2011 (6) TMI 445 - AT - Customs

Licence of CHA - revocation - appellant alleged of subletting its licence by signing blank Bills of Entries and shipping bills and handing over to other parties who filed documents in the name of the Appellant - Held that - Custom House Agents License is not on instrument to seek rental income for putting signatures on blank documents. During the relevant time itself the Appellant was not doing any active job of CHA except signing documents. Since Commissioner is responsible for the happenings in the Customs area and for the discipline to be maintained thereat. If he takes a decision necessary for that purpose the CESTAT would ordinarily not interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or their employees no reason to interfere with the impugned order - See Worldwide Cargo Movers case 2006 (11) TMI 281 - BOMBAY HIGH COURT . Decided against the appellant

Summary

Issues:
1. Revocation of Custom House Agents license under CHALR 2004.
2. Allegations of serious misconduct leading to revenue loss.
3. Appeal for restoration of license based on hardship faced by proprietor.
4. Recovery of substantial amount post fraud detection.
5. Comparison with a similar case where license revocation was not warranted.

Issue 1: Revocation of Custom House Agents license under CHALR 2004
The judgment discusses the revocation of a Custom House Agents (CHA) license held by an Appellant firm under the Custom House Agents Licensing Regulation 2004 (CHALR). The Appellant's license was initially suspended due to non-compliance with regulations, and subsequently, a notice for revocation was issued and adjudicated leading to the final revocation of the license.

Issue 2: Allegations of serious misconduct leading to revenue loss
The Department alleged serious misconduct by the Appellant, involving subletting the license by signing blank Bills of Entries and shipping bills, leading to fraudulent activities causing a substantial revenue loss of Rs. 6.50 crores. The Appellant was accused of allowing others to forge entries, manipulate DEPB scrips, and deceive the Government, resulting in financial harm.

Issue 3: Appeal for restoration of license based on hardship faced by proprietor
The Appellant sought the restoration of the license, citing hardship faced by its proprietor due to being out of business for six years. The Appellant argued that the punishment of being out of business was sufficient and requested the license be reinstated to resume operations.

Issue 4: Recovery of substantial amount post fraud detection
Following the detection of fraud, the Appellant took steps to assist in recovering the lost revenue. An affidavit submitted by the Appellant detailed the recovery of approximately Rs. 2.28 crores from 12 out of 14 involved importers. The Tribunal noted that the recovery was primarily from those who had misused the signed documents provided by the Appellant.

Issue 5: Comparison with a similar case where license revocation was not warranted
The judgment referenced a similar case where a CHA license was revoked but later restored by the Tribunal. The Revenue appealed this decision, leading to a High Court ruling that questioned the proportionality of punishment imposed on CHAs. The High Court emphasized the need for a balanced approach considering the gravity of the offense and mitigating circumstances before revoking a license permanently.

In conclusion, the Tribunal rejected the Appellant's appeal for license restoration, emphasizing the serious nature of the misconduct, the revenue loss incurred, and the lack of active involvement in CHA operations by the Appellant. The decision was influenced by legal principles regarding proportionality of punishment and the need for disciplinary actions in cases of serious infractions under fiscal statutes.