2012 (11) TMI 531 - AT - Customs

CHA mis-declaration alleged that during the course of investigation, the DRI recorded a statement of Shri Mukesh Thakkar, Proprietor of the appellant firm wherein the appellant under duress admitted mis-declaration - Held that - Based on a retracted statement without any corroborative evidence, this charge cannot be established - during the inquiry proceedings, the exporter as also the employee of Shri Vijay Mange have testified the licence was not sublet at all and the transaction was undertaken by the appellant himself - none of the charges imputed against the appellant have any basis. Further the investigating officers, whose cross-examination was sought for by the appellant, never presented themselves for cross examination during the inquiry proceedings, thereby denying the appellant a reasonable opportunity to prove his case - charges have been proved does not stand any legal scrutiny and is perverse and bad in law In favor of assessee

Summary

Issues:
- Misdeclaration of goods under export
- Violation of CHALR 2004 regulations
- Sub-letting of CHA license
- Failure to transact business personally
- Non-exercise of due diligence
- Non-discharge of duty with utmost speed and efficiency
- Violation of principles of natural justice

Misdeclaration of goods under export:
The appellant, a Custom House Agent (CHA), was accused of knowingly misdeclaring goods as basmati rice when they were non-basmati rice. However, the Regional AGMARK laboratory confirmed the goods were indeed basmati rice. This crucial evidence was not considered during the inquiry and adjudication. As the misdeclaration charge was disproved, the basis for other violations related to misdeclaration also fell apart.

Violation of CHALR 2004 regulations:
The appellant was charged with various violations of CHALR 2004, including failure to advise the client to comply with Customs Act provisions and non-exercise of due diligence. However, the appellant had followed procedures based on the APEDA certificate provided by the exporter, indicating basmati rice. The charges related to misdeclaration in shipping bills were not substantiated, leading to the dismissal of other alleged violations.

Sub-letting of CHA license and other allegations:
The appellant was accused of subletting the CHA license, which was denied by the alleged sub-lessee and other witnesses. The statement incriminating the appellant was retracted promptly, and no corroborative evidence was presented. The inquiry lacked cross-examination of investigating officers, violating principles of natural justice. Ultimately, the charges against the appellant were found to be baseless, and the revocation of the CHA license was deemed unjust and legally unsustainable.

Conclusion:
The Tribunal found that the charges against the appellant were not substantiated, as crucial evidence proving misdeclaration was ignored, and witness testimonies contradicted the allegations. The order revoking the CHA license was deemed legally flawed and set aside, with the appeal allowed. The failure to provide a fair opportunity for the appellant to defend against the charges highlighted serious flaws in the inquiry proceedings, leading to the decision in favor of the appellant.