2015 (7) TMI 882 - AT - Customs

Revocation of CHA License - Contravention of Regulations 13(a), 13(d) and 13(e) of CHALR, 2004 - Held tat - CHA have not met the client at all and they have received the documents through a freight forwarder. Therefore, the question of advising the client would not arise at all. As regards the third charge of not exercising due diligence in ascertaining the correct of the any information, to undertake this task, the CHA should know his client. If he does not know who the client is, he cannot exercise any diligence in ascertaining the correctness of the information furnished. Therefore, the charge of contravention of regulation 13(e) also stand clearly established. It is also relevant to note that in the customs proceedings in respect of the impugned transaction, both Sri. Prakash Charatkar, Manger of the appellant CHA firm as also Shri. Baburao K Chinta, Proprietor of Max Shipping Services, the freight forwarder have been found guilty and penalised under the provisions of section 114 of the Customs Act vide order dated 29-6-2007. We are informed that this order has not been appealed against and has become final. Thus the order of the adjudicating authority in the customs proceedings also support the department s case in the CHALR proceedings. Therefore, we do not find any fault in the conclusion drawn by the Licensing authority that the appellant CHA had contravened the provisions of Regulation 13(a), (d) and (e) of CHALR, 2004. Whether the punishment of revocation of licence is proportionate to the gravity of the offence committed - Held that - goods sought to be exporter were banned items. The exporter was found to be fictitious and not existing in the address given. Thus the facts are different and distinguishable. As regards the reliance on Ashiana Cargo Services decided by the hon ble High Court of Delhi, in the said case there was a concurrent finding by the Licensing authority and the Tribunal that the CHA did not have knowledge that illegal exports and smuggling of narcotics was effected using G cards given to the employees of another firm. In that context, it was held that revocation is not justified. In the facts of the case before us, it is the appellant s Manager who was found abetting the illegal exports of a banned item. Further the exporter was also found to be fictitious. - Decision in the case of Commissioner of Customs vs. Worldwide Cargo Movers 2006 (11) TMI 281 - BOMBAY HIGH COURT - No reason to interfere with the findings and decision of the Licensing authority in the impugned order - Decided against the appellant.

Summary

Issues Involved:
1. Revocation of CHA license for contravention of Regulations 13(a), 13(d), and 13(e) of CHALR, 2004.
2. Propriety of inquiry proceedings.
3. Proportionality of the punishment of revocation.

Issue-wise Detailed Analysis:

1. Revocation of CHA License for Contravention of Regulations 13(a), 13(d), and 13(e) of CHALR, 2004:
The appeal arises from an order revoking the CHA license of M/s Ajay Clearing Enterprise for contraventions of Regulations 13(a), 13(d), and 13(e) of CHALR, 2004. The case involved the abuse of a CHA license in an export transaction where goods declared as "furniture wood" were found to be "red sanders wood," a banned item. The CHA had not met the exporter and received documents from a freight forwarder. The exporter was fictitious, leading to charges against the CHA for not obtaining proper authorization (Reg. 13(a)), not advising the client to comply with Customs provisions (Reg. 13(d)), and not exercising due diligence (Reg. 13(e)). The inquiry officer found these charges proved, and the Commissioner of Customs revoked the CHA license. The appellant contended that only the violation of Regulation 13(a) was established and that the revocation was disproportionate.

2. Propriety of Inquiry Proceedings:
The appellant argued that the inquiry proceedings were not conducted properly and that they were not given adequate opportunity to make submissions. However, the Tribunal found no merit in this contention. The inquiry officer's report detailed the proceedings, witnesses examined, and conclusions drawn, and a copy was provided to the appellant for comments. The Licensing authority considered the appellant's contentions before passing the impugned order. Thus, the Tribunal concluded that the inquiry proceedings were conducted properly.

3. Proportionality of the Punishment of Revocation:
The appellant argued that the punishment of revocation was disproportionate, citing various decisions where lesser penalties were imposed for similar contraventions. However, the Tribunal distinguished these cases based on the facts. In the present case, the goods were banned items, and the exporter was fictitious. The Tribunal noted that the appellant's Manager admitted to obtaining authorization from a freight forwarder and not the exporter, and both the CHA and the freight forwarder failed to produce the exporter. The Tribunal emphasized that the contraventions of Regulations 13(a), 13(d), and 13(e) were clearly established and that the gravity of the offense justified the revocation of the license. The Tribunal also referred to decisions where revocation was upheld for serious violations, concluding that the decision of the Licensing authority was justified and proportionate.

Conclusion:
The Tribunal dismissed the appeal, upholding the revocation of the CHA license as proportionate to the gravity of the offense and finding no fault in the inquiry proceedings or the conclusions drawn by the Licensing authority. The operative part of the order was pronounced in court on 22.10.2014.