2015 (11) TMI 1155 - AT - Customs

Revocation of CHA license - Forfeiture of security deposit - Misdeclaration of goods - violation of Regulation 13(a), (d), (e) and (o) of the CHALR, 2004 - appellant had not obtained authorisation from the exporter who was not in existence - Held that - It is evident from the facts and evidence on record and is not contested by the appellant that the appellant did not take any authorisation from the exporter and had never met it (i.e. exporter) or got in touch with it (i.e. the exporter) even on telephone. In such a scenario, it was obviously not possible for the appellant to claim that the documents were signed by the exporter. In the case of P.P. Dutta (supra) it was recorded as a fact that the documents were signed by the exporter. Thus, the violation of Regulation 13(a) is established. When the appellant never met the exporter and was never even in touch with it, it was obviously not in a position to advise it (i.e. the exporter) to comply with the provisions of the Customs Act and thus it failed to fulfil its obligation under Regulation 13(d) ibid and thereby stood in violation thereof. For the same reason, the appellant was not in position to impart any information to its client and hence the violation of Regulation 113(e). We however agree with the appellant that Regulation 113(o) came into existence 08.04.2010 and therefore it cannot be held guilty of violation thereof as the shipping bills were filed in July 2009. As against the time limit of 90 days prescribed under Regulation 22(5), the report was submitted after more than three years which renders the proceedings in such gross and blatant violation of Regulation 22 that to sustain them would not merely mean showing disrespect to or ignoring the said provision; it would mean insult to the said provision. Therefore, the said proceedings have to be held to be unsustainable. - Decided in favour of appellant.

Summary

Issues:
Revocation of Customs broker license and forfeiture of security deposit.

Analysis:
The case involved an appeal against the revocation of a Customs broker license and the forfeiture of the security deposit. The appellant had filed shipping bills under the Duty Drawback Scheme for consignments of readymade garments, which were found to be short and of inferior quality during examination. Investigations revealed that the exporter mentioned in the shipping bills was non-existent, leading to the revocation of the appellant's license based on violations of CHALR, 2004 regulations. The appellant raised several contentions, including the delay in investigations, compliance with regulations, and the introduction of new norms post the filing of shipping bills.

The tribunal considered the arguments presented by both sides. It was established that the appellant did not obtain authorization from the non-existent exporter, never met or contacted the exporter, and failed to fulfill obligations under Regulation 13(a), (d), and (e). The tribunal agreed that the appellant could not be held guilty of violating Regulation 13(o) as it came into existence after the filing of shipping bills. However, the proceedings were found to violate the timeline prescribed under Regulation 22 of CHALR, 2004, as the enquiry report was submitted more than three years after the notice was issued, rendering the proceedings unsustainable.

The tribunal rejected the Revenue's argument that the timeline under Regulation 22 should be considered directory rather than mandatory. It emphasized the importance of respecting prescribed timelines in subordinate legislation, even if considered directory. The tribunal referenced the Delhi High Court judgment in a similar case involving the suspension of a license and concluded that the gross violation of Regulation 22 warranted setting aside the impugned order and allowing the appeal. The tribunal highlighted that the judgments cited by the Revenue did not address such blatant violations of Regulation 22, further supporting its decision to overturn the revocation of the license and forfeiture of the security deposit.