2016 (4) TMI 787 - HC - Customs

Revocation of CHA licence and forfeiture of security deposit - Misdeclaration of goods - Consignment of Red Sanders logs seized - Signed blank custom documents were handed over to M/s.Aruthura Logistics, which were used for clearance of exported goods - Petitioner contended that goods were stuffed in the containers in the presence of the Customs Officials, so substitution of the goods and for tampering of the custom seal of the container, cannot be fastened on the Custom House Agent. Held that - even though the appellant herein is guilty of handing over blank signed forms to third parties, that would not attract the punishment of cancellation of licence, since no other grave charges could be fastened on the appellant, as there was no role played by him either in the substitution of goods or tampering with custom seal, as it happened outside the custom yard after the sealing was made by the Custom Officials. The custom house licence agent cannot be held liable as the alleged offence took place after his role was over namely, dealing of the container. Once the role of the CHA licence came to over, he cannot be responsible for subsequent events. In any event, for giving signed blank forms to third parties, the revocation of licence is harsh penalty and the punishment should commensurate for guilty of offence. Therefore, the order of the Commissioner of Customs revoking the CHA licence as confirmed by the CESTAT is set aside. This Court is only restoring the CHA licence. Where forfeiture of the security deposit is concerned, there is a violation of CHA regulation by the appellant, therefore interest of justice would be met by restoring the CHA licence and confirming the order of forfeiture of security deposit. Imposition of penalty - Held that - a perusal of the order passed by the Collector, Custom Commissioner as well as the order impugned herein would reveal no connivance on the part of the appellant either in mis-declaration or substitution of the goods by tampering with the Custom seal. Therefore, the extreme penalty of cancellation of CHA licence is not warranted in this case. - Decided partly in favour of appellant

Summary

Issues:
Dismissal of appeal against cancellation of CHA licence and penalty imposition.

Analysis:
The appellant, a Custom Broker Licence holder, had his CHA licence suspended due to mis-declaration of goods and the presence of prohibited items in a consignment seized during a raid by DRI officials. The Commissioner of Customs revoked the appellant's licence and forfeited the security deposit after conducting an enquiry. The CESTAT confirmed this decision, leading to the current appeal.

The questions of law framed during admission focused on the Tribunal's justification for confirming the extreme penalty imposed on the appellant and its failure to consider a relevant decision of the Delhi High Court. The Court examined the circumstances of the case, emphasizing that the CHA's role ends once goods are sealed by Customs officials, making any subsequent tampering or substitution the responsibility of others involved in transport. The appellant's compliance with CHA regulations and lack of connivance in mis-declaration or substitution were highlighted.

Reference was made to the Delhi High Court's decision in a similar case, emphasizing that punishment should be proportional to the violation's gravity. The Court noted that while the appellant handed over signed blank forms to third parties, this action alone did not warrant licence cancellation, especially since the appellant was not involved in the subsequent tampering with the goods.

Additionally, the judgment of the Calcutta High Court was cited to support the view that without collusion or connivance, a CHA cannot be penalized for violations. The Court concluded that revocation of the CHA licence was a harsh penalty for the appellant's actions, especially considering the period of inactivity following the suspension.

Ultimately, the Court set aside the order revoking the CHA licence, citing the appellant's three-year period of inactivity as sufficient punishment. The CHA licence was to be restored with a specific timeline for the appellant to make a security deposit. The order confirmed the forfeiture of the security deposit due to a violation of CHA regulations by the appellant.