2014 (1) TMI 688 - AT - Customs

Revocation of CHA License - Forfeiture of Security Deposit under Regulation 22(7) of CHALR, 2004 - Forgery of documents - Export of goods without license - Quantum of punishment - Held that - Partner of the appellant firm who forged the signatures of Shri Damle has clearly admitted in his statements dated 4-4-2008, 7-4-2008 and 19-9-2008 that he had forged the initials of Shri Damle in the export documents submitted to the customs authorities. Further the letter dated 15-3-2008 from the Asst. Drugs Controller s Office clearly says that the signature/initial of Shri Damle appearing on the export documents appeared to bear forged signature and they had given no clearance/NOC to the exporter with respect to the export of the impugned goods, namely, Zoledronate. Thus the statement of Shri Ketan Adhia coupled with the reply of the Asst. Drugs Controller s office clearly establishes the fact that the signature of Shri Damle appearing in the export invoices is fake and hence forged. There has not been any retraction of his statements by Shri Ketan Adhia. appellant has not adduced any evidence to show that the statement of Shri Ketan Adhia, a partner of the CHA firm was not voluntary or was not truthful. If that be so, the appellant on first available opportunity would have retracted the statement. They have not done so - statement given by Shri Ketan Adhia has to be accepted as an admissible evidence and due weightage has to be given to the said statement - CHA cannot commit all kinds of violations in respect of export transactions and claim that no loss has been caused to the exchequer - exporting firm did not have a manufacturing license for undertaking the export of the said item from the Food and Drugs Administration. If that is so, the goods are prohibited goods for the purpose of export and by exporting such prohibited goods, the Foreign Trade Policy would get violated. If prohibited goods are allowed to be exported, it badly damages the reputation of the country as an exporter and such action would cause severe economic disadvantages to the nation. The proceedings under the Customs Act is for violation of the provisions of the Customs Act, while CHALR, 2004 deals with the conduct of the CHA. If there are serious lapses on the part of the CHA, he is liable for the penal consequence as provided for in the law. In the present case we find that the CHA has resorted to forgery of export documents, which cannot be regarded as minor or inconsequential - Following decision of Jasjeet Singh Marwaha v. Union of India 2009 (2) TMI 57 - DELHI HIGH COURT - Decided against appellant.

Issues Involved:
1. Validity of inquiry proceedings.
2. Examination of Shri Damle regarding forgery.
3. Admissibility and voluntariness of statements under Section 108 of the Customs Act.
4. Severity of punishment for the CHA.
5. Impact of no revenue loss on the punishment.
6. Relevance of previous customs proceedings and penalties.

Issue-wise Detailed Analysis:

1. Validity of Inquiry Proceedings:
The appellant argued that the inquiry proceedings were invalid as they were based solely on the statement of Shri Ketan Adhia, partner of the CHA firm, without recording or examining the statement of Shri Damle, the officer whose signature was allegedly forged. However, the Tribunal found this argument to be without merit. The Tribunal noted that Shri Ketan Adhia admitted to forging Shri Damle's initials in his statements dated 4-4-2008, 7-4-2008, and 19-9-2008, which were not retracted. The Tribunal emphasized the principle that "admitted facts need not be proved" and upheld the validity of the inquiry proceedings.

2. Examination of Shri Damle Regarding Forgery:
The appellant contended that the charge of forgery could not be proved without the statement of Shri Damle. The Tribunal rejected this argument, stating that the appellant had the opportunity to produce Shri Damle as a defense witness but chose to withdraw him. The Tribunal concluded that the conduct of withdrawing Shri Damle as a defense witness went against the appellant and upheld the finding of forgery based on the statements of Shri Ketan Adhia and the letter from the Asst. Drugs Controller's Office.

3. Admissibility and Voluntariness of Statements under Section 108 of the Customs Act:
The Tribunal referred to the judgment of the Hon'ble Delhi High Court in the case of Jasjeet Singh Marwaha v. Union of India, which held that a statement recorded under Section 108 of the Customs Act can be relied upon in CHALR proceedings if it is voluntary and truthful. The Tribunal found that the appellant did not provide any evidence to show that Shri Ketan Adhia's statements were not voluntary or truthful. Therefore, the Tribunal accepted the statements as admissible evidence and gave them due weight.

4. Severity of Punishment for the CHA:
The appellant argued that the revocation of the CHA license was too harsh a punishment, especially since the transaction involved export and no revenue loss. The Tribunal rejected this argument, stating that the Customs Act also regulates the import and export of goods and ensures compliance with legal requirements. The Tribunal emphasized that exporting prohibited goods without proper licenses damages the country's reputation and causes severe economic disadvantages. The Tribunal cited judgments from the Hon'ble High Courts of Andhra Pradesh, Bombay, and Gujarat to support the view that even a single act of corruption warrants the maximum penalty of revocation of the license.

5. Impact of No Revenue Loss on the Punishment:
The appellant contended that since the transaction involved export and no revenue loss, the punishment should be lenient. The Tribunal dismissed this argument, stating that accepting such an argument would imply that CHAs could commit violations in export transactions without consequences. The Tribunal highlighted the broader regulatory role of customs authorities in ensuring compliance with export laws and protecting the country's economic interests.

6. Relevance of Previous Customs Proceedings and Penalties:
The appellant referred to a previous customs proceeding where the penalty imposed on the CHA was set aside by the Tribunal. However, the Tribunal clarified that proceedings under the Customs Act and CHALR serve different purposes. While the Customs Act deals with violations of customs laws, CHALR addresses the conduct of CHAs. The Tribunal found that the CHA's act of forging export documents was a serious lapse warranting penal consequences under CHALR.

Conclusion:
The Tribunal found no merit in the appeal and dismissed it, upholding the revocation of the CHA license and forfeiture of the security deposit. The judgment emphasized the importance of maintaining integrity and compliance in customs operations and the severe consequences of forgery and corruption.

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