2016 (2) TMI 438 - AT - Customs

Revokation of Licenced Customs Broker Licence - one of their employees forged the document of export shipment of polished granite slabs. - It submitted that SCN was not issued within 90 days from the date of suspension as per CHALR and also submits that no specific allegation was made for any contravention in the CHALR clause against the appellant. - Held that - , it is evident that no proceedings initiated against the exporter or appellant under Customs Act as there is no violation but proceeded action under CHALR. This fact is confirmed by the adjudicating authority in the findings at para 22 of order and also expressed in clear terms that there is no involvement of the management i.e. Appellant in the act committed by the employee. In several Tribunal s decisions consistently held that the CHA cannot be held liable for the acts of employee and set aside the revocation of Licence. - impugned orders revoking the CHA licence of the appellant is unsustainable and liable to be set aside. - Decided in favor of appellant.

Summary

Issues:
Revocation of Customs Broker license under CBLR 2013 based on employee misconduct.

Analysis:
The appeal arose from the revocation of a Customs Broker's license under CBLR 2013 due to an employee's misconduct involving the forgery of export shipment documents. The appellant's license was initially suspended but later reinstated, with subsequent proceedings leading to a show cause notice for revocation. The adjudicating authority revoked the license for a limited period and forfeited the security deposit, citing failure of supervision over the employee. The appellant challenged the revocation on grounds of procedural lapses and lack of specific allegations under CHALR. The appellant emphasized their past performance and revenue contributions to the Department, citing relevant case laws to support their case.

The Revenue contended that the CHA cannot be absolved of employee misconduct, justifying the license revocation under CHALR regulation. The Tribunal examined the issue of revocation under Regulation 18 of CHALR concerning the employee's forgery. The Tribunal reviewed the suspension and subsequent revocation, noting the Commissioner's satisfaction with the appellant's bonafide and performance, as well as the absence of Customs Act violations. The Tribunal found no involvement of the management in the employee's actions and referenced previous Tribunal decisions that absolved CHAs of employee acts.

Further, the Tribunal referenced a High Court decision that emphasized proportionality in penalties, setting aside a license revocation where the CHA was unaware of misconduct beyond a specific violation. The High Court highlighted the importance of proportionate penalties and the absence of mens rea in imposing penalties. The Tribunal applied this reasoning to the present case, concluding that the revocation of the appellant's license was unjustified. By aligning with the High Court's decision and previous Tribunal rulings, the Tribunal set aside the license revocation and allowed the appeal.