2014 (8) TMI 773 - AT - Customs

Revocation of CHA License - Knowledge of anything contrary to the restrictions imposed - employees of the appellant did wrong acts without appellant s knowledge - Held that - Appellant is not contesting the order on merits but argues the case on leniency as they have not knowingly done anything contrary to the restrictions imposed and has already suffered a lot in the past two years. It was argued by the advocate on behalf of the appellant that the employees of the appellant did wrong acts without appellant s knowledge. It was his case that a penalty of suspension/ revocation of appellant CHA licence for two years may be considered as sufficient penalty as appellant is jobless and does not have any other source of income. It is observed from the findings of the adjudicating authority in paras 19.4 and 19.5 of the OIO dated 17.09.2013 that Shri Piyush Gohel and Shri Ramesh Makupalli carried out the clearance work of M/s. Oswal without the knowledge of the appellant. However, adjudicating authority holds that appellant has to be held responsible for all the acts and omissions of his employees as per Regulation 19(8) of the CHAL Regulations, 2004. The order of the adjudicating authority for suspension/ revocation of appellant s CHA licence is therefore justified. The forfeiture of security deposit shall remain. The appellant has to furnish fresh security deposit as per law for resuming work as CHA.

Summary

Issues: Revocation of Custom House Agents Licence and Forfeiture of Security Deposit

Issue 1: Revocation of Custom House Agents Licence
The appeal was filed against the Order-in-Original (OIO) revoking the Custom House Agents Licence held by the appellant for providing services at Kandla and Mundra ports. The adjudicating authority revoked the license based on the appellant's involvement in the illegal import of restricted items, specifically 'Poppy Seeds' declared as 'Carom Seeds' in a Bill of Entry. The appellant's lack of supervision over employees, who engaged in unauthorized activities, led to the suspension and subsequent revocation of the license. The appellant argued for leniency, citing the health issues of one partner and the lack of knowledge regarding the employees' actions. The advocate for the appellant relied on case laws to support the argument for setting aside the revocation.

Issue 2: Forfeiture of Security Deposit
In addition to revoking the license, the adjudicating authority also forfeited a security deposit of Rs. 75,000 furnished by the appellant as per Regulation 20(1) of the CHA Regulations, 2004. The appellant contested the forfeiture, emphasizing their lack of direct involvement in the illegal activities carried out by their employees. The advocate for the appellant sought leniency based on the appellant's suffering over two years without income and requested the order to be set aside retrospectively.

Analysis and Conclusion
The advocate for the appellant argued for leniency due to the appellant's lack of knowledge regarding the unauthorized actions of their employees. However, the adjudicating authority held the appellant vicariously responsible for the acts of their employees as per Regulation 19(8) of the CHA Regulations, justifying the suspension and revocation of the license. The appellate tribunal, while upholding the order on merits, allowed the appeal to the extent of setting aside the revocation of the CHA license. The tribunal ordered that the revocation would be operational until a specified date, after which the appellant's license should be reinstated. The forfeiture of the security deposit was upheld, with the requirement for the appellant to furnish a fresh security deposit to resume work as a CHA. The decision balanced the accountability of the appellant with considerations of justice and the appellant's circumstances.