TRINITY FORWARDERS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The appellant is a Customs House Agent (CHA), whose grievance is that the Commissioner of Customs ordered forfeiture of security deposit of Rs. 25,000 under Regulation 21 (1) of the Customs House Agent Licensing Regulations 1984. In the impugned order, Ld. Commissioner found the CHA to have violated Regulations 14(a), (d) and (1) of the CHALR, 1984. It appears from the records that, on 17.3.2001, the CHA filed 10 Shipping Bills on behalf of the M/s A.K. Enterprises for export of goods, which were declared as "100% Rayon Woven Ladies Blouses". The Shipping Bills were filed under Duty Drawback Scheme. SIIB officers, in the course of investigations, found that the 10 Shipping Bills had been cancelled. On further scrutiny of record, they found that, out of 3925 cartons of export cargo, which were registered in the name of M/s A.K. Enterprises, 3857 cartons contained poor quality clothing in the nature of rags and improperly stitched garments made from synthetic fibre. Statements were recorded on various dates from Shri Krishnanandh, Authorized signatory of the CHA. Statements were also recorded from Shri Kiran Kumar, Proprietor of M/s. A.K. Enterprises and Shri Dilli Babu, Proprietor of Shri Vadivudai Amman Transport. From the results of investigations, it appeared to the Department that M/s A.K. Enterprises had fraudulently attempted to export useless clothings in the guise of quality garments with intent to get undue drawback of duty and that the CHA was aware of this fraud. Show -cause notices were issued to both the exporter and the CHA. The notice issued to the exporter is reportedly yet to be adjudicated upon. The one issued to the CHA alleged that they had violated Regulations 14 (a), (d) and (1) and proposed revocation of their licence as well as forfeiture of their security deposit under Regulation 21 (1) of the CHALR, 1984. The CHA's reply to the show -cause notice was submitted to a Deputy Commissioner of Customs, who had been appointed as Inquiry Officer in terms of Regulation 23. On completion of enquiry, the Inquiry Officer submitted a report to the Commissioner, which was to the effect that the charges levelled against the CHA could not be proved. In the subsequent hearing conducted by the Commissioner, the CHA relied on the Inquiry Report and pleaded for dropping of the proceedings, Ld. Commissioner, however, rejected the Inquiry Report and reached an independent conclusion that the CHA had failed to comply with Regulations 14 (a), (d) and (1). Accordingly, he ordered forfeiture their security deposit.

(2.) Ld. Counsel for the CHA submitted that after filing the Shipping Bills, they had inspected the cargo in warehouse on the same date (17.3.2001) and, upon finding that the goods did not conform to the declaration in the Shipping Bills, advised their client not to export it. Accordingly, the Shipping Bills were got cancelled. The inspection of the cargo by the SIIB was only subsequent to this. In the circumstances, according to Ld. Counsel, it could not be said that the CHA had violated any of the provisions of CHALR. It was argued that there was no contravention of Regulation 14 (a) inasmuch as the exporter's authorization for the CHA to file the Shipping Bills was implicit in the fact that the Shipping Bills filed by the CHA carried the exporter's signature. In this connection, Ld. Counsel relied on the Tribunal's decision in the case of P.P. Dutta, 2001 (136) ELT 1042. Referring to the charge that the CHA had failed to comply with Regulation 14 (d), Ld. Counsel submitted that this charge pertained to a past export and hence could not be maintained in the present proceedings. As regards the charge that the CHA had not complied with Regulation 14 (1), Ld. Counsel submitted that this charge was not specific inasmuch as any such document or order as mentioned in Regulation 14 (1) was not specified in the show -cause notice. Ld. DR reiterated the findings of the Commissioner. The first charge against the CHA is that, in relation to the 10 Shipping Bills filed by them on behalf of M/s A.K. Enterprises, they did not comply with the requirement of Regulation 14 (a). This regulation is to the effect a CHA should be duly authorized by the importer/exporter to transact business on his behalf with Customs authorities in respect of the import/export. The CHA should produce such authorisation if required by the Assistant Commissioner or Deputy Commissioner of Customs. In the instant case, all the Shipping Bills, which were filed by the CHA were duly signed by the exporter and the Department has no case that the CHA was not employed by the exporter to deal with the cargo. On these facts, the CHA is entitled to the benefit of the Tribunal's decision in the case of P.P. Dutta (supra). Accordingly, I find that the CHA cannot be held to have failed to comply with Regulation 14 (a). The second charge against the CHA is that they failed to comply with Regulation 14 (d), by not bringing the exporter's "non -compliance" to the notice of the Department. It is difficult to sustain this charge in the facts of this case. The CHA themselves had, upon finding that the export goods did not confirm to its description on the Shipping Bills, taken the initiative for getting the bills cancelled. This fact is apparently not in dispute. After cancellation of the Shipping Bills, the CHA had no obligation to advise his client to do anything other than to take back the goods. Hence, it cannot be held that the CHA failed to comply with Regulation 14 (d). The third charge relates to Regulation 14 (1). This regulation reads as under:

(3.) In the result, the impugned order is set aside and this appeal is allowed.