2008 (1) TMI 136 - AT - Customs

On basis of statement against CHA license was suspended on the ground that their activities of subletting their CHA licence which resulted in attempted export of Red Sanders/Sandal Wood Logs misdeclared as Metal Lamp Stands was detrimental to national interest - statement recorded under Sec.108 of the Customs Act 1962 cannot be used as evidence under CHA Licensing Regulations 2004 decision of tribunal in Thakkar Shipping Agency case is applicable in present case assessee appeal allowed

Summary

Issues:
- Suspension of CHA license based on subletting activities
- Reliability of statements recorded under Sec.108 of the Customs Act, 1962
- Compliance with CHAL Regulations for suspension or revocation of license
- Applicability of previous judgments in similar cases

Suspension of CHA License:
The Commissioner of Customs suspended the CHA license of the appellants due to subletting activities leading to the attempted export of misdeclared goods. The appellants argued that statements recorded under Sec.108 of the Customs Act, 1962, cannot be relied upon in proceedings under the CHAL Regulations. They cited the Thakkar Shipping Agency case, where it was held that such statements are not admissible as evidence. The Tribunal found merit in this argument and set aside the suspension order.

Reliability of Statements:
The Tribunal emphasized the necessity of complying with the CHAL Regulations for suspending or revoking a license. It highlighted the requirement of recording evidence and offering the persons for cross-examination under the relevant provisions. The Tribunal referred to previous decisions, including Thakkar Shipping Agency, Extin Shipping (India) Ltd, and J.B. Udani Co., which supported the inadmissibility of statements recorded under Sec.108 of the Customs Act, 1962, in CHAL proceedings.

Compliance with CHAL Regulations:
The Tribunal rejected the argument that previous judgments unrelated to CHAL Regulations could justify the suspension based on statements recorded under Sec.108 of the Customs Act, 1962. It upheld the importance of following the specific procedures outlined in the CHAL Regulations for both suspension and revocation of CHA licenses. The Tribunal's decision was based on maintaining consistency with previous rulings and ensuring procedural fairness.

Applicability of Previous Judgments:
The Tribunal dismissed the reliance on judgments from other contexts, such as the validity of seizure of goods in illegal searches, to support the suspension based on statements recorded under Sec.108 of the Customs Act, 1962. Instead, the Tribunal upheld the precedence set by cases like Thakkar Shipping Agency, which directly addressed the issue of admissibility of such statements in CHAL proceedings. The Tribunal allowed the appeal and set aside the suspension order, clarifying that the decision did not prevent the Department from conducting a regular inquiry under the Regulations.