1996 (3) TMI 219 - AT - Customs

Summary

Issues: Denial of renewal of Custom House Agent's (CHA) license, employee's fabrication of examination report, failure to ensure proper conduct of employee, severity of punishment.

Analysis:

1. Denial of renewal of CHA license:
The case revolves around the denial of renewal of the appellant's CHA license from 5-3-1994 onwards due to an incident involving the fabrication of an examination report by the appellant's employee, K.K. Verma. The Commissioner's order was based on the appellant's failure to ensure the proper conduct of its employee, leading to non-compliance with the provisions of Regulation 7 of Custom House Agent's License Regulations, 1984.

2. Employee's fabrication of examination report:
The appellant argued that it was not conclusively proven that Verma fabricated the examination report, suggesting that anyone could have accessed the shipping bill. However, it was established that the report was not written by any Customs Officer, raising doubts about the appellant's employee's integrity. The appellant's claim of lack of personal gain from the forgery and absence of duty or drawback liability on the consignment were deemed irrelevant.

3. Failure to ensure proper conduct of employee:
The appellant's defense included the absence of the managing partner during the incident and Verma's failure to report back to duty. However, the Tribunal emphasized that it is the responsibility of the CHA to ensure the proper conduct of its employees, regardless of the managing partner's presence. The failure to report the fabrication to Customs authorities was considered a serious lapse.

4. Severity of punishment:
The Tribunal acknowledged that the permanent cancellation of the license would be too severe a punishment, considering factors such as the appellant's two-year deprivation of employment, the nature of the consignment involved (books), and the appellant's previous good record. The Tribunal modified the Commissioner's order, setting aside the cancellation and replacing it with a suspension until 31st March, 1996, after which the license would be restored to the appellant.

In conclusion, the Tribunal found the appellant's employee guilty of fabricating an examination report, leading to the denial of license renewal. However, considering the circumstances and the appellant's previous track record, the Tribunal opted for a lesser punishment of suspension instead of permanent cancellation, allowing the appellant to resume its CHA activities from 1st April, 1996 onwards.