2016 (1) TMI 471 - AT - Customs

Revocation of CHA licence - sub-letting - Action claimed to be unduly harsh and disproportionate to the role of the appellant in the alleged fraud that led to proceedings against them - Held that - two errant employees were allowed to use the umbrella of the licence issued to the appellant viz. to make up for the lack of experience of the appellant in the brokering business and the consequent primacy accorded to them in the operation of the licence. Possession of a broker s licence brings with it a commensurate responsibility to be true to the source of livelihood i.e. fidelity in matters relating to collection and payment of statutory duties. We do not find sufficient cause to interfere with the impugned order. Appeal is rejected - Decided against the appellant.

Summary

Issues:
Revocation of Customs Broker Licence under Regulation 20(7) of Customs Broker Licencing Regulations 2013.

Analysis:
The appeal was filed against the revocation of the Customs Broker Licence of M/s Gupta Fast Forwarders Ltd due to alleged involvement in a fraud scheme where duty payments were misappropriated. The appellant had employed two individuals as 'H' card holders, who were found to be involved in misappropriating duty payments. The investigations led to the suspension of the appellant's licence, followed by the revocation order under Regulation 20.

The appellant argued that they were not connected to the misappropriation, as the two employees acted independently. They claimed to have promptly removed the employees and filed criminal complaints against them. The appellant also reimbursed the misappropriated amount with interest, demonstrating their good faith. However, the impugned order found that the appellant's actions facilitated the misappropriation and violated various regulations, leading to the revocation of their licence.

The Tribunal emphasized the critical role of customs brokers in facilitating international trade and ensuring compliance with customs procedures. The appellant's failure to supervise the 'H' card holders and their irresponsible behavior was deemed unacceptable for a licensed Customs Broker. The Tribunal noted that the licencing authority had followed due procedure and invoked penal provisions after considering the investigation findings.

Various cases cited in support of leniency were distinguished from the present case, where the misappropriation of duty payments and fabrication of evidence were considered severe breaches of trust. The Tribunal found no grounds to interfere with the impugned order, emphasizing the responsibility of licensed brokers to uphold fidelity in duty-related matters.

In conclusion, the appeal was rejected, and the impugned order of revocation of the Customs Broker Licence was upheld. The Tribunal highlighted the seriousness of the breaches committed by the appellant and the need for customs brokers to maintain integrity in their operations to preserve the trust between importers/exporters and customs administration.