2014 (3) TMI 317 - AT - Customs

Suspension of CHA licence in respect of Bombay Shipping Agency vide order was continued pending enquiry against CHA under Regulation 22 of the CHALR, 2004 - Changes in FOB value and unit price - Violation of Regulation 13(b), 13(d) and 13(o) of CHALR, 2004 - Sub letting of license - Held that - There is no evidence available on record, at this stage, to show the involvement of Shri Deepak Joshi in undertaking any transaction in respect of the export consignments within the Customs area. Only if the services have been used within the Customs area without proper authorisation from the Customs, the allegation can sustain and it is premature at this stage to come to any conclusion in this regard. The use of a person for transacting the business should be in the Customs station. If the services of a person has been availed outside the Customs station, violation of Regulation 13(b) would not arise at all. The violation of Regulation 13(d) of not advising the client to comply with the provisions of the Act and not bringing the matter to the notice of the Dy. Commissioner of Customs also do not appear to be sustainable because, in the present case, the appellant had taken the permission of the apprising officer of the Customs before the documents were handed over to the CWC for amendment of the shipping bills. Even though the apprising officer is not the proper officer to allow such amendment, nothing prevented the said officer in directing the appellant-CHA to approach the Dy. Commissioner/Asstt. Commissioner (Docks), as the case may be. It is not the case that the transaction was not brought to the notice of the Customs at all. Without completing the enquiry, the charges against the appellant could not be confirmed. In view of the fact that the appellant has an unblemished track record and also considering the fact that his licence has been suspended for a period of more than 10 months or so, we are of the view that there is no need to continue with the suspension - Accordingly, we revoke the suspension of the CHA licence done by the impugned order. The Customs is at liberty to conduct the enquiry against the appellant-CHA in terms of Regulation 22 of the CHALR, 2004 and to take appropriate action in accordance with law on completion of such enquiry - Decided in favour of appellants.

Summary

Issues:
Violation of Regulations 12, 13(b), 13(d), 13(e), 13(n), and 19(8) of the CHALR, 2004; Principles of natural justice; Failure to supply statements made by the partner of the appellant-firm and exporters; Allegations of sub-letting license; Use of unauthorized person for transactions; Failure to advise client on compliance; Lack of due diligence; Failure to verify antecedents and correctness of IEC number.

Analysis:

Violation of Regulations 12, 13(b), 13(d), 13(e), 13(n), and 19(8) of the CHALR, 2004:
The appellant, M/s. Bombay Shipping Agency, was found to have violated various regulations under the CHALR, 2004, including sub-letting the license, transacting through an unauthorized person, failing to advise the client on compliance, lack of due diligence, and not verifying antecedents correctly. The suspension of the CHA license was continued pending enquiry based on these violations.

Principles of Natural Justice:
The appellant argued a violation of principles of natural justice as the scope of charges was widened in the impugned order without prior notice during the post-decisional hearing. Additionally, the appellant was not provided with statements made by the partner of the firm and exporters, impacting their ability to defend against the allegations.

Allegations of Sub-letting License and Unauthorized Transactions:
The appellant refuted the allegation of sub-letting the license by stating that procuring business through an individual does not equate to sub-letting. The involvement of the unauthorized person in transactions within the Customs station was not substantiated, and it was premature to conclude on this matter.

Failure to Advise Client and Due Diligence:
The appellant's failure to advise the client on compliance and exercise due diligence was contested. The appellant had taken permission from the apprising officer before amending shipping bills, indicating a level of compliance. The allegations of not advising the client and lack of diligence were deemed unsustainable without further investigation.

Verification of Antecedents and IEC Number:
The appellant's failure to verify antecedents and correctness of the IEC number was addressed. The appellant had obtained and verified the IEC code of the exporter, and the genuineness of the code was not disputed. The inability to verify the functioning of the exporter at the declared address due to geographical constraints was considered in the decision.

Conclusion:
Considering the lack of conclusive evidence and the appellant's unblemished track record, the suspension of the CHA license was revoked. The Tribunal emphasized the need for a complete enquiry before confirming charges. The Customs was granted the liberty to conduct further investigation and take appropriate action in accordance with the law post-enquiry, as per Regulation 22 of the CHALR, 2004.