| SooperKanoon Citation | sooperkanoon.com/46043 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai |
| Decided On | Aug-20-2007 |
| Judge | T Anjaneyulu, S T A.K. |
| Reported in | (2007)(122)ECC175 |
| Appellant | international Express Co. |
| Respondent | Commissioner of Customs |
2. Mr. Sujay N. Kantawala, Ld. Advocate for the appellants argued that firstly, in the case of TASS Clearing Services Pvt. Ltd. v. CC, Hyderabad-II reported in 2007 (80) RLT 224 (CESTAT-Ban.), the CESTAT has inter alia held that even a delay in suspending the CHA licence, after 61 days of detection of the case was set aside as it was not immediate as required under the regulations. He further stated that in the case cited above, the Tribunal had taken into consideration various precedents and the principles and held that suspension should be immediate, i.e. the action of the commissioner, in taking immediate action under the regulations should be done as expeditiously as possible, from the date of the alleged mis-conduct and if there is a passage of time from the date of notice of the mis-conduct as alleged, then it is not immediate, as intended as per the regulations and the suspension has to be set aside, in such a case. Reading this principle into the facts and circumstances of the present case, the ld. Advocate took us through the correspondence, in the form of various letters / representations, which according to him, clearly proves that the investigation in the present case and other related cases commenced long time back, and in fact, the Commissioner of Customs had also heard the CHA as far back as 20th June 2005. These letters are annexed to the appeal and no contrary evidence or argument has been put forth by the ld SDR appearing for the Revenue. At this stage he relied on a decision in the case of Setwin Shipping Agency v. Commissioner of Customs, Mumbai the principle of delay in suspension of CHA licence. He, therefore, stated that on this ground alone, the suspension order, which has been belatedly passed and for altogether different purposes, cannot be sustained and deserves to be set aside.
3. Ld. Counsel of the appellants further argued that from the date of the suspension order i.e. 8.12.2006, till today, the licence continues to remain suspended. He placed before us the decision as in the case of Falcon Air Cargo & Travel (P) Ltd. v.Commissioner of Customs, New Delhi and buttressed the submission that assuming for the sake of argument, if at all, it was a case of supervision failure, in respect of the suo-moto acts of the employee, on Mr., Santosh Dabhade, the period undergone, of suspension, was punishment enough and hence, the suspension of the CHA licence, should not be allowed to continue, any further. He thereafter drew our attention, to the show cause notice dated 18.2.2005, which was issued, by the ADG, DRI, Mumbai, in respect of seizure of three consignments of analgin which were imported by M/s Kalinga Trading Company. Thane. He stated that if the list notices to the show cause notice is seen, the CHA and its partner Shri Kamlesh Gandhi, in fact whose statements were recorded during the investigation, have not even been made a party to the show cause notice. In this respect, he drew our attention to the decision of the CESTAT in the case of Ease West Shipping Agency reported in 2006 (202) ELT 105 (Tri. - Mumbai) and submitted that the show cause notice dated 18.2.2005, was issued in respect of a particular seizure and when the CHA and / or its partner were not even called upon to show cause as regards penalty etc., the CHA licence which was suspended as late as 8th December 2006 was clearly an act of belated non-application of mind by the respondent Commissioner. The show cause notice was pending adjudication ( not having made the CHA and/or its partner a party) and would never result in invocation and/or confirmation of the penal provisions against the CHA. No useful purpose would be served at this stage in allowing further continuation of suspension of the CHA licence. Though the Commissioner has referred to certain other cases, which are supposedly under investigation of the alleged abuse of the CHA licence, which were reported as far back as in February 2005 and March 2005, the licence which came to be suspended in December 2006 only pertains and specifically refers to the investigation with regard to seizure of 16 MT of analgin only, imported by M/s Kalinga Trading Co. and hence, it is clear in these circumstances that no such proposal was put up for suspension of the CHA licence in respect of the cases under investigation by the Commissioner of Customs (Import) ACC, Mumbai and DRI. Mumbai and hence, the adjudicating authority had clearly mixed up the issues and had acted beyond the scope of the original suspension order.
4. He, therefore, submitted that there was no reason to observe that the charged CHA miserably failed to discharge their obligations and hence abetted / aided in the said attempt to evade customs duty by mis-declaration of goods. When the DRI authorities in the show cause notice dated 18.2.2005 did not make this allegation against the CHA, the respondent Commissioner clearly acted in a cavalier fashion and beyond the scope of the remand proceedings. Suspension of the CHA licence in this case has been resorted to, after issue of the show cause notice but only because the Director General of Vigilance, Mumbai as of the opinion, that the CHA licence, needs to be suspended, with immediate effect and it was the office of the Director General, Vigilance, who had in fact, recommended, the suspension of the CHA licence for their alleged role in the said mis-declaration, and the respondent Commissioner, proceeded to, originally, in an ex-parte fashion, suspended the licence on 8.12.2006. The ld. Advocate submitted that the Commissioner has not acted independently but on the recommendation of the Director General and the CHA licence is suspended. There has to be an independent reasoning and impartial exercise of mind and the respondent Commissioner was duty-bound to fully satisfy himself as to whether it was really necessary to act on such recommendation. The ld. Advocate submitted that the statements of Shri Kamlesh Gandhi, partner have been totally misquoted and are absolutely exculpatory and the respondent Commissioner observing that the CHA firm had failed to prove their innocence is clearly a finding, which is un-sustainable. He further submitted that the impugned order dated 2.3.2007 continuing the suspension of the CHA licence is liable to be set aside.
5. The ld. DR merely reiterated the findings of the adjudicating authority.
6. We have considered the submissions. It is an undisputed fact that the CHA licence came to be suspended on 8.12.2006 in respect of the enquires / investigations conducted in respect of the seizure of 16 MT of analgin. A show cause notice was issued much prior to the suspension of the CHA licence, not to the CHA and /or its partner, but to the former employee only. The DRI authorities have thus, in their wisdom, not invoked the penal provisions of the Act against the Appellant CHA.This clearly proves that as far back as February 2005, the investigating agency had not found and/or come across any erring act and / or violatory act on the part of the appellant CHA. It is also pertinent to note that there was a huge amount of correspondence which was carried out by the appellant CHA's advocate before the competent authority i.e. the previous Commissioner and a hearing was also attended in respect of any proposed action which may be taken against the CHA licence, as far back as 20th June 2005. When this was pointed out during the adjudication proceedings the Commissioner has not thought it fit to answer and / or comment on this vital submission. The licence ultimately was suspended in an ex-parte order dated 8.12.2006 which was set aside by order dated 10 January, 2007 by this Tribunal and the matter was remanded back to the Commissioner for a fresh decision after extending a reasonable opportunity to the appellants of being heard in person. The present impugned order has been passed on 2nd March 2007 which is beyond the permissible period as laid-down in the final order passed by this Tribunal on 10.1.2007. However, the ld.Advocate has not pressed this issue. It appears that the Director General of Vigilance, Mumbai was of the opinion that the CHA licence needs to be suspended with immediate effect. It is not borne out by the impugned order as to when this advice to suspend the CHA licence was received by the respondent Commissioner at Mumbai Custom House.
However, it is clear that the recommendation has been accepted and the licence was suspended by order dated 8.12.2006 and remains under suspension till date. It is highly improper for the respondent Commissioner to have merely acted on the recommendation of the Director General of Vigilance, Mumbai without any independent exercise by him.
7. We agree that the licence which was suspended in December 2006 was only in respect of the seizure of 16 MT of analgin and the respondent Commissioner erred in observing, without putting the CHA to notice, that another case of abuse of the CHA licence was reported in February, 2005 and March, 2005,5 but be that as it may, these cases are not reflected in the order dated 8.12.2006, suspending the CHA licence, which was passed only in respect of the investigation being conducted in respect of seizure of 16 MT of analgin by the DRI. When the show cause notice issued Under Section 124 of the Customs Act, 1962, on 18.2.2005, does not frame any charges against the appellant CHA and there is a gross delay in resorting to the route of the CHA licence suspension. In view of the well settled principles laid down by the Tribunal in similar cases of delay as contended by the ld. Advocate, the suspension of CHA licence cannot be allowed to continue any further. Therefore, we hold that the impugned order is erroneous and deserves to be set aside. Accordingly we set aside the same. The operation of the CHA licence may be allowed in the normal course, forthwith. The appeal is allowed, with all consequential reliefs.