2008 (5) TMI 52 - AT - Customs

Attempt of smuggling no finding that CHA was involved in smuggling or abetting - Commissioner of Customs suspending the CHA licence under regulation 20(2) of the Customs House Agents Licensing Regulations 2004 with immediate effect - suspension of the licence in terms of Regulations 20(2) was not justified - delay of six months in ordering suspension of licence under Reg. 20(2) with immediate effect was sufficient ground to vacate the order of suspension

Summary

Issues:
1. Suspension of Customs House Agent's license under Regulation 20(2) of CHALR 04.
2. Violations of Regulation 13 by the Customs House Agent.
3. Justification of suspension under Regulation 20(2) based on the involvement in illegal activities.
4. Comparison of arguments presented by both sides regarding the suspension order.
5. Application of legal precedents in similar cases to support the appeal.

Analysis:

Issue 1:
The appeal concerns the suspension of a Customs House Agent's license under Regulation 20(2) of the Customs House Agents Licensing Regulations, 2004 (CHALR 04). The Commissioner suspended the license of M/s. Sandeep & Co. due to alleged failures to fulfill obligations under Regulation 13 of CHALR 04.

Issue 2:
Violations of various sub-clauses of Regulation 13 were found against the Customs House Agent without specific/proven basis. The charges included failure to advise the client on legal requirements and failure to promptly inform Customs authorities of client non-compliance.

Issue 3:
The justification for suspension under Regulation 20(2) requires that the Customs House Agent's continued functioning would jeopardize an enquiry or involve activities endangering revenue. However, the delayed suspension in this case, not immediately following the illegal transaction, raises questions about the necessity and application of mind by the Commissioner.

Issue 4:
The appellant argued that the suspension was unjustified as they were not involved in the attempted illegal export of red sanders. The delay in suspension and lack of evidence linking Sandeep to the illegal activities supported the appeal to set aside the suspension order.

Issue 5:
Legal precedents cited by the appellant highlighted cases where delays in ordering suspension were deemed sufficient grounds to vacate such orders. The Tribunal and High Courts emphasized the necessity of immediate action and the application of mind before suspending a license, criteria not met in the present case.

In conclusion, the Tribunal found that the suspension of the license was not justified, as there was no evidence of Sandeep's involvement in illegal activities. The delayed suspension and lack of immediate action after the illegal transaction cast doubt on the validity of the Commissioner's decision. The appeal by M/s. Sandeep & Co. was allowed, and the suspension order was set aside based on the analysis of the legal provisions and precedents cited.