2015 (11) TMI 1503 - AT - Customs

Revocation of CHA license - Forfeiture of security deposit - Seizure of goods - Goods not declared - violation of Regulation 12 and Regulations 13 (a), 13(b), 13(d) & 13(e) and 13(o) - import of offending goods - Forging of signature - Held that - Appellant had allowed Shri Manish Sangani to use the appellant s License because his own License of National Shipping Agency had been suspended. Strangely, although the license of National Shipping Agency was suspended, the employees holding G-Cards of National Shipping Agency continued to operate in the Customs area and did Customs clearance work in respect of documents filed in the name of the appellant CHA. How this was permitted by Customs needs to be answered. - transfer of License did not take place physically. But Regulation 12 states no License shall be sold or otherwise transferred. As the law itself prohibits transfer of a License, the act of a person allowing another person to use his License, would amount to transfer of a License. - Therefore, it is clear that Regulation 12 has been violated in this case. As regards Regulation 13(a), it is clear from the provisions that the CHA has to take an authorization from the importer. An authorization given to a person (other than License holder) who actually used the CHA License does not become a true authorization in the sense and spirit of Regulation 13(a). An authorization addressed to the appellant was produced during the inquiry but this was much later and no authorization was produced at the time of seizure of the goods. We have seen the authorization. It does not even show any contact number or telephone number of M.S. International. Further there is a huge gap between the words yours truly and the signature on the authorization. The appellant has also failed to fulfill the condition of Regulation 13 (e) because he had allowed Shri Manish Sanghani to use his License and did not exercise due diligence to impart correct knowledge to the importer. As regards Regulation 13 (o) which requires the CHA to verify the antecedents of the importer, the appellant have tried to evade the charge by producing copies of PAN, IEC of the importer and a copy of the signature verification of the importer by the Bank. - signature verification bears no date. The account number in the stamp of the Bank appears to be overwritten. No prudent banker would put his signatures without affixing the date of the signature and without understanding the significance of the purpose for which it will be used. The signature verification paper is not on a letterhead. Thus the attempt of the appellant to create evidence is rather weak. We, therefore reject the defence put up in respect of violation of Regulation 13 (o). Regarding regulation 19(5), it is noted that the Director of the appellant Shri Manish Amlani had in his examination in the inquiry on 18.1.2013 and on 22.1.2013 admitted that he had allowed Shri Manish Sanghani to do the business related to Customs clearance work. Shri Manish Sanghani had filed the Bill of Entry online on behalf the appellant. Therefore the violation of Regulation 19(5) is proved. Charges against the appellants stand established. However, we also hold the view that the appellant cannot be disabled permanently for the violation as that would deprive him and his employees of their source of livelihood. The License has remained in operative since 29.5.2012. We find that the three years period uptill now during which he has not been able to use the License is sufficient punishment. - we cancel the order of revocation. The license would become operative immediately. However, the forfeiture of security deposit is upheld. - Decided partly in favour of Appellant.

Summary

Issues:
Appeal against revocation of CHA License and forfeiture of security deposit.

Analysis:
The case involved an appeal against the revocation of the CHA License of M/s. SKD Shipping & Forwarding Pvt. Ltd. and the forfeiture of the entire security deposit by the Commissioner of Customs (G) Mumbai. The appeal was based on the grounds of violation of various regulations under the CHALR 2004. The appellant was accused of allowing unauthorized use of the CHA License by Shri Manish Sanghani, whose own license had been suspended earlier. The appellant's Director admitted to this unauthorized use during the inquiry. The Commissioner upheld the contravention of multiple regulations and revoked the license, leading to the appeal.

The appellant's counsel argued against the charges, citing legal precedents and challenging the reliance on certain statements recorded under the Customs Act. The defense contended that the appellant had a bona fide belief in the genuineness of the importer and should not be penalized for the importer's actions. The defense also disputed the violation of Regulation 13(a) and other regulations, questioning the evidence and procedures followed during the inquiry.

The Appellate Tribunal considered both sides' submissions and analyzed the violations. It found that the appellant had allowed unauthorized use of the license, violating Regulation 12 which prohibits the transfer of licenses. The tribunal also concluded that the appellant failed to comply with various regulations such as obtaining proper authorization from the importer, ensuring due diligence, and verifying the importer's antecedents as required by the regulations. The tribunal rejected the appellant's defenses and upheld the violations of the regulations.

In the final decision, the tribunal canceled the revocation of the license but upheld the forfeiture of the security deposit. The tribunal acknowledged the three-year period during which the license remained inoperative as sufficient punishment for the violations. The decision aimed to balance the enforcement of regulations with the appellant's livelihood, allowing the license to become operative immediately while upholding the forfeiture of the security deposit. The judgment highlighted the importance of compliance with CHALR regulations and the consequences of unauthorized use of licenses in the customs clearance process.