2009 (7) TMI 1105 - AT - Customs

Smuggling - export of prohibited item - red sanders - forged export documents - suspension of CHA licence

Summary

Issues Involved:
1. Delay in suspending the CHA license.
2. Urgency and gravity of the offence.
3. Violation of procedure under Regulation 22.
4. Hardship due to suspension.
5. Role and responsibility of the CHA.

Detailed Analysis:

1. Delay in Suspending the CHA License:
The appellant contested the suspension on the grounds of delay, citing judgments from the Bombay High Court which upheld the revocation of suspensions due to delays. However, the respondent argued that the delay should be measured from the time the Commissioner was informed, not from when the offense occurred. The Tribunal found no delay on the part of the Commissioner, who suspended the license within seven days of receiving the information.

2. Urgency and Gravity of the Offence:
The appellant argued that there was no urgency as no grave offence was committed. However, the respondent highlighted the seriousness of the offense, involving the smuggling of prohibited red sanders using forged documents. The Tribunal agreed with the respondent, noting that allowing a third person to use the CHA license for monetary benefits was itself a violation. The Tribunal also observed that the appellant failed to verify the authenticity of the exporter and the documents, and even attempted to misguide the officers.

3. Violation of Procedure under Regulation 22:
The appellant claimed that the suspension violated Regulation 22 as they were not given a copy of the DRI report or a hearing, thus breaching natural justice principles. The Tribunal, referencing multiple judgments, held that Regulation 22(1) does not need to be followed in cases requiring immediate action under Regulation 20(2). Therefore, the Commissioner was empowered to suspend the license without prior notice or hearing.

4. Hardship Due to Suspension:
The appellant argued that the suspension caused undue hardship as they had been out of business for a year. The Tribunal, however, cited a Bombay High Court judgment stating that disciplinary measures are necessary for maintaining customs area discipline and should not be interfered with based on the difficulties faced by the CHA or its employees unless the decision is shockingly disproportionate or mala fide.

5. Role and Responsibility of the CHA:
The Tribunal emphasized the importance of the CHA's role and responsibilities under the Customs Act, supported by various high court and tribunal decisions. The appellant's major lapses in conduct, including failing to obtain authorization from the exporter and misleading authorities, justified the suspension.

Conclusion:
The Tribunal upheld the Commissioner's order of suspension, directing the Revenue to complete the enquiry within six months. The decision underscored the gravity of the offense, the CHA's violations, and the necessity of immediate action without prior notice or hearing in such cases. The plea of hardship was not considered sufficient to revoke the suspension.