2006 (12) TMI 406 - AT - Customs

Customs House Agent s Licence - Revocation of CHA licence - HELD THAT - We find that it is an admitted fact that the appellant has allowed Shri Vipual Shah to carry on business on monthly rental basis or a consignment basis which has resulted in fraudulent exports by his client whose credentials were not looked in to by the CHA. This cannot be considered as a mere commission agent being employed by the CHA. In fact no authorization from the customer in favour of the CHA is on record and the copy produced by the appellant is without any date and there is no evidence that it was procured before taking up the business of the exporters in question. On the other hand the appellants contend that the same was recovered by the DRI but could not show any panchnama to that effect. Thus, we find that the licence has been suspended for the last two years and has now been revoked permanently. We consider it too harsh a punishment as it deprive the CHA of his livelihood. We consider that revocation for a period of three years from the date of suspension of licence (i.e. 1-3-2004) would be sufficient and on expiry of three years licence may be restored on taking fresh security deposit as we confirm the order of the Commissioner in forfeiting the security deposited by the appellant earlier. Appeal is partly allowed as per above terms.

Summary

Issues: Revocation of CHA licence and forfeiture of security deposit.

Detailed Analysis:
1. The appellants were aggrieved by the Commissioner of Customs, Mumbai's order revoking their CHA licence and ordering the forfeiture of their security deposit. The investigation revealed that the appellants allowed unauthorized persons to use their CHA licence for monetary consideration, resulting in fraudulent exports without physical goods movement.

2. The suspension of the appellants' licence in 2004 led to an enquiry, culminating in the revocation order in 2005 due to established charges of unauthorized use of the licence, failure to obtain authorization from exporters, and lack of verification of client credentials. The appellants argued that the evidence was based on a retracted statement and that using a commission agent did not constitute subletting. They claimed to have obtained necessary documents and authorization from exporters, although discrepancies were noted.

3. The advocate contended that the Commissioner's findings were flawed and emphasized the appellants' compliance with regulations. However, the Departmental Representative argued that the unauthorized use of the licence led to revenue loss and cited relevant case law to support their position.

4. The Tribunal found that the appellants had indeed allowed unauthorized use of their licence, leading to fraudulent exports without proper verification of client credentials. Despite the appellants' arguments, the lack of documented authorization and failure to produce evidence of compliance were noted. The Tribunal referenced previous decisions to support the finding of subletting the licence.

5. Ultimately, the Tribunal partially allowed the appeal, considering the harshness of the penalty imposed. The revocation was reduced to a three-year period from the date of suspension, with the requirement to provide a fresh security deposit upon restoration of the licence. The forfeiture of the security deposit was upheld, balancing the punishment with the appellants' livelihood concerns.

This detailed analysis showcases the key arguments, findings, and the final decision in the legal judgment regarding the revocation of the CHA licence and forfeiture of the security deposit.