2016 (6) TMI 864 - AT - Customs

Revocation of CHA license - period of limitation - principle of natural justice - Failure on the part of CHA to perform its duties - the allegation is that the appellant failed to obtain authorization from his clients to deal with Customs, failed to advise his clients for proper compliance of Customs Act and failed to exercise due diligence to ascertain the correctness of information required to handle the work as a CHA - Held that - The notice which resulted in the impugned order was dated 08.06.2006 and inquiry report was dated 06.10.2006. It is clear that reliance placed by the original authority on the investigation and adjudication (under Customs Act, 1962) done in 2009-10 is legally untenable. Clearly, the adjudicating authority considered developments/purported evidences that arose three years after the proceedings were initiated and inquiry completed. This is in clear violation of principle of natural justice. The loss of more than ten years of business and livelihood for the appellant cannot be allowed to continue. Applying the doctrine of proportionality as well as the fact that the impugned order travelled beyond the notice, we hold that both the grounds as agitated by the appellant are tenable to set aside the impugned order. - Decided in favor of CHA

Summary

Issues:
Allegations against a Customs House Agent under Customs House Agents Licensing Regulations, 2004 (CHALR, 2004) for failure to comply with regulations. Delay in conclusion of proceedings and validity of the impugned order traveling beyond the allegations made in the show-cause notice.

Analysis:
The appellant, a licensed Customs House Agent, faced investigations in 2006 for possible over-valuation of export products to avail ineligible benefits. Allegations included failure to obtain authorization from clients, advise on Customs compliance, and exercise due diligence. The appellant's license was suspended in 2006, and a show-cause notice in 2006 led to license cancellation proceedings. Despite delays, the final order revoked the license and forfeited the security deposit. The appellant argued innocence, lack of evidence of involvement in mis-declaration, and cryptic notice contents. The impugned order relied on facts not in the notice, violating natural justice principles.

The main issues addressed were the delay in proceedings and the validity of the impugned order exceeding show-cause notice allegations. The delay of four years in issuing the order and subsequent six years in appeals affected the appellant's livelihood for over a decade. The order's reliance on unnotified details from later investigations violated due process. The authorities considered events from 2009-10, postdating the 2006 notice and inquiry, which was unjust. The appellant's inability to work for an extended period was deemed disproportionate to any misconduct, citing the proportionality doctrine.

The decision relied on the proportionality doctrine, emphasizing penalties proportional to violations. The High Court's precedent highlighted the need for balanced penalties and proportionate actions. The revocation of the appellant's license was deemed unjustifiable due to the prolonged impact on the appellant's business and livelihood. The judgment set aside the impugned order based on the appellant's arguments and the violation of natural justice principles.

In conclusion, the judgment focused on the delay in proceedings, violation of natural justice due to reliance on unnotified facts, and the application of the proportionality doctrine to set aside the impugned order revoking the appellant's license. The decision prioritized fairness, proportionality, and adherence to legal procedures in licensing matters involving Customs House Agents.