2013 (12) TMI 119 - AT - Customs

Sub letting of license - Payment charged for sub letting of license - Violation of Regulation of 12 of CHALR 2004 - Held that - if the Customs clearance has been done through intermediary and business was got through intermediary the same is not barred by the provisions of CHALR 2004 and it cannot be stated that the appellant has sub-let or transferred his licence - mere fact of bills raised on the intermediary cannot be held against the CHA firm to prove that the CHA licence was sub-let or transferred. Violation of Regulation 13(a) - Revocation of license - Held that - Obtaining an authorisation from the importer does not mean that the same should be obtained directly; so long as the concerned import documents were signed by the importer it amounts to authorisation by the importer and therefore it cannot be said that there has been a violation of Regulation 13(a). As regards the last charge i.e. the appellant did not transact the business through his employee but through Shri Sunil Chitnis thereby violating the provisions of Regulation 13(b) - Both Shri Sunil Chitnis and Shri Ashish Patekar authorised signatory of the appellant CHA has admitted that it was Shri Sunil Chitnis who undertook the clearance work on behalf of the CHA. Mere signing of the documents does not prove that the clearances were undertaken by the appellant CHA - Regulation 13(b) has been violated by employing Shri Sunil Chitnis for doing the clearance work of M/s. Advanced Micronics Devices Ltd. Revocation is an extreme step and a harsh punishment which is not warranted for violation of Regulation 13(b). Accordingly we are of the view that forfeiture of security tendered by the appellant CHA is sufficient punishment and revocation is not warranted - Decided partly in favour of Appellant.

Summary

Issues: Violation of CHALR 2004 regulations by a Customs House Agent (CHA) leading to the revocation of their license.

Analysis:
1. Violation of Regulation 12 - Sub-letting of License:
The appellant CHA argued that there was no evidence of selling or transferring the license to the intermediary, Shri Sunil Chitnis. They contended that accepting business through an intermediary is permissible under CHALR 2004. The Tribunal referred to precedents where Customs clearance through intermediaries did not constitute sub-letting. Thus, the charge of violating Regulation 12 was not upheld.

2. Violation of Regulation 13(a) - Authorization from Importer:
The appellant claimed to have obtained authorization from the importer for the transaction. The adjudicating authority doubted the validity of this authorization. However, the Tribunal clarified that direct authorization from the importer is not necessary as long as the import documents are signed by the importer. Consequently, the charge of violating Regulation 13(a) was not established.

3. Violation of Regulation 13(b) - Transaction through Non-Employee:
The appellant was accused of transacting business through Shri Sunil Chitnis instead of their own employees, breaching Regulation 13(b). Both parties admitted that Shri Sunil Chitnis handled clearance work. The Tribunal acknowledged this violation but deemed revocation of the license as an extreme and unwarranted punishment. Instead, they ordered the forfeiture of the security amount tendered by the CHA, directing the restoration of the license.

In conclusion, the Tribunal set aside the order of revocation and instructed the Commissioner of Customs to reinstate the CHA license upon forfeiture of the security amount. The judgment emphasized that the punishment should align with the gravity of the offense and that revocation was deemed excessive for the violation of Regulation 13(b).