2014 (12) TMI 771 - AT - Customs

Revocation of CHA License - Forfeiture of security - Section 108 of the Customs Act, 1962 - Violation of Regulation 13 of CHLAR - Attempt to smuggle red sanders - Held that - From the records of the case and also the inquiry officer s report, it is seen that the authority letter issued by M/s. Leed Impex in favour of the appellant is a fabricated one. The proprietor of M/s. Leed Impex Shri Bhujwala Arif Yakub has confirmed to the Investigating authority that his firm has never issued any such letter in favour of M/s. Dhakane & Co. Therefore, the charge against the CHA of acting without an authorisation from the exporter is clearly established. In order to cover up the transaction, a fabricated letter has been produced by the CHA which has been found to be bogus as confirmed by the proprietor of M/s. Leed Impex. Thus the charge of contravention of Regulation 13(a) is established beyond any doubt. As regards the contravention of Regulation 13 (b) i.e. the CHA transacted the business through a person who was not its employee and who was not authorised to represent the CHA. This is clearly established from the statement of Shri Deepak Sejpal who in his statement recorded under Section 108 of the Customs Act has admitted that he was not authorised to attend the Customs clearing/documentation work and he used the CHA licence of M/s. Dhakane & Co. and it was done with the knowledge of Director Shri Ashok Pandurang Dhakane of the CHA firm. This is also corroborated by the statement of Shri Bala Baburao Jadhav and Shri Vinod Shinde, employees of the appellant CHA firm and therefore, the charge of contravention of Regulation 13 (b) of having transacted the business through unauthorized persons also stands proved. As regards the third charge of contravention of Regulation 13 (d), it is clear that the CHA never dealt with the exporter or the persons authorised by the exporter but dealt with another person, viz., Shri Deepak Dariyalal Sejpal. Therefore, the question of advising the client to comply with the provisions of the Act would not arise at all. In the light of these evidences available on record it is clear that the relevant provisions of the CHALR 2004 have been violated by the appellant. It is in view of these violations and trying to cover up the violations by the CHA, the licence issued to M/s. Dhakane & Co. has been revoked by the Commissioner. - Following decision of H. B. Cargo Services 2011 (3) TMI 816 - ANDHRA PRADESH HIGH COURT - Decided against appellant.

Summary

Issues Involved: Appeal against revocation of CHA license and forfeiture of security deposit due to violations of CHALR 2004 regulations.

Detailed Analysis:

Issue 1: Violation of Regulation 13(a) - Acting without authorization from the exporter.

- The charge of not obtaining authorization from the exporter was established as a fabricated letter was produced by the CHA, confirmed to be bogus by the exporter's proprietor.
- The fabricated authorization letter led to the clear contravention of Regulation 13(a) as the CHA acted without proper authorization.

Issue 2: Violation of Regulation 13(b) - Transacting business through an unauthorized person.

- The CHA transacted business through an unauthorized person, Shri Deepak Sejpal, who was not an employee of the CHA firm and lacked authorization.
- Statements from involved employees and Sejpal confirmed the unauthorized nature of the transactions, leading to a clear violation of Regulation 13(b).

Issue 3: Violation of Regulation 13(d) - Failure to advise client on compliance.

- The CHA did not deal directly with the exporter or authorized representatives but engaged an unauthorized person, Sejpal, for customs clearance.
- As a result, the CHA failed to advise the client on compliance with Customs Act provisions, violating Regulation 13(d).

Judgment:
- The Tribunal dismissed the appeal, upholding the revocation of the CHA license based on the established violations of CHALR 2004 regulations.
- Citing relevant legal precedents, the Tribunal emphasized the importance of maintaining discipline in Customs areas and the authority of the Commissioner in imposing disciplinary measures on CHAs.
- The decision highlighted the need for adherence to principles of natural justice and justified findings based on evidence, supporting the revocation as a necessary disciplinary action.

This comprehensive analysis outlines the violations, evidences, legal basis, and the Tribunal's decision in the appeal against the revocation of the CHA license and forfeiture of the security deposit.