2013 (11) TMI 447 - HC - Customs

Revocation of CHA Licence - charges under Article 13(a) of the CHALR 2004 - Whether the CESTAT is right in law in holding that the charges under Regulation 13(a) of the CHALR, 2004 stand not proved, even after noting that during the course of investigation it was found that the authorization was fraudulently obtained - Held that - Tribunal completely ignored the fact that the Revenue realised the fraudulent authorisation only during the investigation, but the fact that the authorisation was genuine would have been in the knowledge of the respondent or in any case if the respondent had made the necessary enquiry of verifying the original certificate of IEC Number issued by the DGFT depicting the photograph of the proprietor then in such a case the fact that the person seeking to import the goods was not a genuine importer would have come to the knowledge of the CHA at the time of the import. This obligation was cast upon the importer in terms of Regulation 13(a) of the CHALR, 2004. Interim order - revenue directed that the CHA license is made available to the respondent till such time as the Commissioner of Customs decides the issue. Thus there is a contributory default on the part of the both. While in this case the Enquiry Officer as well as the Commissioner of Customs had come to a specific finding that the respondent had not done necessary verification which he was obliged to do while acting as CHA which led to a forged authorisation being used for the import of the goods. Thus allowing an importer to import goods - Therefore, order of the Tribunal as well as the Commissioner of Customs needs to be set aside and the matter be remanded to the Commissioner of Customs for a fresh determination. This is so particularly in view of the fact that the verification of the IEC Code and explanation of the Banker may be necessary to establish that the respondent CHA acted for an unauthorised person - Decided in favour of Revenue.

Summary

Issues:
1. Interpretation of Regulation 13(a) of the CHALR, 2004 regarding fraudulent authorization.
2. Lack of notice to Respondents by the Commissioner leading to charges not being proved.
3. Disagreement with the Inquiry Report without notifying the Respondents.
4. Compliance with principles of natural justice in the case of Delta Logistics.
5. Violation of natural justice principles in confirming charges without notifying the Respondents.

Analysis:
1. The case involved the Revenue appealing against the Tribunal's decision under Section 130 of the Customs Act, 1962. The primary issue was whether the charges under Regulation 13(a) of the CHALR, 2004 were proved, focusing on the respondent's importation of goods based on a fraudulent authorization. The Enquiry Officer found the respondent violated Regulation 13(a), leading to the revocation of the CHA license. The Tribunal, however, allowed the appeal, citing lack of knowledge about the fraudulent authorization during the goods' clearance and referencing a similar case for support.

2. The second issue revolved around the lack of notice to the Respondents by the Commissioner regarding the disagreement with the Inquiry Report on dropped charges. The Court highlighted the necessity of providing reasons for not accepting the Enquiry Officer's conclusions, as seen in the case of M/s. Delta Logistics v. Union of India. The absence of such notice was deemed violative of natural justice principles, leading to the setting aside of the Commissioner's order.

3. Additionally, the case addressed the disagreement with the Inquiry Report without notifying the Respondents, as per the decision in the Delta Logistics case. The Court emphasized the importance of giving notice to the Respondents regarding the grounds for not accepting the Enquiry Officer's findings, ensuring a fair process and adherence to natural justice principles.

4. The judgment also focused on compliance with natural justice principles, particularly in cases like Delta Logistics, where charges were confirmed without notifying the Respondents. The Court's decision to set aside the orders and remand the matter to the Commissioner of Customs underscored the significance of following due process and giving the Respondents an opportunity to respond to the allegations against them.

5. In conclusion, the Court directed the Commissioner of Customs to reevaluate the issues raised in the appeal, ensuring compliance with natural justice principles and providing the Respondents with a fair opportunity to present their case. The judgment highlighted the importance of procedural fairness and adherence to legal principles in adjudicating matters related to customs regulations.