2018 (12) TMI 393 - AT - Customs

Revocation of CHA License - it was alleged that Sh. Jaikishan B. Kotak (son of the Prop. of appellant firm) Bipin Pragi Kotak (husband of the prop. of the appellant custom broker) and Sh. Dinesh Ojha an employee of the appellant firm have actively participated in conspiring and organizing the smuggling - invocation of regulation 17(1) 17(9) 11(e) and 11(i) of Custom Broker License Regulation 2013. Held that - A perusal of regulation 17(1) shows that a custom broker is required to verify the antecedents of the employees before hiring by identifying the antecedents and identity at the declared address by using reliable independent authentic documents data or information. It is seen that the charge made in the proceedings does not clearly bring out as to how the custom broker has failed in this regard - Any action by any employee in a personal capacity not in transaction of business of the custom broker cannot be held against the custom broker. Similar Regulation 11(e) is in respect of the transactions between the custom broker and his client. In the instant case the importer was not client of the Custom Broker and hence no charge under Regulation 11(e) can be substantiated. The charge under Regulation 11(i) relates to Customs Broker attempting to influence the officials of the Custom Station in any matter. In the instant case there is no charge that the custom broker tried to influence the officials of the Customs Stations. The charge if any of influencing the officer is against Shri Jaikishan B. Kotak (son of the Prop. of appellant firm) and Shri Bipin Pragi Kotak (husband of the prop. of the appellant custom broker) of the Custom Broker and the Employee Shri Dinesh Ojha. Since there is no charge against the custom broker of attempting to influence the Customer Officer the charge under Regulation 11(i) cannot be upheld. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Revocation of custom broker license based on alleged involvement in smuggling activity, applicability of regulations regarding employment of persons by a custom broker, lack of specific charges against the custom broker, delay in proceedings, reliance on previous judgments.

Analysis:
The appeal was filed by a custom broker against the revocation of their license due to alleged involvement in smuggling activity. The case involved a smuggling incident at JNCH Nhava Sheva Port, where individuals associated with the appellant firm were implicated in organizing the smuggling. Statements of various individuals, including the son and husband of the appellant firm's proprietor, were recorded, suggesting their active participation in the smuggling operation. The appellant argued that these individuals acted in their personal capacities and that the firm was not directly involved in the import, therefore should not be held responsible.

The proceedings against the appellant were initiated, leading to the suspension and eventual revocation of their license. The appellant contended that no specific charges were brought against them, and highlighted delays in the proceedings. The appellant also pointed out that a similar case involving another custom broker had the charges set aside by the Tribunal, implying inconsistency in the treatment of similar cases.

The Tribunal analyzed the regulations governing the employment of persons by a custom broker, emphasizing the need for verification of employees' antecedents and supervision to ensure proper conduct. The Tribunal noted that the charges against the custom broker did not clearly establish a failure in these aspects. Additionally, the regulations regarding the obligations of a custom broker were examined, with the Tribunal concluding that the charges could not be substantiated as the importer was not a client of the custom broker, and there was no evidence of attempts to influence customs officials.

Ultimately, the Tribunal found no merit in the impugned order and set it aside, highlighting the distinctions in the facts of previous judgments cited by the respondent's counsel. The judgment was pronounced on 05.12.2018, ruling in favor of the appellant custom broker.