2016 (7) TMI 859 - AT - Customs

Suspension of licence of CHA - Whetehr the CHA was negligent or not - Coming to a conclusion that the prima facie CHA has derelicted their duties, the licence was suspended and a charge sheet was issued and inquiry was conducted for failure to discharge obligation of CHA under Regulation no. 13(a), 13(d), 13(e), 13(n) and 13(o) of CHALR 2004. - Held that - We note that during examinations and cross examination Shri Zeeshan Anwar, it was clearly recorded that he had presented the proprietor of Apex Enterprises and Riya Enterprises and another before the CHA in the office of CHA, while giving papers for clearance of consignment, it is also recorded that CHA advised him to give all proper papers and enquired about genuineness of the consignment and the payment. During cross examination by the presenting officer, Shri Zeeshan Anwar has admitted he was responsible for all the faults in importation of consignments. This would indicate that main appellant herein was not at fault. It is also to be noted that the authorisation etc. were produced before the authorities at the time of clearance of goods and was accepted and goods were cleared, would mean that main appellant could not have contravened the provisions of Regulations 13(a) of CHALR 2004. It can be noticed the Regulation mandates the CHA to verify antecedent, correction of IEC identity of client and functioning of his client at the declared address. It is on record that appellant CHA has verified the same by filling up of the KYC form, verifying the details of IEC from the DGFT website, MSEDCL electricity bill is in the name of IEC holder, ration card, pan card, licence issued under shop and establishment Act, 1948 and above all authentication of bank account by the bank. We find that CHA has verified these documents in respect of all the three IEC holders. In our considered view nothing more can be expected out of a CHA to verify the antecedents of a client coming to him with a business proposal for clearance of imported consignment. In our view the Adjudicating Authority has misconceived the purpose of this Regulation. That there is no violation of CHALR is established against the appellant, nor there is any finding that appellant had advised importers to undervalue the goods. - licence to be restored - Decided in favor of CHA.

Summary

Issues Involved:
1. Violation of Regulation 13(a) of CHALR 2004
2. Violation of Regulation 13(d) of CHALR 2004
3. Violation of Regulation 13(e) of CHALR 2004
4. Violation of Regulation 13(n) of CHALR 2004
5. Violation of Regulation 13(o) of CHALR 2004

Issue-wise Detailed Analysis:

1. Violation of Regulation 13(a) of CHALR 2004:
The Adjudicating Authority found that the CHA accepted authorization letters that were not signed by the actual IEC holders, indicating a potential fabrication. The CHA was dealing with Zeeshan Anwar, who was not the IEC holder but a power of attorney holder. The Tribunal noted that the power of attorney was not disputed and that the CHA had verified the authorizations and documents at the time of clearance. The Tribunal concluded that there was no contravention of Regulation 13(a) as the CHA had acted based on the documents provided and had no reason to doubt their authenticity.

2. Violation of Regulation 13(d) of CHALR 2004:
The Adjudicating Authority claimed that the CHA failed to advise the IEC holders to comply with the law and did not inform Customs of any non-compliance. The Tribunal found that there was no specific allegation of non-compliance with the Customs Act, 1962, and that the CHA had taken steps to verify the genuineness of the consignments. The Tribunal determined that the findings of the Adjudicating Authority were based on assumptions and not supported by evidence, thus dismissing the charge under Regulation 13(d).

3. Violation of Regulation 13(e) of CHALR 2004:
The Adjudicating Authority held that the CHA did not exercise due diligence as the import documents had discrepancies, such as mismatched signatures. The Tribunal noted that the CHA had verified the IEC numbers and other documents, and the inquiry officer had found no evidence of under-invoicing awareness by the CHA. The Tribunal concluded that the Adjudicating Authority's findings were based on assumptions and lacked evidence, leading to the dismissal of the charge under Regulation 13(e).

4. Violation of Regulation 13(n) of CHALR 2004:
The Adjudicating Authority accused the CHA of not discharging duties with utmost speed and efficiency. The Tribunal clarified that this regulation pertains to assisting customs authorities in the clearance process and cannot be used against the CHA for not appearing for statement recordings. The Tribunal found that the Adjudicating Authority had misdirected its findings and dismissed the charge under Regulation 13(n).

5. Violation of Regulation 13(o) of CHALR 2004:
The Adjudicating Authority argued that the CHA failed to verify the antecedents and authenticity of the IEC holders. The Tribunal observed that the CHA had verified the IEC details through various documents, including the DGFT website, electricity bills, ration cards, PAN cards, and bank account authentication. The Tribunal concluded that the CHA had fulfilled his verification duties and that the Adjudicating Authority had misconceived the purpose of this regulation, leading to the dismissal of the charge under Regulation 13(o).

Conclusion:
The Tribunal found no violations of the CHALR regulations by the appellant CHA. It directed the Commissioner of Customs (Gen), Mumbai, to restore the CHA license and the forfeited security deposit within four weeks. The Tribunal's decision emphasized the lack of evidence and reliance on assumptions by the Adjudicating Authority, resulting in the setting aside of the impugned orders.