2014 (10) TMI 673 - AT - Customs

Revocation of Custom House Broker s Licence - Held that - Conclusion reached by the Commissioner that the appellant did not fulfill all the conditions under Regulation 11(n) may not be proper. In the absence of non-existence of the importer and in the presence of authorization by the importer and when the importer is present, we cannot expect a custom house agent to go on investigating as to why a person has filed so many bills of entry and what are the goods coming and what is happening. This is the job of investigating agencies which are engaged in this work in custom house as well as in DRI. No doubt because of their role only these facts have come out. Under these circumstances, it will be difficult to sustain the stand that the offence is so grave that licence of the broker cannot be continued to undertake this activity further. So long as a CHA takes responsibility over the work of his employee and exercises adequate care and supervision, there is nothing wrong or there cannot be anything wrong if the proprietor does not attend to day to day work but exercise only supervision. In the statement there is no indication and no clarification has been asked as to what kind of supervision he exercised over his staff and how he tried to ensure that they did not do any mischief. It has to be taken note that in this case the concerned clerk had been given an H Card and therefore it cannot be said that he was totally an unauthorized person or unknown person or unqualified person for this purpose. Unfortunately department has not proved this by investigating the issue by looking on this issue from a different angle. What emerges is the fact that overall the supervision over the work of Shri. Saravanan was not very strict and generally he was given a free hand. Therefore we find that in this case it cannot be definitely said that the CHA has performed to the levels accepted by him. At the same time whether the broker licence should be suspended and revoked on these grounds is a question with which we are not able to agree with the Commissioner totally. Probably in this case the punishment is too harsh - order of revocation of licence of the customs broker is set aside and the Commissioner is directed to issue the licence afresh. It is made clear that the order imposing penalty of ₹ 50,000/- and forfeiting the security already deposited by the appellant is upheld. In the result the appellant will have to apply for a fresh licence and deposit fresh security. Thereafter the Commissioner will permit issue of licence to the appellant - Decided partly in favour of CHA.

Summary

Issues:
- Revocation of Custom House Broker's Licence
- Proportionality of punishment
- Compliance with Regulation 11(n) of CBLR 2013
- Supervision and control over employees
- Impact on livelihood of employees

Revocation of Custom House Broker's Licence:
The appellant, a Customs clearance agent primarily at Chennai, faced revocation of their licence after an investigation revealed discrepancies in verifying import details. The Commissioner alleged that the appellant failed to fulfill obligations under Regulation 11(n) of CBLR 2013, leading to substantial revenue loss. However, the appellant argued that the real importer was known, and the transactions were legitimate. The Tribunal noted that the appellant relied on an employee for verification, indicating a lack of control. Despite this, the Tribunal found the revocation excessive and modified the order, setting aside the licence revocation but upholding the penalty and security forfeiture.

Proportionality of Punishment:
The Tribunal considered the severity of the punishment imposed on the appellant, including suspension of activities for over 8 months, forfeiture of security, and a penalty of Rs. 50,000. While acknowledging the lapses in supervision and control over employees, the Tribunal deemed the revocation of the licence too harsh. They concluded that the existing penalties were sufficient, leading to the modification of the Commissioner's order.

Compliance with Regulation 11(n) of CBLR 2013:
The appellant's compliance with Regulation 11(n) was scrutinized, focusing on the verification of import details and the identification of the real importer. Despite discrepancies in the verification process, the Tribunal emphasized that the Commissioner's conclusion may not be entirely justified. They highlighted the need for stricter control by the Customs House Agent and more oversight to prevent such issues, ultimately questioning the severity of the punishment based on these grounds.

Supervision and Control Over Employees:
The Tribunal examined the level of supervision exercised by the appellant over their employees, particularly in light of the employee's involvement in the verification process. While acknowledging the employee's authorization and the appellant's reliance on them, the Tribunal noted a lack of strict supervision. They critiqued the loose control over the employee's actions, suggesting that the appellant should have exercised more oversight. Despite this, the Tribunal found the punishment excessive and recommended a modified approach.

Impact on Livelihood of Employees:
The appellant highlighted the adverse impact of the suspension on the livelihood of their employees, emphasizing that 16 individuals were left unemployed due to the Customs House Agent's suspension. This factor expedited the consideration of the appeal and stay applications. The Tribunal took this into account when assessing the proportionality of the punishment and ultimately modified the Commissioner's order to balance justice with the impact on employees' livelihoods.