2004 (12) TMI 275 - AT - Customs

Summary

Issues Involved:
1. Misdeclaration and undervaluation of imported goods.
2. Violation of Customs House Agents Licensing Regulations (CHALR) by the Customs House Agent (CHA).
3. Suspension of CHA licence and forfeiture of security deposit.

Issue-wise Detailed Analysis:

1. Misdeclaration and Undervaluation of Imported Goods:
The Directorate of Revenue Intelligence (DRI) examined a consignment imported by M/s. Rising Star Enterprises, declared as plastic cables, connectors, and cooling fans, valued at Rs. 2,24,985/- with a duty liability of Rs. 1,35,631/-. The Bill of Lading described the goods as computer parts, classifiable under a different entry in the Customs Tariff, attracting a higher duty rate. The DRI's investigation led to a case of misdeclaration and undervaluation against the importer, resulting in the absolute confiscation of goods under Section 111(d) of the Customs Act and a penalty under Section 112(a).

2. Violation of Customs House Agents Licensing Regulations (CHALR) by the CHA:
The CHA, who filed the Bill of Entry, was found to have violated several obligations under the CHALR. The Commissioner of Customs (Seaport) suspended the CHA licence pending investigation, which was later upheld by the Tribunal. The CHA was found to have breached Regulations 14(a), 14(b), 14(d), 14(e), 14(l), and 20(7). The CHA allowed M/s. Esteem Shipping Agencies, which did not have a CHA licence, to file Bills of Entry in their name for monetary consideration. Statements from the CHA's partner and manager revealed that the CHA had no knowledge of the import details and had signed blank annexures, which were then used by Esteem Shipping Agencies. This activity was in gross breach of the CHALR provisions.

3. Suspension of CHA Licence and Forfeiture of Security Deposit:
The Commissioner suspended the CHA licence for three years, including the period already elapsed, and forfeited the security deposit of Rs. 25,000/-. The Tribunal found the punishment proportionate to the gravity of the offence. The CHA's counsel argued that the punishment was disproportionate, citing the Tribunal's decision in Sanjay Forwarders v. CC, Chennai, where the suspension period was reduced. However, the Tribunal upheld the Commissioner's decision, noting that the Commissioner had been lenient by not revoking the licence entirely. The forfeiture of the security deposit was not challenged in the appeal.

Conclusion:
The Tribunal upheld the Commissioner's order, confirming the suspension of the CHA licence for three years and the forfeiture of the security deposit, citing the evidence of gross violations of the CHALR by the CHA. The appeal was rejected.