2011 (4) TMI 1172 - AT - Customs

CHA - CHA had replaced the invoice and packing list accompanying the Bill of Entry filed, without the permission of the appropriate customs authority - employees of the CHA had forged the said documents Held that - illegal acts, misdeed by an employee cannot be said to have been committed with knowledge or connivance of the CHA or in the course of his employment with the CHA hence CHA cannot be held responsible for such acts, no specific allegations against the CHA giving reasons for revocation of the licence, the impugned order is not sustainable and is liable to be set aside, penalty of forfeiture of security deposit of Rs. 10,000/- imposed on the CHA is not justified and the same is vacated, appeal is allowed

Summary

Issues:
- Penalty imposed on Customs House Agent (CHA) for replacing documents without permission
- Compliance with Customs House Agents Licensing Regulations, 1984 (CHALR)
- Reliance on statements recorded under Section 108 of the Customs Act
- Disagreement between Commissioner and Tribunal's decision
- Applicability of Regulation 19(8) of CHALR
- Supervision by CHA over its employees
- Justification of penalty on CHA

Penalty Imposed on CHA:
The appeal filed by a Customs House Agent (CHA) sought to vacate a penalty of Rs. 10,000 imposed by the Commissioner of Customs for replacing documents without permission. The CHA was found guilty of non-compliance with CHALR, failing to ensure importer compliance with Customs Act provisions, and submitting inaccurate documents. The Commissioner upheld the penalty, differing with the Tribunal's previous decision on reliance on Section 108 statements.

Compliance with CHALR:
The CHA argued that the enquiry officer did not conduct a proper inquiry as required by CHALR Regulation 23. They contended that reliance on Section 108 statements was inappropriate for CHALR proceedings. The Commissioner disagreed with the Tribunal's decision in a previous case, justifying reliance on Section 108 statements. The CHA invoked a case where the Tribunal vacated a license revocation due to employee fraud without CHA knowledge.

Regulation 19(8) and Supervision:
The Tribunal referenced a case where Regulation 19(8) could not be applied if employee acts were unknown to the CHA. The CHA's penalty was questioned regarding supervision over employees, as termination of involved employees indicated some level of control. The Tribunal found the penalty unjustified based on the CHA's track record and lack of direct involvement in the document forgery.

Conclusion:
The Tribunal set aside the penalty, emphasizing the CHA's lack of direct involvement in employee misconduct and the termination of involved employees. The decision highlighted the importance of CHA supervision over employees and the inapplicability of penalties when employee acts were unknown to the CHA. The penalty of Rs. 10,000 was deemed unjustified and vacated, ultimately allowing the appeal.