2016 (12) TMI 831 - HC - Customs

Restoration of CHA licence - violation of Regulation 12 - Held that - though the said Manish Sangani was found to have utilised the licence, the said Manish Sangani himself was a CHA. His licence was suspended. Though the licence was suspended, the Customs did not forfeit the authorisation in his favour and seize the documents in that regard. Therefore, the involvement of the Customs Officers was also directed to be probed by the tribunal. In the facts and circumstances of the present case, though upholding the charges and the findings of the inquiry officer in that regard, the quantum of punishment was interfered with. Once we have found that the licence was not in use from 29th March, 2012 and till date, then, the tribunal s order does not require any interference. It cannot be termed as perverse or vitiated by error of law apparent on the face of the record. We, therefore, dismiss this appeal - the CHA licence of the respondent would be restored.

Summary

Issues:
Challenge to CESTAT order regarding violation of regulations by Customs House Agent (CHA) leading to unauthorized transfer of license.

Analysis:
The appeal by the Revenue challenges the CESTAT order regarding the violation of regulations by a Customs House Agent (CHA) resulting in the unauthorized transfer of a license. The appellant argues that the violation of Regulation 12, which prohibits unauthorized transfer of a license, was evident as the respondent allowed an individual not employed by the firm holding the license to use it. Additionally, Regulation 13(a) mandating proper authorization for CHAs was breached, along with the requirement for CHAs to transact business through approved employees. The appellant contends that the tribunal erred in restoring the license, as the violations were serious and the punishment inadequate. The appellant relies on the judgment of the Supreme Court in a similar case to support their argument.

On the other hand, the respondent argues that the tribunal's order did not raise any substantial question of law. They assert that while the CHA allowed unauthorized use of the license, the physical transfer did not occur. The respondent also highlights that the tribunal considered the CHA's inability to use the license for three years as sufficient punishment, reducing the penalty based on the unique circumstances of the case. They argue that the tribunal's decision was reasonable and should not be interfered with.

Upon reviewing the facts and findings, the court notes that the CHA license was granted under specific regulations, and the violation was based on the unauthorized use of the license by an individual whose license was suspended. The court distinguishes this case from a previous Supreme Court judgment involving serious fraudulent activities by emphasizing the lack of active involvement and repetitive violations. The court concludes that the tribunal's decision to reduce the penalty due to the CHA's inability to use the license for an extended period was reasonable and not perverse. As a result, the court dismisses the appeal, with the appellant agreeing to restore the CHA license within a week. Consequently, the notices of motion are disposed of.