2015 (6) TMI 1106 - AT - Customs

Revocation of CHA licence - forfeiture of security deposit - overvalued consignment of scarves, was being attempted to be exported from D Node CFS - the 4 Shipping Bills dated 15-3-2012 of the exporter namely M/s. Galaxy Export, New Delhi were amended by filing four more Shipping Bills showing lesser FOB value and consequently lesser drawback - Held that - The regulations mandate that the CHA should verify the antecedents of the exporter, the identity and functioning of his client at the declared address by using reliable independent and authentic information. This was not done by the appellant. In fact the appellant had simply obtained the export documents from Shri Deepak Joshi who had received the same from Shri Kunal who was not an authorized representative of the exporter. In this view of the matter, we find that the violation of Regulation 13(o) is established. Regarding violation of Regulation 19(8), it is seen that Shri Sanjay Gawand signed the request letter for amendment of Shipping Bills despite being a temporary pass holder of the CHA, who is not authorized to sign such documents. The CHA admits that this happened due to inadvertence. Therefore violation of Regulation 19(8) is established in that the CHA exercised no control in ensuring that his employees do not make any omissions or commissions in violation of the Regulations. Rather the presence of Shri Deepak Joshi everywhere does indicate that the CHA was getting some work done through unauthorized people. We note the elements of negligence and total disregard to Regulations 13(o) & 19(8). It would meet the ends of justice if the revocation of license is continued till 31-12-2015. The continuation of revocation till 31-12-2015. However, the license is ordered to be made operative from 1-1-2016. The security deposit is also ordered to be forfeited - appeal disposed off - decided partly in favor of appellant.

Summary

Issues: Appeal against revocation of CHA license and forfeiture of security deposit.

Analysis:
1. The appellant, a Licensed Custom House Agent (CHA), appealed the revocation of their license by the Commissioner of Customs (General) Mumbai. The issue arose when the CHA filed new Shipping Bills for a consignment initially carted under different bills, resulting in a reduction of drawback claim. The Revenue alleged that the amendments were made to avoid detection, leading to the suspension and subsequent revocation of the CHA license.

2. The appellant contended that the Commissioner's order lacked reasoning and failed to consider their legal arguments. They argued that the inquiry process exceeded time limits, witnesses were not produced for cross-examination, and additional charges were added without proper notice. The appellant claimed they followed correct procedures for Shipping Bill amendments and did not violate relevant regulations. They also argued that the punishment was disproportionate to the alleged offense.

3. The Assistant Commissioner supported the Commissioner's findings, citing delays caused by the appellant in the inquiry process. He highlighted the non-appearance of key witnesses for cross-examination and defended the Commissioner's authority to increase charges during the inquiry. The Assistant Commissioner relied on witness statements as corroborative evidence.

4. The Tribunal analyzed the violations alleged by the Commissioner, including Regulations 12, 13(b), 13(d), 13(p), 13(n), 13(o), and 19(8). It found that the evidence did not conclusively prove sub-letting of the license or significant violations of the regulations. The Tribunal scrutinized each alleged violation and concluded that most were not sufficiently established based on the evidence presented.

5. While acknowledging negligence and disregard for specific regulations, the Tribunal deemed the permanent revocation of the license too severe. Instead, it ordered the continuation of the revocation until a specified date, considering the elements of negligence and non-compliance. The Tribunal balanced the severity of the penalty with the absence of proven fraud in the case.

6. Ultimately, the Tribunal ordered the continuation of the license revocation until a specified date and the forfeiture of the security deposit, aiming to balance the enforcement of regulations with the proportionality of the penalty. The judgment was pronounced on 10-6-2015.