2016 (11) TMI 1468 - AT - Customs

Forfeiture of security deposit without revoking CHA license - Held that - reliance placed in the decision in the case of V.B. Bhatia & Co 2005 (9) TMI 200 - CESTAT, MUMBAI which is a majority decision, where it was held that forfeiture of security goes hand in hand with the order-of revokation and if the order of revokatioin of licence cannot be upheld, question of upholding only forfeiture of security does not arise - forfeiture of security deposit set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Forfeiture of security amount in the case of CHA license holders without revocation of the license.

Analysis:
The judgment by the Appellate Tribunal CESTAT New Delhi dealt with the issue of forfeiture of security amount in the absence of revocation of the CHA license. The Commissioner of Customs had forfeited a security amount of ?50,000 without revoking the license, based on Regulation 20(1) of the CHALR, 2004 (Regulation 18 of the CHALR), 2013. The appellant challenged this decision, citing the Tribunal's decision in the case of V.B. Phatia & Co. Vs. CC, Mumbai, where it was held that forfeiture of security is linked to the revocation of the license. The Tribunal referred to a subsequent decision in the case of Larsen & Toubro, stating that majority decisions are considered as Larger Bench decisions and must be followed by the Tribunal.

The Tribunal noted that the Revenue had appealed the earlier decision to the Hon'ble Bombay High Court, and the appeal was rejected, affirming the decision that forfeiture of security is contingent upon the revocation of the license. Despite the ld. DR presenting contrary decisions, the Tribunal emphasized that the decision in the V.B. Bhatia & Co case was a majority decision and, as per the latest legal position, should be treated as a Larger Bench decision. Therefore, the Tribunal set aside the forfeiture of the security amount of ?50,000, as it was not justified without the revocation of the license. The appeal was allowed based on this determination.

In conclusion, the judgment clarified that forfeiture of security in the case of CHA license holders must be directly linked to the revocation of the license. The decision in the V.B. Bhatia & Co case, considered a Larger Bench decision, was upheld, and the forfeiture of the security amount without revocation was deemed inappropriate. The Tribunal's ruling set a precedent for future cases involving similar issues, emphasizing the importance of aligning the forfeiture of security with the revocation of licenses in such matters.