1995 (7) TMI 212 - AT - Customs

Summary

Issues Involved:
1. Validity of the order for forfeiture of the security deposit.
2. Alleged contravention of Regulations 14(a), 14(k), and 20(7).
3. Adequacy of supervision by the Customs House Agent (CHA).
4. Maintenance of proper records and accounts.
5. Quantum of forfeiture of the security deposit.

Issue-wise Detailed Analysis:

1. Validity of the order for forfeiture of the security deposit:
The appellants challenged the Collector's authority to order only the forfeiture of the security deposit without suspending or canceling the licence. The Tribunal examined Regulation 21(1) which states, "The Collector may, subject to the provisions of Regulation 23 suspend or revoke the licence of a Customs House Agent, so far as the jurisdiction of the Collector is concerned and also order forfeiture of security on any of the following grounds." The Tribunal interpreted that the Collector has the discretion to suspend or revoke the licence and also order forfeiture of the security deposit. The conjunction "or" between "suspension" and "revocation" is missing when it comes to forfeiture, indicating that forfeiture should accompany suspension or revocation. However, due to simultaneous proceedings where the licence was suspended in another order on the same day, the Tribunal did not find the order invalid despite the technicality.

2. Alleged contravention of Regulations 14(a), 14(k), and 20(7):
The appellants were accused of attending to the clearance of baggage without proper authorization, failing to maintain proper records, and not exercising necessary supervision over their employee. The enquiry officer found these charges established, and the Collector concurred. The Tribunal upheld these findings, noting that Mr. Gul Malkani, an employee, was unauthorizedly clearing baggage and that the CHA failed to supervise effectively.

3. Adequacy of supervision by the Customs House Agent (CHA):
The Tribunal noted that Mr. Gul Malkani was an employee of the appellant and was found attending to the clearance work without proper authorization. The presence of the proprietor, Mr. Naresh Kothari, in the Baggage Hall without exercising effective supervision was a significant point. The Tribunal agreed with the Collector's conclusion that there was a failure in supervision.

4. Maintenance of proper records and accounts:
The appellants admitted irregular maintenance of records, stating that documents were filed according to convenience and accounts were prepared by the Accountant as and when he came to the office. The Tribunal found this lack of regularity in maintaining accounts clear and upheld the Collector's finding of contravention of Regulation 14(k).

5. Quantum of forfeiture of the security deposit:
The appellants argued that the forfeiture of the entire security deposit was too harsh and sought a reduction. The Tribunal referred to Regulation 21(1), which does not allow partial forfeiture. The Tribunal also considered the Supreme Court judgment in Union of India v. Paras Laminates (Pvt.) Ltd., which stated that the Tribunal has inherent powers to make the statutory provisions effective but these powers are limited. Since the Regulation did not provide for partial forfeiture, the Tribunal could not reduce the amount. Additionally, considering the contraventions and the simultaneous suspension of the licence in another proceeding, the Tribunal found no justifiable ground to reduce the forfeiture amount.

Conclusion:
The Tribunal rejected the appeal, upholding the Collector's order for forfeiture of the entire security deposit and confirming the findings of contravention of the relevant regulations by the appellants.