2015 (7) TMI 178 - AT - Customs

Suspension of custodianship of CFS - illegal removal of seized goods due to failure on the part of custodian not ensuring safety and security of the seized goods kept under the appellant s custody - Held that - Commissioner of Customs has rightly exercised the power to suspend the custodianship of appellant. Appellant s reliance on case laws which are related to suspension of CHA licence under CHALR and the appellant s plea is that provisions of CHALR and HCCAR are pari materia not acceptable for the reasons that Container Freight Station (CFS) who is appointed by the Government for handling import and export cargo as Terminal operator cannot be equated with licence issued to Custom House Agent under CHALR. The obligation of custodian of CFS and the role played by them in handling the cargo including safety and security of the cargo are entirely governed by strict conditions as set out in HCCAR whereas the CHA only acts as an agent between customs & importer/exporter in processing of document and clearance of cargo. Therefore, the role of CFS as custodian and role of CHA are far different and cannot be termed as pari materia. Suspension was ordered only in December 2004 and the Custom Department is yet to complete their investigation. We also find that seized containers are recovered by the police the subsequent investigation and filing of charge sheet by the police is still pending. Therefore, by considering the serious nature of offence and breach of conditions of regulations and also taking into account the past adverse instances and conduct of the appellant of identical smuggling of Red Sanders and other goods detected in appellant s own premises, we hold that the bonafide and credibility of conduct of custodian-appellant raises serious doubt and the investigation by Customs and Police authorities is still pending and yet to be completed and if appellants are allowed to continue as custodian it will certainly cause jeopardy and hamper the process of investigation. Accordingly, we hold that appellant s plea for setting aside the suspension order does not merit consideration and the suspension order is liable to be upheld. - Decided against Appellant.

Summary

Issues Involved:
1. Validity of the suspension of custodianship of the appellant under Regulation 11(2) of HCCAR, 2009.
2. Responsibility and security lapses of the custodian in handling seized goods.
3. Applicability of case laws related to suspension of CHA licenses under CHALR to the custodianship under HCCAR.

Issue-Wise Detailed Analysis:

1. Validity of the suspension of custodianship of the appellant under Regulation 11(2) of HCCAR, 2009:
The appellant challenged the suspension of their custodianship by the Commissioner of Customs, Chennai, arguing that the suspension order lacked specific charges and was in violation of Regulation 11(2) of HCCAR, 2009. The Tribunal, after careful consideration, upheld the suspension, stating that the Commissioner of Customs rightly exercised the power to suspend the custodianship due to serious lapses on the part of the appellant in ensuring the safety and security of the seized cargo. The Tribunal emphasized that the repeated instances of smuggling of goods from the appellant's CFS confirmed serious lapses and could not be treated as isolated incidents.

2. Responsibility and security lapses of the custodian in handling seized goods:
The Tribunal noted that the appellant, as a custodian appointed under Section 45 of the Customs Act, was responsible for the safe and secure handling of import and export goods. The case involved the illicit removal of a container containing Red Sander logs from the appellant's CFS using forged documents. The Tribunal found that the appellant admitted to the removal of the seized container and the involvement of their employees in the fraudulent activity. The Tribunal rejected the appellant's argument that the lapse was a stray incident, citing past instances of smuggling in 2009 and 2013, which indicated a pattern of security lapses.

3. Applicability of case laws related to suspension of CHA licenses under CHALR to the custodianship under HCCAR:
The appellant relied on case laws related to the suspension of CHA licenses under CHALR, arguing that CHALR and HCCAR are pari materia. The Tribunal rejected this argument, stating that the roles and responsibilities of a Container Freight Station (CFS) custodian and a Custom House Agent (CHA) are significantly different. The Tribunal highlighted that a CFS custodian is entrusted with the safe and secure handling of cargo, which involves strict conditions under HCCAR, whereas a CHA acts as an agent between customs and importers/exporters. Therefore, the Tribunal concluded that the case laws related to CHA licenses were not applicable to the appellant's case.

Conclusion:
The Tribunal upheld the suspension of the appellant's custodianship, emphasizing the serious nature of the security lapses and the ongoing investigations by Customs and Police authorities. The Tribunal directed the Commissioner of Customs, Chennai, to complete the investigation proceedings and take appropriate action under HCCAR as expeditiously as possible, preferably within three months. The appeal was dismissed, and the suspension order was upheld.