Saini Consultants vs CESTAT, New Delhi

M.M. Kumar, J.—The instant appeal u/s 130 of the Customs Act, 1962 (for brevity, ''the Act'')/ is directed against order dated 3-8-2011 (P-1) [2011 (273) E.L.T. 516 (Tribunal)], passed by the Principal Bench of the Customs, Excise and Service Tax Tribunal (for brevity, ''the Tribunal''). According to the provisions of Section 130, an appeal of this nature could only be admitted if there is a substantive question of law raised by the parties. The question raised in the instant petition is whether a Customs House Agent (CHA) sublet his licence by signing blank papers and get absolved by arguing that he has not committed fraud which his agent might have. A perusal of the order passed by the Tribunal would show that categorical findings of fact have been recorded. From the affidavit filed by the appellant it has been found that ` 2.28 crores have been recovered from imports made by 12 out of the 14 importers involved in the unlawful transactions. The Tribunal further held that those persons to whom the appellant had given blank signed papers had cheated the Government and it was not surprising that bulk of the amount was recovered after the fraud was detected. The appellant handed over signed blank documents to others and allowed them to operate in his name. After the commission of fraud by such persons, the appellant put forward the plea of alibi.

The Tribunal has recorded further findings in categorical terms that the license given to the Customs House Agents is not an instrument to seek rental income for putting signatures on blank documents. It has also been found that during the period in question the appellant was not doing any active job of Customs House Agent and was busy only signing the documents and that there was no reason to give any opportunity to the appellant to seek such income exposing the revenue to huge risk.

We have heard Learned Counsel for the appellant at a considerable length and are of the view that there is no error in the order passed by the Tribunal. The findings have been recorded in categorical terms which resulted into order of revocation of CHA license issued to the appellant and also forfeiture of guarantee furnished by it.

The argument of the appellant through its counsel is that no opportunity to cross-examine the witnesses was afforded. However, we find that it is too late in the day to raise such an issue. The Tribunal after detailed consideration has dismissed the appeal upholding the order of the Commissioner passed on 31-3-2009 (P-2) revoking the license of the appellant. It is appropriate to mention that the Commissioner of Customs (Preventive) has recorded categorical findings with regard to forging the signatures of the officers of the Customs Department, who were posted for registration of DEPB license and debiting the Customs duty involved against forged entries. They would also present fake TR Challans showing fake entries in the bank. Once these findings are there then no question of law much less a substantive question of law would arise. Moreover, if a power of attorney holder of a Customs House Agent commits fraudulent activities then the principal is responsible to the same extent. In that regard the reliance may be placed on the view expressed by the Madras High Court in the case of Sri Kamakshi Agency Vs. Commissioner of Customs, Custom House, Rajaji Salai, Madras 1, ). The pertinent observations made by the Madras High Court in para 9 of the judgment reads as under:-

9........The grant of licence to a person to act as Custom House Agent is to some extent to assist the Department with the various procedures such as scrutinizing the various documents to be presented in the course of transaction of business for entry and exit of conveyances or the import or export of the goods. In such circumstances, great confidence is reposed in a Custom House Agent. Any misuse of such position by the Custom House Agent will have far reaching consequences in the transaction of business by the Custom House Officials. Therefore when the applicant who had thirty years of experience as Custom House Agent, when he paved the way for his Power of Attorney to indulge in serious malpractices which ultimately resulted in loss of revenue to the Custom House to the extent of more than 80 lakhs, there is every justification in the respondents in treating the action of the applicant as detrimental to the interest of the nation and pass the final order of revoking his licence. As far as the allegations leveled against the applicant are concerned, it has been found established that the Proprietor of the Applicant Thiru Natarajan had signed on certain blank documents such as Bs/F and S/Bs without knowing the importers/exporters and the nature of goods imported/exported inspite of being in the clearing line over thirty years. It is also admitted that Sri D. Sukumaran, Manager cum Power of Attorney of the Custom House Agent concerned, had actively involved in the fraudulent act in connivance with the importers and others and that as per the Power of Attorney Bond executed by Sri K. Natarajan, all acts, deeds and things done by Sri D. Sukumaran were to be construed as if they were done by himself. Therefore virtually all the fraudulent activities carried out by the Power of Attorney of Thiru Natarajan were to be treated as having been carried out by Thiru K. Natarajan himself. Even assuming that the role played by Thiru D. Sukumaran is to be construed as that of an employee of the applicant, the same would not in any way alter the situation since that had resulted in a serious loss to the respondent. The fact remains that the respondent sustained a loss of duty by the reckless and irresponsible behavior of the applicant in the course of discharge of his functions as Custom House Agent licensee.........

It is pertinent to notice that challenging the judgment of the Madras High Court, SLP (Civil) No. 631 of 2001, was filed by Sri Kamakshi Agency (supra), which has been dismissed on 22-1-2001. In other words, the opinion expressed by the Madras High Court has attained finality. Accordingly, the instant appeal does not merit admission and the same is dismissed.