2019 (1) TMI 1318 - AT - Customs

Suspension of CHA License - forfeiture of security deposit - smuggling of prohibited goods - Red Sanders woods - forged documents - the permission granted to the appellant to operate as CHA in Mumbai Customs under Regulation 10(2) of CHALR, 2004 was placed under suspension - Held that - The inquiry officer vide his letter dated 18.04.2011 had furnished the report, stating inter alia that with regard to contravention of Rule 13(a), no independent evidence was brought on record to prove the charges against the appellant. However, with regard to the charges framed under Regulation 13(b), such officer had held that the conditions prescribed therein have been violated by the appellant. On the basis of inquiry report and upon analysis of the records, the Learned Commissioner (Appeals) has recorded the findings in support of forfeiture of security deposit amount and for making fresh deposit by the appellant. Filing of shipping bills - claim of appellant is that the shipping bills were not filed by it - Held that - The Learned Adjudicating Authority at Para 2 has furnished the reference of shipping bills, which were filed on behalf of the CHA-appellant. Thus, it cannot be said that no shipping bills were filed in respect of export of Red Sanders. Since the appellant is strictly guided under such instructions, in order to safeguard the revenue and misuse of license by the offenders, non observance of such facility Notice cannot be termed as a technical breach of law and thus, forfeiture of the security deposit amount and ordered for making fresh security deposit in terms of the CHALR, 2004 by the adjudicating authority cannot be interfered with at this juncture There is no infirmity in the impugned order, so far as it forfeited the entire security deposit amount and directed for making fresh security deposit in terms of CHALR, 2004 - appeal dismissed - decided against appellant.

Summary

Issues:
1. Violation of Regulation 13(a) and 13(b) of CHALR, 2004
2. Compliance with Facility Notice No. 41/2009
3. Forfeiture of security deposit and fresh deposit requirement

Analysis:

Violation of Regulation 13(a) and 13(b) of CHALR, 2004:
The appellant was accused of violating Regulation 13(a) and 13(b) of the CHALR, 2004 concerning fraudulent exportation of Red Sanders wood. The inquiry officer's report highlighted the lack of independent evidence for the charges under Regulation 13(a) but found the appellant in violation of conditions under Regulation 13(b). The Commissioner upheld the findings, leading to the forfeiture of the security deposit and a directive for a fresh deposit. The adjudicating authority referenced filed shipping bills, contradicting the appellant's claim of non-filing. The failure to diligently follow Facility Notice 41/09 was deemed a serious breach, justifying the penalty imposed.

Compliance with Facility Notice No. 41/2009:
The appellant contested the suspension of their CHA license based on non-compliance with Facility Notice No. 41/2009, arguing it was a technicality. However, the Tribunal found that the appellant's failure to adhere to the notice, aimed at preventing misuse and safeguarding revenue, was not a mere technical breach. The Tribunal emphasized the importance of strict adherence to such instructions to prevent fraudulent activities and protect the integrity of the licensing system.

Forfeiture of security deposit and fresh deposit requirement:
The impugned order forfeited the appellant's entire security deposit and mandated a fresh deposit in line with CHALR, 2004. The Tribunal upheld this decision, citing the appellant's lack of preventive measures against fraudulent exports facilitated by the misuse of their PAN. The Tribunal concluded that the forfeiture and deposit requirements were justified given the appellant's negligence in overseeing the shipping transactions and their failure to comply with regulatory guidelines.

In conclusion, the Tribunal dismissed the appeal, finding no faults in the impugned order regarding the forfeiture of the security deposit and the directive for a fresh deposit. The judgment underscores the significance of strict compliance with regulatory requirements, especially in preventing fraudulent activities and maintaining the integrity of customs operations.