2017 (3) TMI 1494 - DELHI HIGH COURT

Revocation of CHA licence - forfeiture of security deposit - penalty - it was alleged that there was a deliberate mis-declaration apropos the quality, quantity, value and weight of the consignments with the intention to defraud the government and illegitimately claim the benefit of duty-drawback - Held that: - Any act to defraud presupposes the intention to obtain something fraudulently - In the present case there is no evidence of active facilitation of clearance of the consignment through customs by the appellant, hence, no mens rea can be inferred to defraud the government for obtaining duty drawback through a fraudulent transaction. Consequently, the appellant cannot be faulted or punished in the manner it has been.

The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect to clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the customs house area. What is noteworthy is that the IE Code of the exporter M/s H.M. Impex was mentioned in the shipping bills, this itself reflects that before the grant of said IE Code, the background check of the said importer/ exporter had been undertaken by the customs authorities, therefore, there was no doubt about the identity of the said exporter. It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE Code given to it by a client for each import/ export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e. KYC etc. would have been done by the customs authorities. There is nothing on record to show that the appellant had knowledge that the goods mentioned in the shipping bills did not reflect the truth of the consignment sought to be exported. In the absence of such knowledge, there cannot be any mens rea attributed to the appellant or its proprietor.

The revocation of the appellant’s CHA license is unjustified and is accordingly, set aside - the forfeiture of the security amount and the imposed penalty of ₹ 1 lakh also is set aside - appeal allowed - decided in favor of appellant-CHA.