2016 (12) TMI 760 - AT - Customs

Revocation of CHA licence - the goods were found to have been misdeclared in quantity and description; the goods were held to have been undervalued by five times and the importer-on-record was found to be a college student through whom an Import-Export Code had been obtained following which he issued a power-of-attorney to the alleged operator of the import business - SCN based on whims and surmises - section 108 of Customs Act, 1962 - Held that - The suspension was ordered seven months after the search of premises. The charge-sheet was issued almost three months thereafter. It is also alleged that the inquiry was closed by issue of order-sheet on 11th February 2014 but the inquiry officer chose to re-open inquiry for cross-examination of the partner of the licence-holder about six months later. The revocation was ordered almost thirty months after the search of the premises of the licencee. The appellant did participate in the proceedings. There is no justification for this delay that is so much at variance with the prescriptions in the Regulations. This compounds the casual manner in which the inquiry was conducted by placing reliance on statements that were recorded for purposes other than proceedings under the Regulations. The harsh penal consequence visited upon the appellant has compounded the disregard for deadlines prescribed in the Regulations - appeal allowed - decided in favor of appellant.

Summary

Issues:
Misdeclaration in bill of entry, Penalty under Customs Act, 1962, Revocation of customs broker license, Reliance on evidence, Delay in proceedings

Analysis:
1. The case involved M/s Mehul & Co, a customs broker, facing charges of misdeclaration in a bill of entry leading to undervaluation of goods. The appellant and employee were served notice for penalty under Customs Act, 1962, and the license was suspended. An inquiry was conducted under Customs Broker Licensing Regulations, 2013, resulting in the revocation of the license by the Commissioner of Customs for various violations.

2. The charges against the appellant included allowing license misuse, failure to advise clients on compliance, and lack of due diligence. The inquiry report was contested for delay and reliance on statements under section 108 of the Customs Act, 1962, without corroboration. The Commissioner upheld the charges, leading to license revocation and forfeiture of the security deposit, prompting the appeal.

3. The judgment highlighted the statutory relationship between customs brokers and licensing authorities, emphasizing the importance of procedural sanctity and adherence to natural justice principles akin to disciplinary proceedings. The appellant contended that the proceedings lacked substantive reliance on credible evidence, with excessive reliance on statements under section 108 of the Customs Act, 1962, which might not suffice for license revocation under the Customs Broker Licensing Regulations, 2013.

4. The appellant raised concerns regarding the delay in various stages of the proceedings, citing precedents where non-adherence to timelines rendered revocation orders invalid. The Tribunal noted the significant delays in the case, from suspension to revocation, highlighting the casual inquiry conduct and reliance on statements not specifically intended for proceedings under the Regulations.

5. Ultimately, the Tribunal allowed the appeal, setting aside the revocation order due to unjustified delays and insufficient credible evidence. The judgment underscored the necessity for conformity to processes and the need for credible evidence to support allegations leading to severe consequences like license revocation, emphasizing the importance of procedural fairness in such cases.

This detailed analysis of the judgment showcases the issues involved, the legal arguments presented, and the Tribunal's decision based on procedural fairness, evidence reliability, and adherence to statutory regulations governing customs broker licensing.