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2015 (10) TMI 1909 - HC - CustomsProhibition on working as Customs House Agent - Allowed unauthorized persons to handle customs clearance work; cleared consignments of pharmaceuticals and drugs, without import licence - Petitioner contended that impugned order has been passed without jurisdiction - Held That - great confidence is reposed in a CHA. Any misuse of such position by the CHA will have far reaching consequences in the transaction of business by the customs house officials. Therefore, when, by such malpractices, there is loss of revenue to the custom house, there is every justification for the Respondent in treating the action of the Petitioner Applicant as detrimental to the interest of the nation and accordingly, final order of revoking his licence has been passed. No evidence given by Petitioner to show that they fulfilled their obligations under the said provisions of Act, Rules and Regulations - Petitioner not only failed to advise their client to comply with provisions of Act, but also failed to bring the matter to notice of Assistant Commissioner of Customs/Deputy Commissioner of Customs and never tried to verify the antecedents of importer and relied upon third parties; thus failed to act in a bona fide manner Impugned order is sustainable Decided in favour of Revenue.
Issues Involved:
1. Jurisdiction of the Respondent to continue the prohibition order. 2. Alleged violations by the Petitioner under the Customs House Agents Licensing Regulations (CHALR), 2004 and Customs Brokers Licensing Regulations (CBLR), 2013. 3. Adequacy of the penalty imposed by the Commissioner of Customs, Cochin. 4. Procedural fairness and opportunity to the Petitioner to present their case. Issue-wise Detailed Analysis: 1. Jurisdiction of the Respondent to Continue the Prohibition Order: The Petitioner contended that the Respondent lacked jurisdiction to continue the prohibition order since the licensing authority had only imposed a penalty of Rs. 10,000 and had permitted the Petitioner to operate the license. The court, however, found that Clause 5.2 of Circular No. 09/2010 allows the Commissioner of Customs at a customs station to take action under Regulation 21 of CHALR, 2004 for prohibiting the working of a defaulting CHA. Therefore, the Respondent's order continuing the prohibition was within the ambit of the law. 2. Alleged Violations by the Petitioner under CHALR, 2004 and CBLR, 2013: The Respondent's investigation revealed that the Petitioner allowed unauthorized persons to handle customs clearance work, leading to the clearance of consignments without proper import licenses and ADC's clearance. The court noted several contraventions: - Regulation 12 of CHALR, 2004 (Regulation 10 of CBLR, 2013): The Petitioner allowed unauthorized persons to misuse their license, effectively transferring it to third parties. - Regulation 13(b) of CHALR, 2004 (Regulation 11(b) of CBLR, 2013): The Petitioner failed to transact business personally or through an authorized employee. - Regulation 13(d) of CHALR, 2004 (Regulation 11(d) of CBLR, 2013): The Petitioner did not advise their client to comply with the provisions of the Customs Act and failed to bring non-compliance to the notice of the authorities. - Regulation 13(o) of CHALR, 2004 (Regulation 11(n) of CBLR, 2013): The Petitioner did not verify the antecedents of the importer, relying instead on unauthorized intermediaries. 3. Adequacy of the Penalty Imposed by the Commissioner of Customs, Cochin: The Petitioner argued that since the licensing authority only imposed a penalty of Rs. 10,000, the prohibition order should be withdrawn. However, the court found that the payment of the penalty indicated acceptance of the Respondent's order. The court also emphasized that the Respondent's prohibition order was justified to prevent further misuse of the license and to protect revenue interests. 4. Procedural Fairness and Opportunity to the Petitioner: The court observed that the Petitioner was given ample opportunity to present their case, including furnishing representations, written submissions, and being heard. Despite these opportunities, the Petitioner failed to produce evidence demonstrating compliance with the relevant regulations. The court concluded that the Petitioner did not act in a bona fide manner and failed to fulfill their obligations under the said provisions. Conclusion: The court highlighted the significant responsibility held by a Customs House Agent (CHA) and the potential consequences of misuse of this position. Given the Petitioner's contraventions and the lack of evidence of bona fide actions, the court found the continuation of the prohibition order justified and dismissed the Writ Petition, affirming the Respondent's decision. The connected Miscellaneous Petition was also closed, with no costs awarded.
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