2018 (4) TMI 786 - AT - Customs

Revocation of CHA License - forfeiture of security deposit - time limitation - SCN has not been issued within 90 days from the date of the Offence Report i.e. 01.11.2014 - contravention of Regulation 11(a), (d), (e), (n) as well as Regulation 17(9) - Held that - the contravention of Regulation 11(a), (d), (e), (n) as well as Regulation 17(9) stands established against the appellant. Keeping in view the Principle of Proportionality, the revocation of CB licence is to harsh a penalty to be imposed on the appellant. The ends of justice will be met by ordering forfeiture of the whole amount of security deposit of ₹ 75,000/- furnished by them. In addition, a penalty of ₹ 50,000/- imposed on the appellant. Appeal allowed in part.

Summary

Issues:
1. Time bar for issuing Show Cause Notice (SCN)
2. Allegations against the appellant on merit
3. Violations of various regulations by the appellant
4. Justification of the impugned order
5. Decision on the appeal

Analysis:

Issue 1: Time bar for issuing Show Cause Notice (SCN)
The appellant argued that the SCN issued on 03.03.2015 was time-barred as it was not issued within 90 days from the date of the Offence Report on 01.11.2014. However, the Tribunal had previously considered this issue and decided in favor of the Revenue. The appellant's claim of manipulation of dates by the Commissioner Customs was refuted, and it was established that there was no violation of the time limit prescribed under Regulation 20 of CBLR 2013.

Issue 2: Allegations against the appellant on merit
The appellant was alleged to have violated various regulations, including:
- Failure to obtain proper authorization from the importer
- Failure to advise the client to comply with Customs Act provisions
- Lack of due diligence in verifying information and client antecedents
- Failure to supervise employees properly

Issue 3: Violations of various regulations by the appellant
a) Violation of Regulation 11(a): The appellant failed to obtain proper authorization from the importer, and the employee acted without proper authorization.
b) Violation of Regulation 11(d): The appellant did not advise the client to comply with Customs Act provisions and facilitated under-valued importation of goods.
c) Violation of Regulation 11(e) and 11(n): The appellant failed to exercise due diligence and verify client information and antecedents.
d) Violation of Regulation 17(9): The appellant failed to supervise its employee properly, leading to fraudulent import under DFIA.

Issue 4: Justification of the impugned order
The Tribunal found the contravention of various regulations to be established against the appellant, making them liable for penal consequences. However, considering the Principle of Proportionality, the revocation of the Customs Broker (CB) license was deemed too harsh a penalty. Instead, the Tribunal ordered forfeiture of the security deposit and imposed a penalty, modifying the impugned order accordingly.

Issue 5: Decision on the appeal
The Tribunal partly allowed the appeal, modifying the impugned order by ordering forfeiture of the security deposit and imposing a penalty on the appellant. The decision was based on the Principle of Proportionality and the peculiar facts and circumstances of the case.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the Tribunal's decision and the arguments presented by both parties.