2016 (3) TMI 254 - AT - Customs

Contravention of provisions of Regulation 13(e) and 13(o) of CHA Licensing Regulation, 2004. - Impart of wrong information - Held that there was no question of the appellant being in a position to impart any wrong information to the client as the same was found non-existent. Also the weight of the container for which it filed bill of entry was in excess by 7.280 tonnes over the declared weight (5.051 tonnes) which should have come to the appellant s notice at the time of due diligence exercised. Therefore, allegation of violation of Regulation 13(e) ibid sustained. The appellant was required to inter alia verify present and permanent address in full, complete and correct which the appellant did not do. The Custom House Agent is obligated to inter alia verify antecedent, correctness of Importer Exporter Code, identity of the importer and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information but the appellant has not even claimed that it had ever verified the existence of the importer at the given address which means the appellant has failed to fulfil the requirement of Regulation 13(o) ibid. Violation of Regulation 22 of CHALR, 2004 - Held that the appellant had not taken the point of time bar before the High Court and therefore by the doctrine of constructive res judicata is prevented from raising this point in respect of the current proceedings which are in compliance of the direction of the Hon ble High Court. Therefore, the appellant has not violated the time limit prescribed in Regulation 22 ibid.- Decided against the appellant

Summary

Issues:
- Appeal against revocation of CHA license and forfeiture of security deposit
- Violation of CHA Licensing Regulations 2004
- Contention regarding time limits prescribed in Regulation 22 of CHALR, 2004
- Allegations of contravention of Regulations 13(e) and 13(o) of CHALR, 2004
- Due diligence requirement of a custom broker
- Compliance with KYC norms and address verification
- Trust in documents filed by CHA
- Applicability of proportionality doctrine in revocation of license

Analysis:
1. Violation of CHA Licensing Regulations:
The judgment revolves around the revocation of a CHA license and forfeiture of the security deposit due to violations of CHA Licensing Regulations 2004. The appellant was found to have dealt with a non-existent importer, failing to exercise due diligence in verifying information and addressing discrepancies in cargo declarations.

2. Contention on Time Limits and Contravention of Regulations:
The appellant argued that the prescribed time limits in Regulation 22 were violated, citing precedents. However, the High Court directed completion of proceedings within a specified timeline, precluding the appellant from raising the time bar issue. Allegations of contraventions of Regulations 13(e) and 13(o) were also addressed.

3. Due Diligence and KYC Compliance:
The judgment highlighted the importance of due diligence for CHAs, emphasizing the need for proper address verification and compliance with KYC norms. The appellant's failure to fulfill these requirements was a significant factor in the revocation of the license.

4. Trust in Documents and Proportionality Doctrine:
The trust placed in documents filed by CHAs was breached in this case, leading to serious consequences. The judgment discussed the application of the proportionality doctrine in revoking a CHA license, citing relevant precedents to support the decision.

5. Final Decision and Dismissal of Appeal:
Ultimately, the Tribunal found the impugned order to be valid, dismissing the appeal and disposing of the stay application. The judgment emphasized the seriousness of the violations and the need for strict adherence to regulations in the customs clearance process.

By thoroughly analyzing each issue raised in the judgment, the Tribunal's decision to uphold the revocation of the CHA license and forfeiture of the security deposit is justified based on the violations of CHA Licensing Regulations and the failure to meet due diligence and KYC requirements.