2013 (7) TMI 248 - AT - Customs

CHA licence has been suspended - A case of fraudulent import of Refrigerant gas dated 07/01/2012 was detected by the Customs (Preventive) staff - The samples of the consignment drawn and got tested and as per the test report dated 27/01/2012. The gas was found to be 100% HCFC R-22 instead of the declared gas of HCFC R-404A. The assessee was the CHA who filed the bill of entry - A statement of the assessee was recorded on 08/02/2012 - After conducting the investigation in the matter, a show-cause notice was issued dated 27/07/2012 - On 13/12/2012 the CHA licence of the assessee was suspended- Held that - Declaration made in the bill of entry by the CHA is in accordance with the description of the goods given in the commercial invoice issued by the foreign supplier and also in terms of the licence issued by the DGFT, New Delhi. If the goods are found to be different from those what has been declared in the bill of entry, the department can proceed against the importer and not against the CHA who acts based on the documentary evidence submitted by the importer - There is no proximity between the action of suspension and the act of filing the bill of entry - The bill of entry was filed in January 2012 and the test report indicating that the goods imported were different from those given in the import documents was also known to the department as early as January 2012 - A show-cause notice was also issued to the importer and the appellant proposing confiscation of the goods in July 2012 - Cause of action viz., filing the bill of entry took place in January 2012 whereas the suspension has been ordered in December, 2012 - Not any proximity in time between the two events - Set aside the impugned order suspending the CHA licence of the CHA - Customs are at liberty to conduct the inquiry as provided for in the CHALR 2004 and on completion of inquiry, take action against the appellant, if required. In favor of Assessee.

Summary

Issues:
1. Suspension of CHA license for fraudulent import of goods.
2. Proximity between suspension and offense committed.
3. Compliance with import documents and DGFT license.
4. Emergency power to suspend CHA license.

Issue 1: Suspension of CHA license for fraudulent import of goods
The appeal challenged the suspension of a Customs House Agent (CHA) license due to a case of fraudulent import of "Refrigerant gas." The appellant filed a bill of entry based on import documents provided by the importer, which declared the gas as HCFC R-404A. However, upon inspection, it was found to be HCFC R-22. The suspension was based on contravention of CHALR, 2004 provisions. The appellant argued lack of malafide intent and knowledge of misdeclaration by the importer, thus contesting the suspension.

Issue 2: Proximity between suspension and offense committed
The appellant contended that there was no proximity between the suspension of the license and the offense committed. The bill of entry was filed in January 2012, while the suspension was ordered in December 2012. The tribunal noted the absence of a timely connection between these events, emphasizing the need for emergent powers to justify license suspension promptly. Reference was made to a previous case where a similar lack of urgency led to the suspension being deemed unsustainable.

Issue 3: Compliance with import documents and DGFT license
Upon reviewing the bill of entry and import documents, including the DGFT license, the tribunal found that the CHA's declaration aligned with the details provided. The discrepancy in the imported goods did not implicate the CHA, as they acted based on the information furnished by the importer. The tribunal emphasized that any action should be directed towards the importer for misdeclaration rather than the CHA who followed the provided documentation accurately.

Issue 4: Emergency power to suspend CHA license
The tribunal highlighted the CHALR, 2004 provision allowing the Commissioner to suspend a CHA license in emergent cases. However, in this instance, the suspension lacked the required urgency as the offense occurred in January 2012, but the suspension was imposed in December 2012. Citing a relevant court precedent, the tribunal set aside the suspension order, directing Customs to conduct an inquiry and take appropriate action against the appellant if necessary, in compliance with the law.

Overall, the tribunal allowed the appeal, emphasizing the importance of timely and justified actions in cases of CHA license suspension, while reiterating the need to hold the correct party accountable for any misdeclarations in imports.