2017 (5) TMI 933 - AT - Customs

Forfeiture of CHA Licence - violation of time limit - non-imposition of revocation on M/s. Entire Logistics - Since the Customs offence was the same, Revenue has argued that M/s. Entire Logistics should also be penalized with forfeiture of CHA Licence - Held that - four CHAs were involved in commission of customs offence. Disciplinary proceedings were taken up by the ld. Commissioner against all the four CHAs. Even though there is a common enquiry report against all the four CHAs, however, the alleged contraventions which are the basis for disciplinary action against each CHA, are distinct and separate. These charges have been confirmed against each CHA keeping in view the role played by them in commission of the alleged customs offence. Further, since the CHA licence for each CHA is distinct and separate, we do not see any infirmity in deciding the appeal filed by M/s. Entire Logistics without reference to the appeals, if any, filed by the other CHAs. There has been significant delay beyond the permissible limits between the dates of receipt of offence report and date of issue of show cause notice. Likewise, there has been inordinate delay in preparation and submission of enquiry report. From the records, it is seen that delay is on account of change of enquiry officer more than once and thereby, the time limit prescribed under CHA Regulations have been badly violated - the order of the lower authority forfeiting the security deposit is set-aside and the appeal is allowed - appeal allowed - decided in favor of assessee.

Summary

Issues:
1. Challenge to forfeiture of security deposit of CHA.
2. Allegation of non-adherence to time-limits in disciplinary proceedings under CHALR.
3. Doctrine of severance in deciding appeals of multiple CHAs involved in customs offence.

Detailed Analysis:
1. The appeals were filed challenging the forfeiture of a security deposit of &8377; 50,000 pertaining to a Customs House Agent (CHA). The Revenue argued that other CHAs had their licenses revoked for a similar customs offence, questioning why M/s. Entire Logistics Pvt. Limited only faced forfeiture. The Tribunal noted that while there was a common enquiry report against all four CHAs involved, the contraventions leading to disciplinary action were distinct for each CHA. As the CHA licenses were separate, the appeal of M/s. Entire Logistics could be decided independently without reference to other CHAs.

2. The main challenge in the appeal was the alleged non-adherence to time-limits set by the CHA Regulations for disciplinary proceedings. The Regulations prescribed specific timeframes for issuing show cause notices, submitting enquiry reports, and passing orders. The Tribunal observed significant delays in the process, attributing them to changes in the enquiry officer, which resulted in violations of the prescribed time-limits. Citing precedents, including decisions by the Hon'ble Madras High Court, the Tribunal emphasized the importance of adhering to the specified time-limits in disciplinary proceedings under CHA Regulations.

3. Regarding the doctrine of severance, the Tribunal reiterated that despite a common enquiry report, the disciplinary actions against each CHA were based on distinct contraventions. Therefore, the appeals of the CHAs could be decided separately without needing to consider the appeals of other CHAs involved in the customs offence. Ultimately, the Tribunal set aside the order forfeiting the security deposit and allowed the appeal by M/s. Entire Logistics, while rejecting the appeal filed by the Revenue.