2021 (11) TMI 696 - AT - Customs

Revocation of CHA License - Forfeiture of security deposit - levy of penalty - it is the contention of Learned Counsel that the proceedings were conducted behind the back of the licensee, that there are no findings recorded by the inquiry authority - principles of natural justice - HELD THAT - The procedure prescribed under regulation no. 22 of Customs House Agents Licensing Regulations, 2004 envisages a specific role for the Inquiry Authority in the process elaborated therein. This, doubtlessly, presumes the participation of the customs house agent. It is on record that these procedures were not followed and the conclusion had been arrived at on presumed admission as reported by the Presenting Officer. The ostensible reason for such summary conclusion was the non-availability of the licensee at the licensed address - Without examining the legality of continuance of proceedings after the nominated official ceased to be Deputy/Assistant Commissioner of Customs, the absence of any record evincing that licensee had been placed on notice about acquiescence of the Commissioner of Customs with the re-designated official carrying out the entrusted task may well have been the reason for non-acceptance of communication emanating from an address that could, conceivably, alarm the appellant herein. It is on record that the alleged breach of obligations were grounded in the proceedings initiated under Customs Act, 1962 at Faridabad and the closure thereof erases the foundation on which the customs house agent was issued with the charge-sheet. Furthermore, a customs house agent is licensed under the authority of section 146 of Customs Act, 1962 in terms of which the agency function should commence with declarations filed under section 46 or section 50, as the case may be, of Customs Act, 1962 - The absence of seals and the discrepancy in weight pertained to containers delivered at the designated place of export before the shipping bill was filed; these occurred prior to the statutory responsibility thrust upon the customs house agent could be said to have commenced. Furthermore, the licensing authority failed in ascertaining the extent of responsibility as it is evident that the custodian had been derelict in accepting such consignments or that such deliveries were conventionally accepted in the said jurisdiction. The incident which gave rise to the proceedings occurred in January 2011 and the proceedings took one full year thereafter to commence. The role of the customs house agent in the alleged breach of procedure was also found to be condonable in adjudication proceeding - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to order forfeiting security deposit under regulation no. 20 of Customs House Agents Licensing Regulations, 1984.

Detailed Analysis:

1. Conduct of Proceedings:
The appellant challenged the order forfeiting the security deposit under regulation no. 20 of Customs House Agents Licensing Regulations, 1984. The appellant's contention was that the proceedings were conducted without findings by the inquiry authority, the penalty was disproportionate, and any breach was procedural. The Authorized Representative argued that findings were rendered by the licensing authority and the penalty imposed was the least prescribed.

2. Circumstances Leading to Order:
The appellant, a licensed agent, was proceeded against for exporting goods without proper documentation. The show cause notice was issued, proceedings were initiated, and the Inquiry Authority continued with the charges even after other related proceedings were dropped. The licensee was reportedly not available at the licensed address, leading to a summary conclusion based on presumed admission by the Presenting Officer.

3. Legality of Proceedings:
The judgment questioned the legality of continuing proceedings with a changed official without proper notification to the licensee. It highlighted the failure to follow the prescribed procedures and the lack of communication with the licensee, which tainted the conclusions and consequences of the proceedings.

4. Need for Fresh Proceedings:
The judgment deliberated on the necessity of fresh proceedings, considering the closure of the original case and the limited scope of the alleged breach. It emphasized that public interest did not warrant resuming the proceedings for the imposition of a penalty that could not exceed forfeiture of the security deposit.

Conclusion:
The impugned order forfeiting the security deposit was set aside, and the appeal was allowed based on the procedural irregularities and lack of justification for resuming the proceedings. The judgment was pronounced in open court on 17/11/2021.