2019 (12) TMI 791 - AT - Customs

Revocation of CHA License - forfeiture of security deposit - time limit for submission of enquiry report - it is alleged that the entire proceeding has been completed beyond the prescribed time limit under the CBLR - violation of provisions of Regulation 11(d), 11(e), 11(m) and 17(9) of the CBLR - penalty - HELD THAT - From the order of the Commissioner, it is found that the submissions made by the appellant were not duly considered and the penalty of revocation was imposed without considering any alternate penalty. By revocation of licence of the appellant, there is denial of livelihood of appellant along with their employees - also due to inherent contradiction among the statements recorded by the various persons, the revocation of CHA licence, which is harshest should not have been imposed by the impugned order as it would be disproportionate to the offence committed by the appellant even if it is held so. The Appellant has not been avoiding the investigation, but cooperated and also made a payment of ₹ 65.00 Lakhs to Customs so as to make good the loss to the Revenue. This in itself proves the bona fide of the appellant to sincerely attempt for the loss of revenue to be compensated. The charge against appellant is only regarding violation of Regulation 18(d) and 17(a) of CBLR. Regulation 11(d) and CBLR 13 is not established conclusively, which says Customs Broker shall advice his client to comply with provision of the act and in case of noncompliance bring the matter to the notice of Deputy Commissioner or the Assistant Commissioner of Customs as the case may be - Since the investigation was not carried out in respect of all consignments of import of old and used garments, for which weighment slips were made available it cannot be established beyond doubt that offence has been committed for all as held in the impugned order. Penalty - HELD THAT - The penalty that has been imposed against the appellant in the impugned order is disproportionate to the penalty imposed. The appellant has suffered from the date of suspension of his licence till now which in our opinion is itself sufficient considering the gravity of offence committed by the appellant - the impugned order is not sustainable and liable to be set aside - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Revocation of CHA licence under Regulation 18 of CBLR, 2013.
2. Forfeiture of security deposit under CBLR, 2013.
3. Allegations of misdeclaration of weight and evasion of customs duty.
4. Procedural violations and contradictions in the investigation.
5. Validity and timeliness of the proceedings under CBLR.

Issue-Wise Detailed Analysis:

1. Revocation of CHA Licence under Regulation 18 of CBLR, 2013:
The appellant's CHA licence was revoked by the Commissioner of Customs based on an offence report indicating misdeclaration of weight in imported consignments, leading to customs duty evasion. The investigation revealed manipulation of weight by the appellant in collusion with importers. The appellant challenged this revocation, arguing that the proceedings were completed beyond the prescribed time limit under CBLR, making the order illegal and void ab initio.

2. Forfeiture of Security Deposit under CBLR, 2013:
Along with the revocation of the licence, the Commissioner ordered the forfeiture of the security deposit furnished by the appellant. The appellant contested this, highlighting procedural lapses and inconsistencies in the investigation, arguing that the penalty was disproportionate to the alleged violations.

3. Allegations of Misdeclaration of Weight and Evasion of Customs Duty:
The investigation by DRI revealed that the appellant manipulated the weight of imported consignments, resulting in significant customs duty evasion. Statements from various individuals, including the appellant's directors and weigh bridge operators, indicated collusion and manipulation. However, the appellant argued that these statements were contradictory and lacked credible evidence to substantiate the allegations conclusively.

4. Procedural Violations and Contradictions in the Investigation:
The appellant highlighted several procedural violations and contradictions in the investigation. The statements of key individuals, including weigh bridge operators and directors, were inconsistent. The weighment slips relied upon by the department were unsigned and not all slips were produced. The appellant argued that these contradictions and procedural lapses rendered the investigation and subsequent order invalid.

5. Validity and Timeliness of the Proceedings under CBLR:
The appellant contended that the entire proceedings, from the submission of the offence report to the issuance of the impugned order, exceeded the prescribed time limits under CBLR. This delay, according to the appellant, made the order illegal and void. The appellant also argued that the extreme penalty of licence revocation was disproportionate to the alleged violations, especially considering the inherent contradictions in the investigation.

Conclusion:
The Tribunal considered the rival submissions and found that the investigation was marred by procedural lapses and contradictions. The reliance on inconsistent statements and unsigned weighment slips, along with the delay in proceedings, rendered the revocation order unsustainable. The Tribunal held that the extreme penalty of licence revocation was disproportionate to the alleged violations and set aside the impugned order, allowing the appeal. The Tribunal emphasized the need for credible evidence and adherence to procedural norms in such proceedings, referencing relevant case laws to support its decision.