2014 (3) TMI 283 - AT - Customs

Revocation of CHA License - Regulation 22(7) of CHALR, 2004 - Misuse of the name and their licence for monetary gain - violation of Regulation under Sections 12, 13(a), 13(b) - Sub letting of CHA License - Held that - appellant in the capacity of a CHA is not supposed to look into the details of genuineness of the importer when IEC number is produced by the importer. Moreover, it has been held that the CHA files shipping documents on the basis of the material given to him by his clients and if in the case of such exercise of his functioning, he believes in good faith that these documents were genuine, he is not liable for penal action - appellant has obtained proper authorization and the shipping documents were filed by the appellant s employee were having the customs pass of the CHA therefore, the charges framed against the appellant are not sustainable - License revoked.

Summary

Issues:
Revocation of CHA licence under Regulation 22(7) of CHALR, 2004 based on misuse of licence and lack of proper authorization from exporters.

Analysis:
The case involved the appellant appealing against the revocation of their CHA licence under Regulation 22(7) of CHALR, 2004. The facts revealed that Shri Vishwas Gaonkar was engaged in fraudulent export activities, misdeclaring goods and overvaluing them to claim higher duty drawbacks. Shri Christopher Lopez, using the appellant's CHA licence, handled exports linked to these fraudulent activities. The appellant was accused of allowing the misuse of their licence for monetary gain, leading to charges under Regulation 13(a) of CHALR, 2004.

The appellant argued that they did not sublet their licence as all clearances were conducted by their authorized employee, Shri Sandeep Sawant, and not by Shri Lopez. They contended that Shri Lopez merely brought business to them, and they had proper authorization from exporters. The appellant cited precedents to support their position, emphasizing that the appellant's employee handled all clearances, and the appellant had fulfilled their obligations regarding authorization from exporters.

The learned A.R. maintained that the appellant had indeed allowed Shri Lopez to use their licence for a fee, justifying the revocation of the licence. However, upon considering both sides' submissions, the Tribunal found that the appellant had not sublet their licence as all shipping bills were signed by them, and clearances were conducted by their employee. Citing previous judgments, the Tribunal emphasized that a CHA is not required to verify importer details if IEC number is provided, and if documents are believed to be genuine in good faith, the CHA is not liable for penal action.

Consequently, the Tribunal set aside the impugned order, revoking the revocation of the CHA licence No. 11/654, with immediate effect. The decision was based on the appellant's fulfillment of authorization requirements and their employee handling all clearances, thus finding the charges against the appellant unsustainable.