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TMI Blog2014 (3) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... te penalty. Neither extreme is to be encouraged. In view of the absence of any mens rea, the violation concerns the provision of G cards to two individuals and that alone. A penalty of revocation of license for this contravention of the CHA Regulations unjustly restricts the appellant’s ability to engage in the business of the CHA for his entire lifetime. The minority Opinion of the CESTAT, delivered by the Judicial Member, correctly appreciates the balance of relevant factors, i.e. knowledge/mens rea, gravity of the infraction, the stringency of the penalty of revocation, the fact that the appellant has already been unable to work his license for a period of 6 years (now 8 years), and accordingly sets aside the order of the Commissioner dated 24.01.2005 - The Minority Opinion of the Judicial Member, Ms. Archana Wadhwa, restored, - Decided in favour of appellant. - CUS.AA.24/2012, C.M. APPL. 19694/2012 - - - Dated:- 14-3-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. For the Appellant : Sh. C. Hari Shankar and Sh. S. Sunil, Advocates. For the Respondent : Sh. Kamal Nijhawan, Sr. Standing Counsel with Sh. Dinesh Patel, Advocate. ORDER Mr. Justice S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent revocation of his licence is too harsh a punishment to be awarded to him. The revocation of licence has the effect of taking away the means of livelihood of that person for the rest of his livelihood. The same effects not only the person concerned but his family as also the staff, workers of CHA. Keeping in view that the appellant was not directly connected with the illegal export and did not have the knowledge of mis-use of G cards, we think it fit to hold that suspension and revocation of his licence for the last 6 years is sufficient and adequate punishment for the contravention committed by him. XXXXXX XXXXXX XXXXXX 4. The Technical Member, Sh. Mathew John, further differed from this approach and was of the opinion that a CHA operated on the basis of trust. He acts as an agent of the Customs House as well as of the exporter and importer. Being so placed, the CHA or its employees would have access to sensitive information that can be potentially misused for smuggling. The Technical Member was of the opinion that the appellant virtually rented out the CHA license to V.K. s employees and facilitated their access to the places which afforded them the opportunity to indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese cases, the CHA s role as one holding a position of trust was underlined and the penalty of revocation was uniformly upheld. It was contended that having regard to the well-established principle that it is the administrative authority which is charged with considering the question of proportionality, the Court should substitute that decision only in rare circumstances. For this, learned counsel relied upon the judgment reported as Deputy Commissioner Kendriya Vidyalaya Sangthan and Ors. v. J. Hussain, 2013 (10) SCC 106. Further, relying on Clause 8 of the Custom House Agents Licensing Regulations, 2004 ( CHA Regulations ), learned counsel emphasized that the grant of a CHA license involves a rigorous process of interviews and evaluation, and that the authority placed upon the shoulders of a CHA are substantial. Given this, any infraction, especially as regards the illegal export of narcotics, should not be viewed lightly. 6. The conduct of a CHA is regulated by the CHA Regulations. Clause 13 records the obligations of a CHA, for which Clause 19 permits the CHA to employ persons to provide assistance. However, Clause 19(8) states that the CHA shall exercise supervision as ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be proportional to the violation. Given the civil consequences of revocation for the CHA, read in the background of its freedom under Article 19(1)(g), this principle of law is undisputed. Casting some clarity on the meaning of proportionality, especially at the second appellate stage, the Supreme Court in Management of Coimbatore District Central Co-operative Bank v. Secretary, Coimbatore District Central Co-operative Bank Employees Association and Anr., (2007) 4 SCC 669, held as under: 18. 'Proportionality' is a principle where the Court is concerned with the process, method or manner in which the decision-maker has ordered his priorities, reached a conclusion or arrived at a decision. The very essence of decision-making consists in the attribution of relative importance to the factors and considerations in the case. The doctrine of proportionality thus steps in focus true nature of exercise the elaboration of a rule of permissible priorities. In the context of revocation of a CHA license, this ordering or priorities, or the proportionality doctrine, was considered recently by the Andhra Pradesh High Court in Commissioner of Customs and Central Excise v. HB Carg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishment to be proportional to the violation, revocation of the license under Rule 20(1) can only be justified in the presence of aggravating factors that allow the infraction to be labeled grave. It would be inadvisable, even if possible, to provide an exhaustive list of such aggravating factors, but a review of case law throws some light on this aspect. In cases where revocation of license has been upheld (i.e. the cases relied upon by the Revenue), there has been an element of active facilitation of the infraction, i.e. a finding of mens rea, or a gross and flagrant violation of the CHA Regulations. In Sri Kamakshi Agency (supra), the licensee stopped working the license, but rather, for remuneration, permitted his Power of Attorney to work the license, thus in effect transferring the license for money. As the CESTAT noted, 9 ..[a]pplicant instead of discharging his functions as a Custom House Agent in accordance with the Regulations, in flagrant violation of those Regulations went to the extent of encashing the facilities made available to him as a CHA by selling it for a price . Moreover, the Power of Attorney was as a matter of fact actively involved in the frau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of priorities, or an appreciation of the aggravating (or mitigating) circumstances. In this case, the Commissioner and the CESTAT (majority) hold that there is no finding nor any allegation to the effect that the appellant was aware of the misuse if the said G cards , but do not give adequate, if any weight, to this crucial factor. There is no finding of any mala fide on the part of the appellant, such that the trust operating between a CHA and the Customs Authorities (as a matter of law, and of fact) can be said to have been violated, or be irretrievably lost for the future operation of the license. In effect, thus, the proportionality doctrine has escaped the analysis. 12. Learned Senior Standing Counsel for the Customs has stressed that the infraction in this case is not a routine matter, but rather, illegal smuggling of narcotics by the G card users. However, given the factual finding that the CHA was not aware of the misuse of the G cards (and thus, also unaware of the contents being smuggled), no additional blame can be heaped upon the CHA on that count alone. Rather, the only proved infraction on record is of the issuance of G cards to non-employees, as opposed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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