K.L. ALAGU MURUGAPPAN Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS appeal has been filed by Shri K.L. Alagu Murugappan, CHA against the order of the Commissioner in Order -in -Original No. 64/2001 (COMMR) dated 12.12.2001 by which the Commissioner has imposed a penalty of Rs. 25,000 on the Customs House Agent Shri Alagu Murugappan under Section 114(i) and 114 (iii) of the Customs Act, 1962.

(2.) AGGRIEVED by this order, the appellant through Shri S. Murugappan, Advocate submits that in reply to the show cause notice he had clearly indicated that he was not aware of any of illegal activity or any other plans of the exporters and he had merely taken up the job in his normal course of business. Nowhere, during the filing of shipping bills or processing he had slightest suspicion that the exporters had the intention of claiming the wrongful drawback benefit. Neither act of mala fide since he had prepared the shipping bills as per the documents. This is also clear from the statements given by Shri T.V. Ramesh and R. Gokul who were the agent instructed by M/s. Merill Export through whom the appellant had the opportunity of filing the above shipping bills. In the statements, all the three have specifically admitted that they had indulged in mis -declaration of quality, quantity and value of export goods and the CHA was not aware of their plan. The exporter and his agent had also admitted in their statements that they did not disclose the fact of mis -declaration to the appellant's firm. They had also admitted that the goods were transported and produced for customs examination without the knowledge of the appellant. He therefore, submitted that all the statements go on to prove that the appellant acted bona fide and at no point of time, he was aware of the illegal activities of the exporters or any mis -declaration as regards quantity and quality of the goods. The appellant has therefore, acted and performed his duties as CHA as per the provisions laid down in Regulations of Customs House Agents Licensing Regulations, 1984. Advocate also invited my attention to para 55 of the impugned order in which it has been held that Shri T. Ramasamy who was an employee of the CHA firm was not aware of the fraudulent export and the Ld. Commissioner had not imposed any penalty on him in view of the fact that there was no evidence found on the part of his employee and no evidence was found to show that his employee and representative at Tuticorin Customs House was aware of the fraudulent export and no penalty was imposed on him. When it has been held by the Ld. Commissioner that his employee Shri T Ramasamy who had processed and filed the paper before the customs house, Tutocorin was held to be not aware of the fraudulent export and when no penalty was imposed on him, imposing penalty on Shri K.L. Alagu Murugappan, the appellant CHA is not proper and legal. He however admits that Shri Alagu Murugappan, CHA who normally sits in Chennai had made available pre -signed shipping bills to Shri T. Ramasamy, his employee and his representative at Tuticorin to enable him to fill up all the particulars based on the documents supplied by the exporters. This pre -signed shipping bills and other documents is done to facilitate easy process of documentation so that Shri T. Ramasamy does not have to come again back to Chennai for getting his signatures. This methodology is their internal arrangement and all pre -signed documents will always be between the authorised signatory and their authorised representative so that he does not have to come again from Tuticorin to Chennai. But this cannot be the basis for imposition of such a high penalty on the CHA and on this ground alone when it has been held that the employee/representative of the CHA was not at all held to be aware of the fraudulent export and no penalty was imposed on him, the Commissioner should not have imposed penalty on Shri Alagu Murugappan also. The shipping bill in question was pre -signed at Madras by Shri Alagu Murugappan, the only authorised signatory for the CHA and was handed over to Shri T. Ramasamy his representative and employee at Tuticorin. By this action, the CHA Shri Alagu Murugappan has not contravened any provisions of law and the Custom House Agents Licensing Regulations and it is only for administrative convenience and since the authorised signatory was at Chennai his signatures were obtained on the blank shipping bill. He further submitted that the penalty can be imposed only in cases were there is culpable negligence and penalty cannot be imposed for mere lack of exercise of proper inspection, supervision and diligence. Even in cases where lack of exercise of proper inspection had been found, mere admonition was sufficient when bona fides of the clearing Agents or his employees are not doubted. In this connection he invited my attention to the judgment rendered by the Tribunal in the case of Banco Trans Limited v. CC, Bangalore, 1996 (83) ELT 557. He also invited my attention to the judgment rendered by this Bench in the case of A.N. Bhat v. CC, 1991 (55) ELT 580 in which it has been held that no penalty on clearing agent would be imposable for mis -declaration of export goods in cases where the clearing agent is not implicated in any manner by partner or export firm and it was held that although CHA acted with negligence, imposition of penalty not justified when clearing agent had no knowledge about the illegal activities of the exporters. Advocate also invited my attention to the judgment rendered by the West Zonal Bench in the case of Liladhar Pasoo Forwarders Pvt. Ltd. v. CC, Mumbai, 2000 (122) ELT 737 wherein it was held that no penalty for abatement can be imposed in the absence of knowledge of contravention of law on the part of abettor. Advocate further submitted that Shri T. Ramasamy had filed the shipping bill with the department for assessment alongwith R. Gokul and Vincent the representative of the exporter. After assessment without the knowledge of Shri Vincent, Shri Gokul took the documents and produced the same before the customs for sealing and stuffing. After the recall of containers only they came to know that the goods stuffed did not tally with the shipping bills and S/Shri R. Gokul and T.V. Ramesh purposely stuffed the container without their knowledge. In spite of these facts when the CHA had no knowledge and goods have been stuffed and sealed by the customs, the Customs Commissioner still held that the CHA is responsible, as pre -signed blank forms were made available to his representative at Tuticorin.

(3.) APPEARING on behalf of the revenue, Shri C. Mani, DR submits that the fact that blank shipping bill was signed by the authorised signatory namely Shri Alagu Murugappan and handed over to Shri T. Ramasamy, his employee and authorised representative at Tuticorin this Act has led to the commission of offence and therefore penalty has been rightly imposed on him. He also invited my attention to the decision of the Supreme Court on 22.1.2001 in which they dismissed the SLP (Civil) No. 631 of 2001 filed by Kamakshi Agency against the judgment and order dated 12.11.2000 of the High Court of Judicature at Madras in Ref. Case No. 4 of 1997 and reported in 2001 (129) ELT 29 (Mad.) - - (Sri Kamakshi Agency v. Commissioner). He submits that the facts in that case were that the fraudulent activities carried on by Power of Attorney holder were to be treated as having been carried out by Proprietor or Petitioner company himself and accordingly the revocation of licence was justified. DR also invited my attention to the judgment rendered by the Northern Bench, New Delhi in the matter of Shree M. Mohan and Company v. CC, New Delhi, 2001 (129) ELT 746 in which it was held that since the CHA was not attending to work himself nor through an approved person but through another company, he was held to have violated Regulation 14 of Customs House Agents Licensing Regulations, 1984 and revocation of his licence was held to be sustainable.