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TMI Blog2022 (9) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the reason that on the ground the respondent was exonerated from penalty in the proceeding under Section 124 of the Customs Act, 1962, the Tribunal set aside the order revoking their license? (ii) Whether the Tribunal ought to have done so when the charge against the agent was serious i.e. not advising the customs properly under the regulations with regard to the mis-declaration of the description of the goods by the exporter? 2. The respondent was granted Customs House Agents License during 1997 under the erstwhile Customs House Agents Licensing Regulations, 1984 to transact customs clearance work within the jurisdiction of Kolkata Customs Commissionerate. The respondent came to adverse notice of the Department pursuant to an investigation done by the Directorate of Revenue Intelligence, Kolkata Zonal Unit (DRI), who had received information that Red Sanders wood which is a prohibited item, is attempted to be illegally exported under the guise of ductile iron casting from an exporter of Burdwan through Haldia Port. This investigation culminated in issuance of show-cause notice under Section 124 of the Act dated 25.02.2010. The respondent was the 5th noticee in the said no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, the respondent contended that the Department has not produced any evidence that the respondent had knowledge that the containers contained Red Sanders wood. Further, it was contended that in order to invoke penalty proceedings against the respondent, the onus is on the Department to prove that the CHA had knowledge about the contents of the containers or they have associated with the exporter to export prohibited goods out of the country. Thus, all the allegations are mere surmises and conjectures on the part of the investigation agency and no penalty can be imposed on assumptions, presumptions and suspicion. Reliance was placed on the decision of the Hon'ble Supreme Court in Hindustan Steel Ltd. Versus State of Orissa 1978 (2) ELT 159 (SC). Further, it was stated that in the show-cause notice a request has been made to the competent authority under the CHALR to take action against the respondent and this direction is arbitrary exhibiting bias against the respondent. Further, it was submitted that first and foremost what is required to be seen is whether there was any intentional contravention of the provisions of the CHALR and even before adjudicating the case, such recom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use Agent and produce such authorization whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs. Sub-Regulation (d) states that a Customs House Agent shall advise his client to comply with the provisions of the Act and in case of non-compliance shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs. The admitted fact is that the export order was not received by the respondent from the exporter but they had secured the order through another CHA and it is that agency which had entrusted the documents for the purpose of preparation of shipping bills and other export documents after the goods were loaded in the containers, sealed and brought to the docks. The consistent case of the respondent is that they had no knowledge of the cargo which was stuffed in the containers and the containers had the seal affixed by the Central Excise Department intact and having received the documents from M/s. Linker India, export documents were prepared by the respondent. In the light of the said factual position, the respondent while responding to the show-cause notice dated 25.02.2010 issued by the DRI, spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26) ELT 548 (Bom.); the decision of the Hon'ble Supreme Court in Commissioner of Customs (General) Versus K.M. Ganatra and Company 2016 (332) ELT 15 (SC) ; Transport Logistics Versus CESTAT, Chennai 2016 (338) ELT 380 (Mad.), Commissioner of Customs (General) Versus Alankar Shipping & Clearing P. Ltd. 2019 (367) ELT 553 (Bom.) and Exim Cargo Services Versus Commissioner of Customs (General) 2019 (368) ELT 1024 (Del.). 7. In Welcome Air Express Pvt. Ltd. the appeal filed by the Customs House Agent was dismissed affirming the order passed by the learned Tribunal upholding the revocation of license. In M/s. Marico Logistics Pvt. Ltd. the order passed by the learned Tribunal setting aside the revocation of license was reversed and the order passed by the competent authority revoking the license was restored. These decisions have been pressed into service by Mr. Maiti to support his argument that the doctrine of proportionality was considered in those cases and the Court had upheld the stand taken by the Department and confirmed the order of revocation. It is no doubt true that in both the decisions, the Court considered the doctrine of proportionality, however such consideration was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances more particularly, when the respondent stood completely exonerated in the proceedings initiated under Section 124 of the Act. 9. The power of the learned Tribunal to vary, confirm or modify the order passed by the competent authority is beyond doubt. In K.M. Ganatra & Co. the Hon'ble Supreme Court pointed out that the Tribunal has jurisdiction to confirm, modify or annul the decision and while exercising its jurisdiction, has to exercise it in accordance with law having regard to the factual matrix of the case. The Tribunal having been conferred the power to modify the order restricting the period of revocation will definitely come within the sweep of the said power. In Sainath Clearing Agency it was held that the authority issuing the license had certain amount of discretion in the matters of revocation of licenses and while imposing penalty. It was pointed out that the orders should not be lightly interfered with, however, that does not mean that once the orders of the authorities like Commissioner are capable of being challenged in further, then the Appellate Tribunal's powers are in any way restricted or circumscribed. Further, it was held that in order to render substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with law, in terms of the license granted to him under the CHALR, 2004. The respondent has bound himself by executing a bond and furnishing security to scrupulously abide by the terms and conditions of the license. Therefore, even if the respondent has been fully exonerated in the proceedings initiated under Section 124 of the Act, yet the competent authority under CHALR is entitled to examine the case of the respondent qua the requirement under the regulations. It is an admitted fact that the respondent did not obtain the authorization from the exporter but they are stated to have received the job order from another CHA whose license had been suspended. If such is the case, it tantamounts to a clear violation of Regulation 13(a) of the Act. In Noble Agency Versus Commissioner of Customs 2002 (142) ELT 84 (Tri-Mumbai), the learned Tribunal had explained the important position played by a Customs House Agent in the Customs House in the following terms: "The CHA occupies a very important position in the Customs House. The Customs procedures are complicated. The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le acting as Custom House Agent, he should not be a cause for violation of those provisions. A CHA cannot be permitted to misuse his position as a CHA by taking advantage of his access to the Department. The grant of license to a person to act as Custom House Agent is to some extent to assist the Department with the various procedures such as scrutinizing the various documents to be presented in the course of transaction of business for entry and exit conveyance or the import of export of the goods. In such circumstances, great confidence is reposed in a Custom House Agent. Any misuse of such position by the Custom House Agent will have far reaching consequences in the transaction of business by the Custom House officials." 12. Thus, if the conduct of the respondent is viewed bearing in mind the above legal principles, it no doubt shows that the respondent had violated the conditions of license. The respondent having received the export order from a third party is also to be held guilty for not being able to advise his client to comply with the provisions of the Act as the respondent did not know who his client was and it is through a third party they had received the job order. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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