2006 (12) TMI 280 - AT - Customs

Customs House Agent s Licence - fraudulent export - forfeited the security deposit - Revocation of licence - HELD THAT - The examination of Mr Gala reveals that he was only getting commission for procuring business for the appellant and was acting as a representative of M/s Payal Exim. The export goods were electrodes which were found to be electrodes only through of inferior quality. CHA is not under any obligation to verify the quality of the goods or to verify value of the same. As such, if the goods to be exported by M/s Payal Exim has been found to be lesser value, the appellant, as a CHA, cannot be blamed for the same. As such, we are of the view that revocation of his licence is neither justified nor warranted. The same is accordingly set aside and the appeal allowed with consequential relief.

Summary

Issues:
Revocation of CHA Licence based on alleged violation of Custom House Agents Licensing Regulations, 2004.

Analysis:
The Commissioner of Customs revoked the CHA Licence of the appellant and forfeited the security deposit due to allegations of violation of Custom House Agents Licensing Regulations, 2004. The proceedings were initiated based on a fraudulent export case involving M/s Payal Exim, handled by the appellant. The disputed goods, declared as welding electrodes, were found to be of low quality and lesser value. Mr. Jayesh Gala, involved in the export fraud, admitted the offense and was arrested.

During the enquiry, statements of Mr. Bhagwan Sippy, Chief Executive Officer, were recorded, indicating that Mr. Jayesh Gala was not an employee but used the CHA license on a commission basis. The Enquiry Officer's report upheld the charges against the CHA, leading to the revocation of the license by the Commissioner. The appellant contended that the Enquiry Officer's report was flawed, urging independent consideration of the allegations based on cross-examination results.

The Revenue argued that the appellant handled M/s Payal Exim's export without meeting the owner, alleging misutilization of the license. However, it was revealed that Mr. Jayesh Gala brought business to the appellant and was not acting as a CHA under the license. Mr. Gala's examination confirmed his role as a representative of M/s Payal Exim, receiving commission for procuring business. The CHA's responsibility does not extend to verifying goods' quality or value for export, absolving the appellant of blame for discrepancies.

The appellate tribunal found that the revocation of the CHA license was unjustified and unwarranted. The decision was set aside, and the appeal was allowed with consequential relief. The tribunal emphasized that Mr. Bhagwan Sippy, not the CHA firm, was involved in aiding and abetting export fraud, further supporting the reversal of the Commissioner's order.