2016 (12) TMI 962 - AT - Customs

Revocation of CHA licence - forfeiture of security deposit - Regulation 18 of the Customs Broker Licensing Regulation 2013 (CBLR 2013) - the containers found to be carrying red sanders wood export of which is prohibited - Held that - It is observed that the said revocation has been made for violating the provisions of Regulation 11 (a) 11 (d) and 11 (n) of CBLR 2013. As per the provisions of Regulation 11 (a) of CBLR 2013 every CHA shall obtain an authorisation from each of his clients whom he is being employed and produce such authorisation before the officers of Customs. It has been categorically observed by the adjudicating authority that no authorisation was produced or obtained by the appellant. Even during the proceedings before this Bench also no such authorisation from the exporter M/s. Bhadrakalj Exporters Pvt. Ltd. Nepal was produced. Further as per Regulation 11 (n) CHA is required to advise his client to comply with the provisions of Customs Act which will include transit routes required to be followed by the client. Ld. Advocate during the course of hearing submitted that the said CTD transit declaration was received by the appellant on 3/4/2014 and interception was done on 7/4/2014. Once the appellant came to know of CTD transit declaration on 3/4/2014 then it was his responsibility and duty to guide the driver of the truck/Nepal exporter to follow the routes specified and if the route is not followed then the same was required to be brought to the notice of officers of Customs as per Regulation 11 (d) of the CBLR 2013. Due to non verification of the antecedents of the Nepal exporters substitution with the prohibited Red Sanders Wood became possible in the container - In view of the above observations we do not find anything wrong revoking CHA licence of the appellant. Reliance placed in the case of M/S. Shubham Enterprises Vs. C.C. (Airport & Admn. Kolkata) 2015 (12) TMI 587 - CESTAT KOLKATA where similar issue was upheld. However revocation period was restricted upto a certain date on the grounds that appellant had no knowledge of the contraband nature of the goods substituted in the containers - In the present proceeding also we do not find any evidence on record with regard to the fact that appellant had knowledge of substitution of declared goods with Red Sanders Wood . Also the appellant is out of job from the date of suspension of his CHA licence. Accordingly we hold that revocation of appellant s CHA licence shall be effective upto 31/3/2017 and thereafter CHA licence of the appellant and forfeiture of security deposit ordered by the adjudicating authority will be restored. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
Revocation of CHA license under Customs Broker Licensing Regulation 2013 - Violation of Regulation 11 (a), 11 (d), and 11 (n) of CBLR 2013.

Analysis:
The appellant filed an appeal against the Order-in-Original revoking their CHA license and forfeiting the security deposit. The adjudicating authority based the revocation on the violation of Regulation 11 (a), 11 (d), and 11 (n) of CBLR 2013. The appellant's CHA license was suspended after an investigation revealed that a container declared as "Nepalese Handicrafts" actually contained prohibited Red Sanders wood. The appellant argued that they had no knowledge of the substitution and should not be held responsible. The Revenue contended that the appellant failed to verify the exporter's antecedents and did not follow the specified transit route, leading to the substitution. The Revenue emphasized the CHA's duty to obtain authorization from the client and guide them on customs procedures.

The main issue was whether the revocation of the CHA license was justified. The adjudicating authority found that the appellant violated Regulation 11 (a), 11 (d), and 11 (n) of CBLR 2013 by not obtaining authorization from the exporter and failing to ensure compliance with transit routes. The appellant's argument that they were unaware of the substitution was considered. However, it was noted that the appellant received the CTD transit declaration and should have verified the client's details and guided them on the specified route. Due to the lack of verification, the substitution with Red Sanders wood occurred. The Bench upheld the revocation of the CHA license based on these observations.

In a similar case, the Bench had previously upheld an order while restricting the revocation period due to lack of knowledge about the contraband. Similarly, in the present case, no evidence showed that the appellant knew about the substitution. Considering this, the revocation of the CHA license was deemed effective until a specified date, after which the license and the forfeited security deposit would be restored. The appeal was allowed based on these findings.