Customs Appeal No. 47 of 2011 and Writ Petition No. 2320 of 2014. Case: Commissioner of Custom Vs Sainath Clearing Agency. High Court of Bombay (India)
| Case Number | Customs Appeal No. 47 of 2011 and Writ Petition No. 2320 of 2014 |
| Counsel | For Appellant: Shri Pradeep S. Jetly, Adv. and For Respondent: Shri H.R. Shetty, Advocate. |
| Judges | S.C. Dharmadhikari and G.S. Kulkarni, JJ. |
| Issue | Customs House Agents Licensing Regulations, 2004 - Regulation 20(2) |
| Citation | 2015 (326) ELT 548 (Bom) |
| Judgement Date | July 22, 2015 |
| Court | High Court of Bombay (India) |
Judgment:
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In the light of the order that we propose to pass on the Customs Appeal, the Writ Petition would not survive inasmuch as thereafter the parties have to abide by the orders in the Appeal. Hence, by consent we take up the Customs Appeal No. 47 of 2011 for hearing and final disposal.
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This Customs Appeal challenges the order passed on 3-3-2011 by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai [2011 (269) E.L.T. 106 (Tri.-Mum.)]. That Tribunal allowed the appeal of the respondent.
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Mr. Jetly, learned Counsel appearing in support of this appeal for Revenue submits that the four questions proposed at page 5 of the paper book are all substantial questions of law.
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In his submission, the Customs House Agent Licence No. 11/1030 was granted to the respondent under Regulation 10(1) of the Customs House Agents Licensing Regulations, 1984. The Directorate of Revenue had investigated the case of misuse of advance licence scheme by one Anthony D''Souza in the name of his two proprietory firms M/s. Tony Enterprises and M/s. Ventura Alloys and Electrics (India). The investigation revealed involvement of the respondent and that is how a notice to show cause was issued. That alleged aiding and abetting the importer in the evasion of import duty on import of blank audio and video cassettes by availing duty exemption under Advance Licence.
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The Commissioner of Customs heard the respondent and thereafter issue a suspension order. That suspension order was passed under Regulation 20(2) of the Customs House Agents Licensing Regulations, 2004. This was pending completion of inquiry. Against the order of suspension dated 4-5-2005, an appeal was preferred before the CESTAT and on 24-6-2005 that appeal was allowed. The order of CESTAT was accepted by the Commissioner of Customs and the licence became operative. That was with effect from 12-8-2005. Later on the inquiry concluded and the Inquiry Officer submitted his report on 30-5-2007 wherein he held that Articles of Charges I, II and IV are not proved and Article of Charge III is proved. The Commissioner disagreed with these findings in the Inquiry Report and, therefore, a disagreement Memo dated 30-7-2007 was issued. The respondent was once again given an opportunity to reply to the specific allegation as to why all the charges should not be held to be proved.
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It was thereafter the final order dated 20-12-2007 revoking the Customs House Agent Licence was passed. The entire security deposit was forfeited. The appeal preferred by the respondent against this order of the Commissioner has been allowed by the impugned order.
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Mr. Jetly would submit that the appeal has been allowed erroneously. The punishment of revocation of the licence should not have been interfered with. The Inquiry Officer has exonerated the respondent but the Regulations permit the Commissioner to express his disagreement with these findings in the Inquiry report. Being a Disciplinary Authority, the Commissioner could have disagreed with this report and that is how the disagreement was expressed. When a complete compliance has been made with the principles of natural justice and the charges are grave and serious, then, the order of CESTAT is totally uncalled for and unjustified. Our attention has been invited to the order to submit that the Commissioner has held that there is violation of Customs House Agents Licensing Regulations. Mr. Jetly has taken us through the Memo of charges, the reply or response of the respondent and the findings in the Commissioner''s order. Mr. Jetly submits that as far as Charge No. II is concerned, there is absolutely no authorization in favour of the respondent. The document was produced as afterthought. As far as Charge No. III is concerned, it is apparent that the respondent was found aiding and abetting the importer. The imported goods have been diverted to the domestic and that is how the charge was came to be proved. Mr. Jetly would submit that equally Charge No. IV is serious. If a third party is allowed to operate the licence on commission, then, this is clear violation of the Regulations. Mr. Jetly''s emphasis is on the relationship between the Revenue/Department and the Agent. Mr. Jetly would submit that the department reposes complete faith and trust in the Customs House Agent rather than his/her clients. If the agent has to guide the importers and exporters to ensure compliance with law, then, all the more the approach of the Tribunal cannot be sustained. This appeal, therefore, be allowed.
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Mr. Shetty, learned Counsel appearing on behalf of the respondent, on the other hand, would submit that there is no merit in this appeal. The appeal has been admitted only on the reframed substantial question of law and that is whether on the facts and in the circumstances of the case and in law, the CESTAT is justified in setting aside the order revoking the agent''s Customs House Agents Licence even after holding two charges levied against the Agent were proved and Regulation 13(a) and (k) of the Regulations have been violated. In that regard Mr. Shetty would submits that the Department or the Revenue cannot indulge in pick and choose. Mr. Shetty relied upon the compilation handed over to us and contended that there were two agents namely Mr. S.P. Pawar & Sons and M.D. Shipping Agency. Similar charges were levelled against them and similar outcome of the inquiry resulted in their licence being revoked. However, the Tribunal found that there is difference between a gross illegality and irregularity. Some of the regulations are capable of substantial compliance and they need not be strictly complied with. Therefore, if there is failure to comply with them, then, the penalty should not be revocation of the licence but as held in their cases the forfeiture of security deposit was enough. Precisely, that has been done by the Tribunal in the present case. Therefore, the appeal deserves to be dismissed.
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With the assistance of both the learned Counsel, we have perused this Appeal, paper book and all the annexures thereto including the impugned order. A show cause notice was issued under Sections 28(1) and 124 of the Customs Act, 1962 that is because there was a misuse of...
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