2017 (11) TMI 434 - AT - Customs

Revocation of CHA license - forfeiture of security deposit - penalty - it was alleged that the appellant - Held that - the whole controversy has emanated out of a cat fight between the appellant and their ex-employee, who has admittedly made the complaint. From the submissions and facts on record, it emerges that in his statement recorded under Section 108, the complainant and ex-employee Shri V. Sivaraman, admitted that even after he had left the services of the appellant, he received compensation from them for the period 17.09.2012 to 01.02.2013 on mutual understanding, evidently to use the blank forms which were signed by him. In reply to a question No. (5) Shri Sivaraman himself accepted the usage of signed blank forms by his employer. The appellant has pointed out that they had paid compensation of ₹ 2,00,000/- by way of cheque dated 13.03.2013 to Shri V. Sivaraman. It then appears that the complaint by Shri V. Sivaraman is the resultant of a mutual understanding gone sour. While the appellant has definitely not complied with the obligation caused on him under Regulation 11 B of CBLR 2013, to transact business either personally or duly approved employee, there is no allegation that the blank bills of entry wherein the signature of the ex-employee which were improperly used, were forged by them - There is also no allegation that the goods imported through these bills of entry were found having violated any customs laws in force - the revocation of license of the customs broker for this particular infraction, in our view, is an overkill, not commensurate with the gravity of the offence and will required to be set aside - the penalty of ₹ 50,000/- imposed on the appellant would be sufficient. Appeal allowed in part.

Summary

Issues:
1. Violation of Customs Broker Licence Regulations.
2. Procedural compliance under Customs Brokers Licensing Regulations, 2013.
3. Misuse of signed documents by ex-employee.
4. Justification of penalty and revocation of license.

Issue 1: Violation of Customs Broker Licence Regulations:
The case involved M/s. Sical Logistics Limited misusing signed documents of a former employee, leading to a complaint and subsequent investigation. The Commissioner of Customs, Tuticorin, revoked the Customs Broker Licence, imposed a penalty, and ordered forfeiture of the security deposit. The appellant challenged this decision.

Analysis: The Tribunal found that the appellant violated Regulation 11 B of Customs Broker Licence Regulations (CBLR), 2013 by continuing to use signed documents of the ex-employee even after informing authorities about his resignation. While the violation warranted punitive action, the Tribunal noted that the appellant did not forge the documents, and the gravity of the offense did not merit license revocation. The penalty of ?50,000 was deemed sufficient, and the revocation of the license was set aside.

Issue 2: Procedural Compliance under Customs Brokers Licensing Regulations, 2013:
The appellant argued that procedural requirements under Regulations 20 (3) and 24 were not followed during the enquiry, rendering the proceedings void ab initio. They contended that oral evidence and cross-examination were not conducted as mandated.

Analysis: The Tribunal examined the enquiry report and found that the Asst. Commissioner had offered a personal hearing to the appellant, fulfilling the procedural requirements. The contention of lack of compliance with Regulations 20 (3) and 24 was deemed lacking merit.

Issue 3: Misuse of Signed Documents by Ex-Employee:
The appellant defended their actions by stating that the misuse of signed forms by the ex-employee did not constitute the use of forged documents. They highlighted that the ex-employee had received compensation for the use of blank forms even after leaving the organization.

Analysis: The Tribunal acknowledged the misuse of signed documents but noted that there was no evidence of forgery. The ex-employee admitted to the compensation received for the use of blank forms, indicating a mutual understanding. The Tribunal concluded that while punitive action was warranted for the violation, revoking the license was excessive, and the penalty imposed was deemed sufficient.

Issue 4: Justification of Penalty and Revocation of License:
The appellant contested the penalty and revocation of the license, arguing that the penalty was justified but revocation was disproportionate to the offense committed.

Analysis: The Tribunal agreed that the penalty was appropriate but found the revocation of the license excessive. They determined that the penalty of ?50,000 adequately addressed the offense, and therefore, the revocation of the license was set aside. The appeal was partly allowed based on these considerations.

In conclusion, the Tribunal's judgment addressed the violations of Customs Broker Licence Regulations, procedural compliance, misuse of signed documents by an ex-employee, and the justification of the penalty and revocation of the license. The decision balanced the need for punitive action with the proportionality of the penalties imposed, ultimately setting aside the license revocation and upholding the penalty of ?50,000.