2016 (4) TMI 230 - HC - Customs

Imposition of penalty - Revocation of CHA Licence - relying upon the alleged report of the enquiry submitted after the lapse of more than four years of the initiation of the enquiry - Banned goods exported as misdeclared - Contravention of Regulation 13(a) of CHALR, 2004 - Non-obtainance of proper authorization from the exporter - Held that - there is no advertence in the Tribunal s argument that a period from June to November, 2008 for conduct of the enquiry and submission of the report in June, 2013, has not been explained. There is absolutely no discussion in the Tribunal s order as to why this delay occurred and whether that could be said to be fatal to the proceedings. The Tribunal also does not consider the fact that during this period the licence of the appellant was renewed when it expired by efflux of time. Thus, the Tribunal should have noted that if the penalty is imposed on 28th March, 2013, from 29th November, 2008 to 28th March, 2013, the petitioner was merrily carrying on the business as a Customs House Agent and was also obtaining renewal of the licence which expired by efflux of time. Thus when the licence was suspended on 29th February, 2008, it was still in force. If the enquiry was continuing and the period of the licence expired allegedly by efflux of time during such enquiry, then, there is no explanation forthcoming as to why the licence came to be renewed. Once the facts are so glaring, the lapse on the part of the appellant was serious and it actively associated itself with smuggling of the red sanders, then, all the more the Tribunal should have considered this aspect a little more carefully. By perusal of enquiry report it is found that besides reproduction of the charge and version of the Presenting Officer and some statements of witnesses, the Enquiry Officer has not come to any independent conclusion as to how the charge stands proved. Therefore, the charge of appellant is accepted at best that he could be held to be guilty of this charge and for the same the penalty that he has suffered of loss of licence as a Customs House Agent from 28th March, 2013, till today should be sufficient. Further, the forfeiture of security deposit in addition can also be ordered. - Decided partly in favour of appellant

Summary

Issues:
1. Revocation of CHA Licence based on delayed enquiry report
2. Validity of enquiry report delay
3. Binding nature of previous tribunal findings

Issue 1: Revocation of CHA Licence based on delayed enquiry report
The High Court considered whether the Appellate Tribunal was justified in upholding the revocation of the Appellant's CHA Licence based on an enquiry report submitted after a significant delay of more than four years from the initiation of the enquiry. The Court noted that the licence was initially suspended but restored following a Tribunal order. However, the enquiry report was submitted years later, leading to the revocation of the licence by the Commissioner of Customs. The Court criticized the delay in submitting the report and the lack of explanation for the lapse. The Court found that the revocation was disproportionate to the alleged lapses and that the appellant had suffered significant business losses. The Court concluded that the penalty imposed was excessive and ordered a substitution of the penalty with a loss of licence for a specified period and forfeiture of the security deposit.

Issue 2: Validity of enquiry report delay
The Court analyzed the delay in submitting the enquiry report and its impact on the revocation of the CHA Licence. It observed that the Tribunal did not adequately address the delay in the enquiry proceedings or the renewal of the licence during that period. The Court highlighted that the appellant's involvement in the smuggling of red sanders was not conclusively proven, emphasizing the lack of due diligence rather than active participation in smuggling. The Court found that the revocation of the licence was not justified based on the established charges and the conduct of the appellant. It noted discrepancies in the Tribunal's handling of the case and the lack of thorough examination in the enquiry report and Commissioner's order.

Issue 3: Binding nature of previous tribunal findings
The Court examined whether the previous findings of the Tribunal were binding in the present proceedings. It noted that the Tribunal's earlier order had revoked the suspension of the licence based on specific charges, and subsequent proceedings should have adhered to those findings. The Court criticized the Tribunal for disregarding its own previous order and failing to address the delay in the enquiry process adequately. It concluded that sending the matter back to the Commissioner or Tribunal would serve no purpose, as the appellant's guilt was limited to specific charges, and the penalty imposed was excessive. The Court partially allowed the appeal, substituting the revocation of the licence with a lesser penalty and forfeiture of the security deposit.

Overall, the High Court's judgment focused on the procedural irregularities, disproportionate penalties, and lack of conclusive evidence in the revocation of the CHA Licence, ultimately leading to a partial allowance of the appeal and modification of the penalty imposed.