2011 (8) TMI 958 - AT - Customs

Smuggling activity - Custom House Agents License Regulation, 2004 - Since, the Appellant had handled three consignments in May 2010 of an importer who later on filed Bills of Entry in his own name and in such Bills of Entries some discrepancies (not clearly specified by Revenue) has been detected - Note that the license of the Appellant has remained suspended for almost one year and the Revenue had ample opportunity to conduct necessary investigation against any involvement by the Appellant - View that continuing suspension of the licence will be unduly harsh based on the evidence that has been so far brought to the notice of the Tribunal - Therefore, the suspension of their license should be revoked and we order accordingly - It is made clear the Revenue is at liberty to issue notice under Regulation 22 for revocation of license of the Appellant, if their involvement in any smuggling activity can be proved by acceptable evidence - Decided in favour of assessee.

Summary

Issues:
License suspension under CHALR for non-compliance with norms and circulars, involvement in smuggling activity, revocation of suspension order.

Analysis:
The Appellant, a Custom House Agent, had their license suspended for not complying with CHALR norms and circulars before conducting business for a client involved in smuggling activities. The Revenue alleged that the Appellant failed to verify client identity and address, as required by regulations, leading to smuggling facilitated by a dummy acting on behalf of the importer. The Appellant argued that they had taken reasonable steps to verify the client's identity and address, and no mis-declaration or duty evasion occurred in the consignments they handled. They emphasized the lack of evidence proving their involvement in smuggling and the undue hardship caused by the prolonged license suspension.

The Department contended that the Appellant's failure to verify the client's identity allowed smuggling activities to occur, emphasizing the responsibility of Custom House Agents to know their clients. They highlighted ongoing investigations into revenue loss and the Appellant's role in the smuggling case, suggesting that revoking the license suspension prematurely could harm revenue interests.

The Tribunal found that the evidence did not establish the Appellant's active involvement in smuggling, noting that the Appellant had only handled a few consignments for the importer in question. Considering the lengthy license suspension period and lack of conclusive evidence against the Appellant, the Tribunal deemed the continued suspension unduly harsh. Consequently, the Tribunal revoked the license suspension, allowing the Appellant's appeal. However, the Tribunal clarified that the Revenue could issue a notice for license revocation if the Appellant's involvement in smuggling was proven with acceptable evidence in the future.