2022 (4) TMI 1050 - HC - Customs

Termination of services - forfeiture of the entire amount of security deposit - Respondent submitted that no show cause notice was issued to Respondent under the CHALR calling upon Respondent to show cause why they should not be held responsible for lack of adherence to Regulation 19(8) of CHALR - HELD THAT - Mr. Deshmukh could not dispute this fact because if a show cause notice had been issued, it would have been annexed to the Appeal Memo file. Moreover, COC has not explained as to how termination of its temporary employee Mr. Vijay Dixit would amount to lack of adherence to Regulation 19(8) of CHALR by Respondent. There are no justifiable reason to interfere in the Order of Custom Excise Service Tax Appellate Tribunal. The Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then that question as pressed do not raises any substantial question of law - Appeal dismissed.

Summary

Issues:
1. Forfeiture of security deposit on termination of services of an employee.
2. Lack of adherence to Regulation 19(8) of the Custom House Agent Licence Regulations, 2004.
3. Contradiction in findings regarding contravention of regulations.
4. Show cause notice under CHALR not issued to the Respondent.
5. Justifiability of interference in the Order of the Custom Excise Service Tax Appellate Tribunal.

Analysis:
1. The main issue in this case revolves around the forfeiture of the security deposit due to the termination of services of an employee, Shri Vijay Dixit. The Commissioner of Customs found the Custom House Agent (CHA) responsible for lack of adherence to Regulation 19(8) of the Custom House Agent Licence Regulations, 2004, due to the unauthorized signing of customs documents by Shri Vijay Dixit, a temporary employee. The COC held the CHA accountable despite the termination of Dixit's services, stating that the CHA's defense of prevalent practices at the Air Cargo Complex was not acceptable.

2. The Commissioner's order highlighted the importance of proper scrutiny of documents by the CHA to ensure compliance with regulations. However, a contradiction arose in the findings as the Inquiry Officer had previously concluded that there was no contravention of specific regulations. The Respondent argued that no show cause notice was issued under the CHALR regarding the lack of adherence to Regulation 19(8), and the termination of Dixit was not adequately linked to the alleged violation.

3. The High Court, after considering the arguments, upheld the decision of the Custom Excise Service Tax Appellate Tribunal, stating that there was no justification to interfere in their order. The Court found no perversity or incorrect application of principles by the Tribunal in analyzing the facts. Consequently, the appeal was deemed devoid of merits and dismissed without costs.

In conclusion, the judgment emphasizes the importance of adherence to regulations by Custom House Agents and the need for proper oversight of employees to prevent violations. The decision underscores the significance of following legal procedures, including issuing show cause notices, and upholds the Tribunal's ruling based on a thorough analysis of the facts and applicable legal standards.