2001 (2) TMI 347 - AT - Customs

Summary

Issues Involved:
1. Failure to exercise supervision over employees u/r 20(7) of the Customs House Agents Licensing Regulations (CHALR), 1984.
2. Liability of CHA for the acts of omission or commission by employees.
3. Validity of revocation of CHA licence.

Summary:

Issue 1: Failure to Exercise Supervision u/r 20(7) of CHALR
The Commissioner of Customs revoked the CHA licence on the grounds of failure to supervise employees, Shri Mukesh Goel and Shri Virender Singh, as required u/r 20(7) of CHALR, 1984. The Enquiry officer concluded that no case was made out for cancellation of the CHA licence in both cases of short shipment of polypropylene ropes and export of hashish. The Commissioner, however, held the CHA liable for the acts of their employees, citing that the frauds occurred in the normal course of business.

Issue 2: Liability of CHA for Acts of Employees
In the first case, the Adjudicating Authority dropped the charge of abetment to fraud against the CHA, stating that the CHA partners had no knowledge of the short shipment and that the employee, Shri Virender Singh, acted in his personal capacity. Similarly, in the second case, the Enquiry officer found no evidence that the CHA was aware of the concealment of hashish, concluding that Shri Mukesh Goel misused his authority independently without informing the CHA.

Issue 3: Validity of Revocation of CHA Licence
The Tribunal noted that the CHA had already suffered hardship due to the suspension of their licence and the refusal of temporary renewal. The Tribunal found no evidence implicating the CHA directors in the frauds committed by their employees. It was held that the CHA did exercise necessary supervision as far as humanly possible and that the acts of the employees were independent and unauthorized. Consequently, the Tribunal set aside the order of revocation of the CHA licence, stating that such a grave punishment was not justified as it permanently deprived the CHA of their livelihood.

Conclusion:
The Tribunal allowed the appeal, setting aside the revocation of the CHA licence and granting consequential relief, holding that the CHA did not fail to exercise proper supervision over their employees as per Regulation 20(7) of the CHALR.