2011 (11) TMI 333 - HC - Customs

CHA agent prohibition from working as CHA agent petitioner attempting illegal exportation of restricted commodity Muriate of Potash MOP - petitioner was also found involved in sub-letting his CHA license petitioner urged that any illegal act of the employees cannot bind the CHA - Held that - Regulation 13 read with Regulation 19 (8) would make it obligatory on the part of the CHA to be responsible for the action of its employees. Regulation 12 provides that CHA license is not transferable and Regulation 19 (8) prescribes that CHA should exercise such control/supervision as may be necessary to ensure proper conduct of such employees in transaction of business as CHA and he be held responsible for all acts or omissions of his employees in regard to their employment. Regulation 20 envisages revocation of licence of Customs House Agent on his failure to comply with any of the regulations as also on account of any misconduct on his part. Therefore it appears to be a prima facie case indicating direct involvement of both the employees of the petitioner in exporting restricted commodity and consequently that of petitioner in violating regulations as discussed. Petition therefore deserves no meritorious consideration Decided against the petitioner

Summary

Issues:
Challenge to order prohibiting petitioner from working as CHA agent at Pipavav Port.

Analysis:
The petitioner, a registered Customs House Agent (CHA), was prohibited from working at Kandla and Mundra under Regulation 9(2) of the Customs House Agent Licensing Regulations, 2004. The prohibition was based on allegations of involvement in illegal exportation of a restricted commodity, Muriate of Potash (MOP). The Commissioner of Customs, Kandla, issued the prohibition order citing violations of CHALR, 2004 and failure to fulfill obligations under regulations. The petitioner appealed to CESTAT, which found no authority to interfere with the prohibition order, leading to the challenge in the High Court.

The Commissioner's order was challenged on grounds of contravention of natural justice, lack of opportunity for a hearing, and the impact on the petitioner's livelihood. The petitioner argued that without concrete evidence linking them to the alleged misdeeds of employees, the prohibition was unjust. The respondent contended that the petitioner's involvement in illegal activities warranted the prohibition, emphasizing the CHA's responsibility for employee actions under the regulations.

The High Court analyzed the regulations governing CHAs, highlighting the obligations and responsibilities imposed on them. Regulation 13 and 19(8) hold CHAs accountable for employee actions, emphasizing supervision and control over employees' conduct. The Court noted that the petitioner's failure to supervise employees and unauthorized sub-letting of the CHA license led to alleged illegal activities, justifying the prohibition order.

The Court declined to delve into factual findings or innocence claims, stating that ongoing investigations and separate proceedings would address those matters. The focus remained on the legality of the prohibition order under Regulation 21. The Court cited precedents related to suspension and clearance issues involving CHAs, emphasizing shared responsibilities between CHAs and customs officers.

Ultimately, the Court found prima facie evidence of the petitioner's involvement in illegal activities through employees, supporting the prohibition order. The petitioner's plea for quashing the order was rejected, with a directive for timely completion of pending proceedings under Regulation 22. The judgment dismissed the petition, emphasizing the need for compliance with regulations and due process.

In conclusion, the High Court upheld the Commissioner's prohibition order, emphasizing CHA responsibilities, employee supervision, and regulatory compliance. The judgment underscored the ongoing investigative processes and the importance of completing pending proceedings promptly.