as "Model No. WP805A Cellular Telephone WP805A CDMA Integrated Fixed Wireless Terminal (ITWT) less SMPS with Terminal Battery". The allegation against the appellants is that they have incorporated words 'Cellular Telephone' which was not appearing in the Commercial Invoice. Therefore, the appellants have been put under suspension vide Order dated 6-9-2005 on the allegation that there is a deliberate mis-declaration of description in the import documents by the CHA as a result of which goods were wrongly assessed duty as Cellular Phones resulting in short levy of Rs. 23,34,125/-. It has been alleged that this is a case of mis-conduct on the part of the CHA requiring further enquiry and appropriate action in terms of CHALR.2. The contention of the appellants is that M/s. ITI Ltd. has produced enormous evidence both technical along with specifications to claim the item to be a Cellular Telephone. There is no mis-declaration and this declaration has been done at the instance of the said PSU who have supporting evidence to claim the item to be a Cellular Telephone. They have paid the duty under protest and have taken appropriate legal remedies to substantiate their claim. The appellants contend that the suspension has not been done with immediate effect which is a requirement for putting the appellants under suspension. They are having business of crores of rupees and there was no occasion for them to have indulged in any mis-conduct. It is the submission of the learned Counsel that there has to be prima facie evidence for placing the appellants under suspension. As M/s. ITI Ltd. has placed enormous evidence to claim the item to be a Cellular Telephone, the appellants in no way indulged in an act of mis-conduct. The evidences are also produced before us for verification. It is their contention that the Revenue interest has not been jeopardized. As the suspension has not been done immediately and there is a delay of more than three months, the suspension order is required to be set aside. In this regard, the learned Counsel relies on the following rulings :-Total Shipping India (P) Ltd. v. CC - Final Order No. 1474/2005 dated 29-8-2005Mohammed Riaz Uddin Ahmed v. CC - Final Order No. 846/2005 dated 20-5-2005GCL Shipping Agencies (P) Ltd. v. CC 2. The learned Counsel submits that all these judgments have been rendered in the light of several rulings of the High Court, Supreme Court and Larger Bench. He prays for setting aside the suspension order but does not contest the right of the Commissioner to proceed against the appellants in terms of the Regulations for charge-sheeting and holding an enquiry and proceeding in terms of law. He submits that the appellant should not be prevented from carrying on the business by an order of suspension when there is a delay in issue of the order and when prima facie, the appellants have not committed any serious misconduct.

3. The learned SDR opposes the prayer for lifting the order of suspension.

4. On a careful consideration and perusal of the citations, we notice that in terms of the ratio of several judgments produced before us, the suspension order has to be immediate in terms of the Regulation 20(2) of CHALR, 2004 as held by the Madras High Court in the case of East West Freight Carriers Pvt. Ltd. v. Collector - and Calcutta High Court in the case of N.C. Singha & Sons v. UOI - . The Tribunal, in the case of Hexagon Shipping Services v. CCE - 2002 (149) E.L.T. 958 has set aside the order of suspension on the ground of delay. So also, in the case of D.H. Patkar & Co. v. CCE - . Similar orders have been passed in the case of (i) Poonam Cargo Services -; (ii) GNK Shipping Pvt. Ltd. v. CCE - 2005 (68) RLT 569; (iii) GCL Shipping Agencies P. Ltd. v. CCEInternational Cargo Agents v. CC - . Therefore, these judgments have been followed in the case of Mohammed Riaz Uddin v. CCE - Final Order No.1474/2005 dated 29-8-2005. In the present case also, the delay is more than three months. In the present case, the appellants have not committed the mis-conduct with a view to avail any monetary gain or to defraud the Revenue as contended by them. They were having technical evidence to support the plea that the imported item is a Cellular Phone. In any case, M/s. ITI Ltd., a Public Sector Undertaking, had given instructions to the appellants to declare the item to be a Cellular Telephone in the light of the enormous evidences they were relying on. They have contested the department's plea that it is not a Cellular Phone and paid the duty under protest. The matter is subjudice with regard to the item being a Cellular Telephone or not. In view of the contest raised by M/s. ITI Ltd., the appellants cannot be said to have committed such a misconduct as to keep them away from the business. There is a serious doubt with regard to the item imported.

There is also a delay in issue of the suspension order. In terms of the cited judgments, the suspension order is required to be set-aside on this ground alone. Therefore, the order of suspension against the appellant is set aside by allowing the appeal. However, it does not preclude the Commissioner to proceed as per law against the appellants for such actions as is required to be taken under CHALR. The appellants shall be permitted to operate their licence with immediate effect.

Registry to issue this order out of turn.

(Operative portion of this Order was pronounced in open Court on conclusion of hearing)