2006 (8) TMI 486 - AT - Customs

Summary

Issues:
1. Suspension of Customs House Agent (CHA) license under Regulation 20(2) of CHALR, 2004.
2. Compliance with obligations under Regulations 13 and 19(8) by the CHA.
3. Procedure followed for suspension under Regulation 20 and the order for forfeiture of security deposit.

Analysis:

Issue 1: Suspension of CHA License
The Commissioner suspended the CHA license under Regulation 20(2) of CHALR, 2004 based on findings of collusion with exporter for smuggling Red Sanderswood. The CHA failed to discharge obligations under Regulations 13 and 19(8), leading to the suspension of the license for 18 months and forfeiture of the security deposit of Rs. 25,000.

Issue 2: Compliance with Obligations under Regulations 13 and 19(8)
The CHA contravened Regulations 13(a), (b), (d), and (e) by not transacting business personally or through authorized employees, failing to advise clients on Customs Act provisions, and neglecting to ensure correctness of export documents. The Commissioner found the CHA in violation of Regulation 19(8) for not supervising employees' conduct during business transactions.

Issue 3: Procedure for Suspension and Forfeiture
Regulation 22 outlines the procedure for suspending or revoking a license, including issuing a notice with grounds and appointing an inquiry officer. The Commissioner followed this procedure by issuing a notice to the CHA but did not appoint an inquiry officer. However, the order for forfeiture of the security deposit along with suspension was deemed unauthorized under Regulation 20(1), leading to its set aside.

In conclusion, the appeal was partially allowed, modifying the suspension period to end on 31-12-2006 without forfeiture of the security deposit. The judgment highlighted the importance of complying with CHA regulations and the correct application of legal provisions in license suspension cases.