2009 (2) TMI 57 - HC - Customs

Suspension of CHA licence - Whether any violation under the Customs Act or imposition of penalty can be a ground to suspend the License without there being any violation of the provisions of Customs House Agents Licensing Regulation, 2004 Held, yes - since a CHA acts on behalf of the importer in the event of any mis-declaration, he can be penalized under the CHALR, 2004 held that suspension order can be sustained solely on the basis of the confessional statement recorded under Customs Act

Issues Involved:
1. Suspension of Custom House Agent (CHA) License under Regulation 20 of CHALR, 2004.
2. Reliance on confessional statements recorded under Section 108 of the Customs Act, 1962.
3. Delay in departmental action and its impact on the suspension order.
4. Liability of CHA for mis-declaration of goods by the importer.

Detailed Analysis:

1. Suspension of Custom House Agent (CHA) License under Regulation 20 of CHALR, 2004:
The primary issue was whether the CHA's license could be suspended for violations under the Customs Act, 1962, even if there was no direct violation of CHALR, 2004 regulations. The court held that the CHA's license could indeed be suspended for violations of the Customs Act, as the CHA is responsible for ensuring the accuracy of the declarations made in the bill of entry. The CHA's involvement in mis-declaration and forgery justified the suspension under Regulation 20(2) of CHALR, 2004, which allows for immediate suspension if necessary.

2. Reliance on Confessional Statements Recorded under Section 108 of the Customs Act, 1962:
The court examined whether the suspension order could be sustained solely based on the confessional statement recorded under Section 108 of the Customs Act. It was concluded that such statements could be relied upon, provided they were voluntary and truthful. The court referenced Supreme Court judgments, indicating that statements under Section 108 are admissible, subject to usual checks and balances to ensure they are not made under duress.

3. Delay in Departmental Action and its Impact on the Suspension Order:
The appellant contended that the delay of 4-1/2 years in taking action against the alleged violations rendered the suspension order invalid. The court found no inordinate delay, noting that the suspension order followed closely after the adjudication order dated 20.10.2006. The court emphasized that the timing of the suspension was justified based on the severity of the charges and the necessity for immediate action.

4. Liability of CHA for Mis-declaration of Goods by the Importer:
The court addressed whether the CHA could be penalized for mis-declaration of goods, even though it is primarily the importer's duty. The court held that the CHA, acting on behalf of the importer, is obligated to ensure the correctness of the entries in the bill of entry. Mis-declaration by the CHA, resulting in evasion of customs duty, constitutes misconduct under Regulation 20 of CHALR, 2004, making the CHA liable for penalties.

Conclusion:
The court upheld the Tribunal's decision to sustain the suspension of the CHA's license, emphasizing the CHA's responsibility in ensuring accurate declarations and compliance with customs regulations. The appeal was dismissed, and the court requested the Tribunal to expedite the hearing of the pending appeals to avoid further prejudice to the appellant. The Tribunal was instructed to decide the appeals without being influenced by the observations made in the present judgment.

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