2012 (8) TMI 295 - AT - Customs

Revocation of CHA licence licence was suspended on the ground that preventive section of JNPT has found the sample of polyester fabric which were imported vide bill of entry 624245 dated 11.01.07 were replaced by some other sample nor seek the classification under CTH 58109290 - Held that - Neither the directors of appellant firm were examined nor cross examined - Mr. Hotkar, who was the temporary employee was found to be the main person for replacing the samples who was not holding the custom pass. In fact Mr. Hotkar was not authorised by the appellant firm - appellant firm cannot be held liable for the Act committed by Mr. Hotkar who was not an employee of the appellant firm. Moreover, there is no corroborative evidence is brought on record by the department to prove that the appellant or their directors were in the knowledge of the act committed by Mr. Hotkar - action taken by the Commissioner (Appeals) against the appellant is harsh and without considering the true and correct facts - order of revocation of the appellant s CHA licence set aside appeal allowed

Issues: Revocation of CHA licence based on alleged involvement in customs duty evasion.

Analysis:
1. The appellant, a CHA firm, filed an appeal against the revocation of their CHA licence due to alleged involvement in customs duty evasion related to the import of Polyester Fabrics declared as Embroidery Fabrics.
2. The goods were found to be Plain Polyester Dyed Woven Fabrics instead of the declared Embroidery Fabrics, leading to suspicion of misclassification for duty evasion.
3. The appellant's license was suspended based on the suspicion that the imported fabrics were replaced with a different sample, and the classification under CTH 58109290 was not sought.
4. The appellant argued that the Customs Act proceedings against them were dropped by the Commissioner (Appeals), and no appeal was filed by the department against this decision. They also claimed that the enquiry proceedings were flawed as the directors were not allowed to cross-examine witnesses.
5. The revenue contended that the directors' statements recorded under section 108 of the Customs Act could be considered as part of the proceedings, proving the charges against the appellant.
6. The Tribunal found that the directors of the appellant firm were not examined or cross-examined during the enquiry proceedings, undermining the findings based on their alleged statements. It was noted that the temporary employee, not authorized by the appellant, was primarily responsible for replacing the samples.
7. The Tribunal concluded that there was no evidence to prove that the appellant or their directors were aware of the actions of the temporary employee. The revocation of the license was deemed harsh, considering the exoneration by the Commissioner (Appeals) and the lack of appeal by the revenue.
8. Consequently, the impugned order revoking the appellant's CHA license was set aside with immediate effect, granting the appeal with consequential relief.

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