2008 (3) TMI 237 - AT - Customs

Sub-letting of license by CHA - CHA allowed their license to be used by other person against monetary consideration Revenue plea that it amounts to contravention of the Customs Act, is not acceptable - at best the provisions of Custom House Agents License Regulations (CHALR), 1984 would be applicable, not the provisions of Custom Act hence impugned order imposing penalty under Section 117 of the Customs Act, 1962 is unsustainable and liable to be set aside

Summary

Issues:
Imposition of penalty on a Customs House Agent (CHA) for allowing their license to be used by another entity for monetary consideration without contravening any provisions of the Customs Act.

Analysis:
The case involved an appeal against the imposition of a penalty on a CHA for allegedly allowing their license to be used by another entity, M/s. Durga Shipping Agency, for monetary consideration, leading to the removal of goods without authorization from the Dock area. The appellant denied the allegations and contested the show cause notice issued under Sections 112 and 117 of the Customs Act, 1962. The adjudicating authority found the appellant liable for abetting in contravention of the Customs Act based on the use of their license by M/s. Durga Shipping Agency for commission. The appellant appealed against this decision before the Tribunal.

The appellant's counsel argued that a previous suspension and subsequent restoration of the CHA license by the Tribunal in a separate case indicated that the appellant was not involved in any contraventions. The appellant claimed ignorance regarding the theft of goods from containers and asserted that no contraventions of the Customs Act had occurred. On the other hand, the department argued that the CHA was responsible for the theft as they had issued passes in different names, allowing unauthorized access to the goods.

After considering the submissions from both sides, the Tribunal reviewed the imposition of the penalty under Section 117 of the Customs Act. The Tribunal observed that the penalty was based on the CHA allowing their license to be used for monetary consideration, which did not contravene any specific provisions of the Customs Act. The Tribunal concluded that the penalty under Section 117 was unsustainable in this case. Therefore, the Tribunal set aside the penalty and allowed the appeal with any consequential relief.

In conclusion, the Tribunal found that the imposition of the penalty on the CHA for allowing their license to be used for monetary consideration was not justified under Section 117 of the Customs Act as it did not amount to a contravention of any specific provision. The Tribunal set aside the penalty and provided relief to the appellant accordingly.