2017 (12) TMI 983 - HC - Customs

Revocation of CHA license - forfeiture of security deposit - issuance of bogus exemption certificate - Section 9(1) of the Customs House Agent Licensing Regulation, 2004 - Held that - it was found that the CHA had received a copy of the bill of exchange with zero customs duty duly signed by the then Custom officer. The CBI has also stated in the charge sheet that the respondent CHA had retained photocopies of the said bill of exchange for its office records and had forwarded the original copies of the same along with his bill to the importer for getting payments, thus clearly implying that the CHA had performed its part of the duties and no role in the forging of the bill of exchange - respondent s direct involvement with the importer i.e. the beneficiary was not established - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Condonation of delay in re-filing the appeal.
2. Appeal challenging the order of forfeiture of security deposit imposed on a company holding a Custom House Agent license.
3. Allegations of using forged documents by the importer.
4. Appellant's contention regarding the proportionality of the punishment.
5. Examination of the factual findings by the Commissioner of Customs and the Appellate Tribunal.
6. Departmental action against officers accepting the forged documents.
7. Investigation by the Central Bureau of Investigation (CBI) and the charge sheet filed.

Condonation of Delay:
The delay of 50 days in re-filing the appeal was condoned by the court, and the application for condonation of delay was disposed of accordingly.

Challenge to Forfeiture Order:
The appeal filed by the Commissioner of Customs contested the order forfeiting the security deposit of the respondent company, a Custom House Agent, imposed under the Customs House Agent Licensing Regulation, 2004. The appellant argued that the punishment of forfeiture was disproportionate and not commensurate with the allegations.

Allegations of Using Forged Documents:
The importer was found to have used forged documents, leading to the involvement of the respondent company. The director of the respondent company admitted discrepancies in the documents, indicating that the exemption certificate was not signed by the appropriate authority as required by law.

Proportionality of Punishment:
The appellant contended that the punishment of forfeiture imposed on the respondent company was excessive, considering the circumstances. The appellant sought revocation of the company's license, arguing that the punishment did not align with the severity of the allegations.

Examination of Factual Findings:
Both the Commissioner of Customs and the Appellate Tribunal based their decisions on factual assessments. Despite acknowledging the respondent's failure to fulfill obligations, a harsher punishment was deemed unjustified. The authorities highlighted that the customs officials should have detected the forged documents, as the respondent company claimed they were unaware and not complicit in the forgery.

Departmental Action and CBI Investigation:
Questions were raised regarding the lack of departmental action against officers who accepted the forged documents. The CBI investigation did not charge the respondent company, emphasizing that they had not established a direct involvement in the forgery. The court dismissed the appeal, stating that no substantial legal questions arose from the Tribunal's order, under the Customs Act, 1962.

In conclusion, the High Court dismissed the appeal challenging the order of forfeiture of the security deposit imposed on the respondent company, a Custom House Agent, emphasizing the lack of substantial legal questions warranting interference. The court highlighted the factual assessments made by the authorities and the CBI investigation findings, which did not establish the respondent's direct involvement in the forgery. The decision underscored the importance of customs officials' responsibilities in detecting fraudulent activities and concluded that the punishment imposed was not disproportionate in this case.