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TMI Blog2024 (12) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... observations of the Ld. Principal Commissioner that it is the duty of the License holder to provide all the infrastructure required in the warehouse. However, there are merit in the submission of the appellant that the delay in installing the audit trial was caused mainly due to COVID pandemic and the circumstances which were beyond their control. There is no finding contrary to this in the impugned order. Accordingly, the delay in inclusion of an audit trail in the computerized system does not amount to violation of the provisions of the Regulations warranting cancellation of the licence. It is observed that the revocation of the Licence without giving any opportunity to the Appellant to install the audit trail in the system, is legally not tenable. In these circumstances, the revocation of licence on account of this alleged violation is not proper. Theft in the warehouse - HELD THAT:- It is observed that an FIR had been filed and the Appellant has already paid the duty involved in respect of the stolen goods. The finding of the Ld. Principal Commissioner agreed upon that adequate security measures are essential for operation of the warehouse. However, it is observed that one iso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 58B(1) of the Customs Act, 1962, for alleged contravention of the provisions of the Act and the said Regulations as specified and imposed a penalty of Rs. 1,00,000/- upon the appellant under Section 117 of the Act read with Regulation 12 of the said Regulations. Aggrieved against the cancellation of the Warehousing License issued to them, the appellant has filed this appeal praying for setting aside the impugned order. 2. Brief facts of the case are that the Appellant was issued a Warehousing License under Section 57 of the Customs Act, 1962, by the Commissioner of Customs (Preventive), Patna, which was communicated to the appellant by letter dated June 10, 2019. The said License was issued allowing the appellant to operate a public bonded warehouse for storage of refractory items, casting powers, machinery spares, ferro alloys and metals, rolls, etc. of Tata Group companies only at Jamshedpur, in accordance with The Warehouse (Custody and Handling of Goods) Regulations, 2016 (hereinafter referred to as the said Regulations ). 3. After granting of the licence in June, 2019, the appellant started operation of the said warehouse from June, 2020. This was the peak period of the CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inserted mandatorily in such computer system. The Appellant submits that all records in relation to the warehouse licence were maintained in terms of Regulation 11 ibid. 6.1. The Appellant further points out that none of the conditions of the licence, Regulation 4 or Regulation 11 of the said Regulations requires the computer system to incorporate the feature of an audit trail; non-inclusion of an audit trail in the computerized system does not amount to violation or contravention of any of the said Regulations as well as the condition of issue of the licence. 6.2. The Appellant contends that the Public Warehouse Licensing Regulations, 2016 does not empower the Board to issue any Circular to regularize the functioning of the warehouses; the said Circular No. 25/2016-Cus. dated 08th June, 2016 was issued mainly for administrative and procedural purposes. The impugned order has cited the said Circular to allege contravention of the provisions of the said Regulations on account of non-provision of audit trail in the computerized system. Accordingly, the Appellant contends that the Show Cause Notice has traversed beyond the statutory provisions under which the License was issued. 6.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every infraction cannot lead to revocation of licence; such a severe exercise of revocation of licence will lead to serious consequences not only for the Appellant, but also for the employees who have been engaged in the warehouse and their families. 6.6. In view of the above, the Appellant prays for setting aside the impugned order cancelling their license. 7. On the other hand, the Ld. Authorized Representative of the Revenue reiterates the findings in the impugned order. He contends that the Appellant has not installed the audit trail in the computerized system as required under the Public Warehouse Licensing Regulations, 2016; it is mandatory on the part of the License holder to provide all basic infrastructure for running the warehouse; since the Appellant failed to provide the basic infrastructure, the ld. adjudicating authority has rightly revoked their licence in the instant case. Accordingly, he prays for upholding the impugned order. 8. Heard both sides and perused the appeal records. 9. We find that the Appellant has been issued a warehousing licence under Section 57 of the Customs Act, 1962 vide letter dated 10th June, 2019. The Appellant started operation of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that an FIR had been filed and the Appellant has already paid the duty involved in respect of the stolen goods. We agree with the finding of the Ld. Principal Commissioner that adequate security measures are essential for operation of the warehouse. However, we observe that one isolated incident of theft cannot be a reason to come to the conclusion that the security measures in the warehouse were not adequate. The Department can advise the License-holder to increase the security and to provide adequate staff for security and maintenance of the warehouse. 9.3. We also find that the Ld. Principal Commissioner has given a finding that the warehouse keeper appointed by them did not have any prior experience in warehousing operations and accordingly there was violation of Regulation 3(1) of the said Regulations. In this regard, we find merit in the submission of the appellant that they were operating with minimum staff during COVID pandemic and the operations in the warehouse were very few; the officers have no occasion to assess the experience of the warehouse keeper appointed by them. We observe that the ld. adjudicating authority has not brought in any evidence in the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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