2005 (9) TMI 394 - AT - Customs

Summary

Issues:
1. Allegations of fraudulent claim in excess of duty drawback by exporter.
2. Suspension and subsequent cancellation of Custom House Agent (CHA) license.
3. Failure of supervision by CHA.
4. Violations of various regulations under CHALR, 1984.

Analysis:

Issue 1: Allegations of fraudulent claim
The case involved allegations of a fraudulent claim by an exporter in excess of the duty drawback on goods meant for export. The Directorate of Revenue Intelligence Officers initiated inquiries leading to the suspension and subsequent cancellation of the CHA license based on these allegations.

Issue 2: Suspension and cancellation of CHA license
The Tribunal initially set aside the suspension order to allow for further inquiry under CHALR, 1984. However, the Commissioner later canceled the CHA license and forfeited the security deposit based on findings that the CHA failed to supervise its employee adequately, leading to the alleged fraudulent activities. The appeal challenged this decision.

Issue 3: Failure of supervision by CHA
The Enquiry Officer's report highlighted the CHA's failure to supervise its employee, who was involved in the alleged fraudulent activities. The Commissioner relied on this failure of supervision to justify the cancellation of the CHA license.

Issue 4: Violations of CHALR, 1984 regulations
The appeal addressed various charges brought against the CHA under different regulations of CHALR, 1984. These charges included failure to advise the client to comply with legal provisions, withholding information from the Customs Commissioner, and lack of supervision over employees. The Tribunal found that the CHA did not violate these regulations and set aside the cancellation of the license.

In conclusion, the Tribunal found no merit in upholding the charges against the CHA firm. It was determined that the CHA could not be held responsible for the alleged fraudulent activities of the exporter, as there was no evidence of the CHA's involvement or knowledge in the wrongdoing. Therefore, the appeal was allowed, and the order canceling the license and forfeiting the security deposit was set aside.