2011 (11) TMI 143 - AT - Customs

Revocation of Custom House Agent (CHA) license - appellant alleged of not checking the authenticity of the merchant exporter / importer - Held that - CHA should not have acted without authorization on behalf of its client but at the same time it was duty of the Customs Officer to check the authorization in favor of CHA before allowing him to act as CHA for the importer/exporter. Appellant is out of business since January, 2009 is sufficient punishment therefore, the order of revocation of CHA license is withdrawn.

Summary

Issues:
1. Revocation of CHA licence
2. Allegations of diversion of goods
3. Compliance with CHALR, 2004

Revocation of CHA licence:
The appellant, a Clearing House Agent (CHA), filed appeals against the suspension and subsequent revocation of their CHA licence by the Commissioner of Customs. The appellant sought withdrawal of the appeals as they had become infructuous. The Tribunal dismissed the appeals as withdrawn. Another appeal was filed against the revocation of the CHA licence based on allegations of fraudulent activities by certain merchant exporters. An enquiry found the charges against the CHA to be proved, leading to the revocation of the licence under Regulation 22(7) of CHALR, 2004.

Allegations of diversion of goods:
The case involved allegations of diversion of goods by the CHA in collusion with certain merchant exporters. The investigation revealed discrepancies in the export declarations and fraudulent activities related to duty exemptions. The appellant was accused of not verifying the authenticity of the exporter/importer, colluding with them, and failing to notify Customs/Central Excise about the diversion of goods. The charges included violations of various regulations under CHALR, 2004.

Compliance with CHALR, 2004:
During the hearing, the appellant's counsel argued that obtaining proper authorization from the importer/exporter was the main charge against the CHA. They contended that the Bill of Entry signed by the importer sufficed as authorization, and there was no requirement for a specific format for authorization. The counsel cited precedents where the Tribunal and High Court held that signatures on prescribed forms by the importer/exporter constituted compliance. The Authorized Representative opposed, citing a case where a CHA's licence was rightly revoked for breach of statutory regulations and misconduct. After considering arguments from both sides, the Tribunal found that the main allegation of acting without proper authorization was substantively complied with, and the revocation of the CHA licence was withdrawn subject to a forfeiture from the security deposit.

In conclusion, the Tribunal allowed the appeal, withdrawing the revocation of the CHA licence, emphasizing the importance of verifying authorization from importers/exporters while also considering the CHA's compliance with relevant regulations and past precedents.