TMI Blog2011 (3) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Commissioner, revoking the license of the respondent CHA, is affirmed. The appeal is, accordingly, allowed. However, in the circumstances, without costs. - 325 of 2010 - - - Dated:- 30-3-2011 - V.V.S. Rao and Ramesh Ranganathan, JJ. REPRESENTED BY : Shri Gopala Krishna Gokhale, SCC, for the Appellant. Shri C. Kodandaram, Senior Counsel, for the Respondent. [Order per : Ramesh Ranganathan, J.]. This appeal, under Section 130 of the Customs Act, 1962, is preferred against Order No. 470/2010 in Customs Appeal No. 357/2009 on the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (CESTAT) dated 17-2-2010 [2010 (261) E.L.T. 540 (Tri.-Bang.) whereby the order of the Commissioner of Customs and Central Excise, Hyderabad dated 12-12-2008, revoking the CHA licence issued to the respondent under Regulation 20 of the Custom House Agent Licensing Regulations, 2004 (CHALR), was vacated. 2. The respondent herein was authorized to transact business as a Customs House Agent (CHA) vide License No. 02/2002 with effect from 6-6-2002. The partner and authorized signatory of the CHA submitted four shipping bills, (No. 2952 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared was on the basis of ARE-I, and the instructions of the exporter; and he was not aware that the goods were misdeclared. A personal hearing was afforded to the respondent on 22-3-2006 wherein Sri C.N. Rajendra Kumar admitted being aware that, as stipulated under Regulation 13(b) of the CHALR, customs clearance should be transacted either directly or through any employee authorized by the Customs for that purpose; he had sold ten, including the subject four, blank shipping bills duly signed by him to M/s. Trans-Asia Shipping Services; during his 15 years service as a CHA this was the first time a show cause notice was issued to him; the exporter in this case had not contacted him at any time, and no authorization had been received by anybody in respect of the attempted export; and, other than Rs. 150/- per shipping bill, he had received no other financial benefit in respect of these consignments. He requested that the lapse be condoned, and a lenient view be taken. 4. In his report dated 29-3-2006 the enquiry officer held that, inspite of his being in the field for more than a decade, Sri C.N. Rajendra Kumar had signed blank shipping bills without even knowing the exporter or h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they had failed to comply with the provisions of Regulation 13 of CHALR rendering themselves unfit to continue operations as a CHA in the customs station. In exercise of his powers, under Regulation 20 of the CHALR, the Commissioner revoked the CHA licence of the respondent. He also ordered that the security furnished by the CHA, in FDR dated 23-5-2002 at the time of grant of regular CHA licence, be forfeited in terms of Regulation 20 of the CHALR. 6. Aggrieved thereby, the respondent carried the matter in appeal to the CESTAT, Bangalore in Appeal No. Customs/357/2009. In its order dated 31-2-2009 the CESTAT held that it was established that Sri C.N. Rajendra Kumar, partner of the respondent, had sold 10 signed blank shipping bills to M/s. Trans Asia Shipping for a consideration of Rs. 150/- per shipping bill; while a heavy penalty of Rs. 15.00 lakhs was imposed on the exporter under Section 114 of the Act, the Commissioner had imposed a low penalty of Rs. 25,000/- for the role of the CHA in attempting to abet illicit export; the complicity of the respondent - CHA in the fraud was not established; they had neither paid the penalty nor had they filed an appeal against the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the FOB value; while the goods sought to be exported were declared as ladies night wear , it was found to be rags and cheap clothes; the respondent, having issued blank shipping bills, cannot claim to be absolved of his role in the offence; Regulation 13 requires a CHA to obtain authorisation from each exporter who had employed him as a CHA, and produce the authorisation whenever required; it also required them to exercise due diligence; and failure of the respondent to exercise adequate caution/diligence, in signing the blank shipping bills, without even knowing the exporter of the goods, revealed carelessness and irresponsible behaviour in the discharge of functions as a CHA; they had rendered themselves unfit to continue to operate as a CHA in the customs station; while the Commissioner had rightly revoked the respondent s licence, the order of CESTAT in absolving the respondent of all guilt, and in vacating the order of revocation of license, was illegal. He would place reliance on the judgment of the Bombay High Court in Commissioner of Customs v. Worldwide Cargo Movers - 2010 (253) E.L.T. 190; the Madras High Court in Sri Kamakshi Agency v. Commissioner of Customs, Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns-Asia Shipping, receiving Rs. 150/- as service charges for each such shipping bill. Proceedings were initiated against the respondent and others under Section 114 of the Customs Act for improper export of goods. While the exporter was imposed a penalty of Rs. 15,00,000/-, the respondent was imposed a penalty of Rs. 25,000/- for their role in attempting to abet the illicit export. The order of penalty, imposed under Section 114 of the Customs Act, has attained finality in so far as the respondent herein is concerned. The respondent s guilt in abetting improper export of goods is established not only by the proceedings under Section 114 of the Customs Act having attained finality, but also by the confession of its partner and authorized signatory, which statement has been accepted as true both by the Commissioner of Customs and the CESTAT. By selling blank shipping bills or bills of entry, the CHA had belied the trust imposed on him by the department; and it enabled an unscrupulous member of the trade to exploit the confidence which a CHA enjoyed with the departmental authorities. 10. The CESTAT has not differed with the findings of the Commissioner that the respondent had signed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision-making consists in the attribution of relative importance to the factors and considerations in the case. The doctrine of proportionality places in focus the true nature of the exercise - the elaboration of a rule of permissible priorities. Proportionality involves balancing test and necessity test . While the former (balancing test) permits scrutiny of excessive onerous penalties or infringement of rights or interests, and a manifest imbalance of relevant considerations, the latter (necessity test) limits infringement of human rights to the least restrictive alternative. [Judicial Review of Administrative Action (1995), pp. 601-05, para 13.085; Wade Forsyth: Administrative Law (2005), p. 366; Mukul Kumar Choudhuri - (2009) 15 SCC 620]. What is otherwise within the discretionary domain and sole power of the decision maker to quantify the punishment, once the charge of misconduct stands proved, is exposed to judicial intervention if exercised in a manner which is out of proportion to the fault. Award of punishment, which is grossly in excess of the allegations, cannot claim immunity and remains open for interference under limited scope of judicial review. One of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The decision is best left to the disciplinary authority save in exceptional cases where the punishment imposed is shockingly disproportionate or is mala fide. [Worldwide Cargo Movers - 2010 (253) E.L.T. 190]. 13. A similar case, involving blank shipping bills being signed by a CHA, came up for consideration before the Division bench of the Madras High Court. In Sri Kamakshi Agency - 2001 (129) E.L.T. 29 (Mad.), a search was conducted by officers of the Revenue Intelligence, Madras in the premises of M/s. G.D. Enterprises, Madras and others. Voluminous incriminating documents were recovered revealing evasion of Rs. 80,00,000/- as duty. The documents, in this case, were filed by the CHA Sri Kamakshi Agency. During the course of enquiry the authorised representative of the CHA deposed that he had signed the bills getting a remuneration of Rs. 50/- per bill. It is in this factual background that the Division bench of the Madras High Court held :- On perusal of the report of the Enquiry Officer as well as the orders of the respondents and the Tribunal, it is beyond doubt that the Applicant committed gross violation of the Regulation while acting as Customs House Agent. In fact, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advantage of his access to the Department. The grant of licence to a person to act as Custom House Agent is to some extent to assist the Department with the various procedures such as scrutinising the various documents to be presented in the course of transaction of business for entry and exit of conveyance or the import or 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. Therefore when the Applicant who had thirty years of experience as Custom House Agent, when he paved the way for his Power of Attorney to indulge in serious malpractices which ultimately resulted in loss of revenue to the Custom House to the extent of more than 80 lakhs, there is every justification in the respondents in treating the action of the applicant as detrimental to the interest of the nation and pass the final order of revoking his licence. As far as the allegations levelled against the Applicant are concerned, it has been found established that the Proprietor of the Applicant Thiru Natarajan had signed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, blank shipping bills were issued by the partner and authorized representative of the respondent-CHA for a consideration of Rs. 150/- per shipping bill. In cases involving corruption there cannot be any punishment lesser than the maximum i.e., revocation of the license. No other lesser punishment can be contemplated in such cases. [State of T.N. v. K. Guruswamy - (1996) 7 SCC 114]. Any sympathy shown in such cases is totally uncalled for and opposed to public interest. The consideration received for the act of misconduct may be small or large. It is the act of corruption that is relevant, and not the quantum involved in such acts. [Ruston Hornsby (I) Ltd. v. T.B. Kadam - (1976) 3 SCC 71; U.P. SRTC v. Basudeo Chaudhary - (1997) 11 SCC 370; Janatha Bazar (South Kanara Central Coop. Wholesale Stores Ltd.) v. Sahakari Noukarara Sangha - (2000) 7 SCC 517; Karnataka SRTC v. B.S. Hullikatti - (2001) 2 SCC 574; Rajasthan SRTC v. Ghanshyam Sharma - (2002) 10 SCC 330; Municipal Committee, Bahadurgarh v. Krishnan Behari - (1996) 2 SCC 714; U.P. SRTC v. Suresh Chand Sharma - (2010) 6 SCC 555; J.A. Naiksatam v. Prothonotary Senior Master, High Court of Bombay - (2004) 8 SCC 653; Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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