2013 (4) TMI 625 - AT - Customs

Suspension of license as a Custom House Agent - charge made is that these exports were of inferior quality of goods and the goods were over priced by the exporters for availing ineligible drawback. - appellant filed the shipping bills without verification of the identity of the exporters Held that - In this case, we find that no direct involvement of the CHA in fraudulent export of the goods and claim of the drawback is proved except that he filed shipping bills in those cases. If any evidence has been unearthed during further investigation conducted that has not been placed before the Tribunal. Further considering the time that has passed, the time limit indicated in Circular No. 9/2010-Cus., dated 8th April, 2010 for issue of final notice for revocation of license is already over. Such notice has not been issued so far. In such a circumstances, we are of the view that it is proper to revoke the impugned order suspending the licence of the appellant.

Summary

Issues:
1. Suspension of Custom House Agent license under Regulation 20(3) of the Customs House Agents Licensing Regulations, 2004.
2. Allegations of filing shipping bills for export of inferior quality goods for ineligible drawback without verifying exporters' identity.
3. Compliance with Circular No. 9/2010-Cus. regarding "Know Your Client" norms.
4. Delay in taking action against the Custom House Agent.
5. Review of suspension of license based on gravity of the act, extent of involvement, and time lapsed.

Detailed Analysis:
1. The appellant challenged the suspension of their Custom House Agent license under Regulation 20(3) based on an order confirming the suspension due to allegations of filing shipping bills for export of inferior quality goods for ineligible drawback without verifying exporters' identity. The suspension was based on a report forwarded by investigating officers after a significant delay from the alleged incident to the suspension order.

2. The primary charge against the appellant was the failure to comply with Circular No. 9/2010-Cus. by not strictly following the "Know Your Client" norms, which put the responsibility on the Custom House Agent. The appellant argued that the responsibility primarily lies with the exporters for any fraudulent claims and that they had not benefited significantly from the alleged misdeeds. They highlighted the delay in taking action against them and emphasized that the suspension had caused a significant period of business inactivity.

3. The appellant contended that the suspension order should be revoked as the department failed to comply with the time frame prescribed in Circular No. 9/2010-Cus. for taking action against erring Custom House Agents. They cited previous decisions where delays in taking action led to the revocation of suspension orders, seeking similar treatment.

4. The Tribunal considered the arguments from both sides and emphasized the need for periodic review of license suspensions based on factors such as the gravity of the act, extent of involvement, and time lapsed since the event. They noted the lack of evidence showing direct involvement of the appellant in fraudulent activities and the failure to issue a final notice for license revocation within the prescribed time frame.

5. Ultimately, the Tribunal decided to revoke the suspension order, clarifying that it did not prejudice the Revenue's right to issue a notice disclosing collected evidence of direct involvement for further proceedings. The appeal was allowed, emphasizing the need for proper review and adherence to procedural requirements in such cases.