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TMI Blog2018 (11) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... dings of the CESTAT that there are no violations of Regulation 14(a) and 14(l) of the CHALR 1984 by the CHA are based on no evidence or partly relevant or partly irrelevant evidence and are otherwise perverse and arbitrary? (d) Whether CESTAT can ignore that a penalty of Rs. 5,00,000/- under Section 112(b) of the Customs Act, 1962 was imposed on the CHA by Commissioner of Customs (Preventive), which was reduced to Rs. 2,00,000/- by the CESTAT itself vide its order No. A/963-66/99-NB(DB) dated 29.10.1999, which was upheld by Hon'ble Apex Court, thereby confirming the involvement of the CHA in the case? 2. Before answering the substantial questions of law, a brief background of facts is necessary. The Respondent is a Customs House Agent governed by the Customs House Agency Licensing Regulations (the relevant regulations being the Regulations of 1984 and hereinafter referred to as "1984 Regulations"). The Respondent holds a Customs House Agent License ("CHA Licence"). The Appellant has stated in the Appeal that three import firms in collusion with the Respondent had during the period 1992 - 1997 imported multiple consignments of assorted engineering cargo and declared it in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23rd August, 1999, the Tribunal directed restoration of the CHA Licence vide order dated 23rd August, 1999. The Revenue filed reference application in the Tribunal and the Revenue was accordingly directed to restore the licence immediately by order dated 10th November, 1999. Accordingly, the CHA Licence was restored vide order dated 21st December, 1999 passed by the Commissioner of Customs (G), Mumbai. 5. Thereafter, an inquiry under the regulation 23 of the 1984 regulations was initiated against the Respondent for violation of Regulations 14(a), 14(d), 14(l), 14(o) and 14(j) of the 1984 Regulations. During the inquiry proceedings, the inquiring officer held that three Charges of violation of Regulations 14(a), 14(d) and 14(l) of the 1984 Regulations levelled against the Respondent were proved. The Adjudicating Authority accordingly after considering all aspects of the case ordered cancellation of the CHA Licence No. 11/819 held by the Respondent and forfeiture of the security deposit vide Order dated 19th October, 2004. The Respondent being aggrieved by the order dated 19th October, 2004 preferred an Appeal before the Tribunal and the Tribunal vide order dated 4th November, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders relating thereto; 21. Suspension or revocation of licence. - (1) The Commissioner may, subject to the provisions of Regulation 23, suspend or revoke the licence of a Custom House Agent so far as the jurisdiction of the Commissioner is concerned and also order for forfeiture of security on any of the following grounds:- (a) failure of the Custom House Agent to comply with any of the conditions of the bond executed by him under Regulation 11; (b) failure of the Custom House Agent to comply with any of the provisions of these regulations, whether within the jurisdiction of the said Commissioner or anywhere else; (c) any misconduct on his part whether within the jurisdiction of the said Commissioner or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station. (2) Notwithstanding anything contained in sub-regulation (1), the Commissioner may, in appropriate cases, where immediate action is necessary, suspend the licence of a Custom House Agent where an enquiry against such agent is pending or contemplated. 7. We shall now consider the submissions and answer the substantial questions of law in seriation as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cancellation of the CHA Licence as ordered by the Commissioner and that accordingly a lenient view has been taken considering that the Respondent had been paralysed from conducting its business for over eight months, on account of the CHA Licence having been suspended and which came to be restored nearly after one year. He has relied upon the inquiry report to show that two of the charges of violation of the 1984 Regulations levelled against the Respondent were also not proved. He has distinguished the judgment of the Supreme Court in K.M. Ganatra (Supra) by submitting that the Supreme Court had found in the factual matrix of that case there was a serious violation of the Regulations and on many occasions by the transferring of the licence in contravention of the Regulations and the Customs House Agent was held to be involved in fraudulent activity, causing immense financial loss to the Revenue. It was in this context that the Supreme Court held that the discretion exercised by the Tribunal in restricting the period of revocation of the CHA Licence was inappropriate. He has relied upon the judgment of this Court in the case of Principal Commissioner of Cus. (General) Vs. Interport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent prior to the passing of the impugned order to be sufficient. The judgment of the Supreme Court in K.M. Ganatra (Supra) was passed in the facts and circumstances of that case considering that the transfer of licence by the customs house agent was in contravention of the Regulations on many occasions and that immense financial loss has been suffered to the Revenue. The Supreme Court accordingly held that in the factual matrix of that case, it was a serious violation on the part of the customs house agent involving fraudulent activity affecting the Revenue and hence the discretion exercised by the Tribunal in restricting the period of revocation of the customs house agent licence was found to be inappropriate. The judgment of the Supreme Court in K.M. Ganatra (Supra) has been distinguished in Interport Impex P. Ltd. (Supra) and in paragraph 8, this Court held thus:- Though, Mr. Jetly would submit that this is a complete arbitrary exercise on the part of the Tribunal and it should not have interfered with that part of the order of the disciplinary authority, what we find is that this case is some-what distinct from K.M. Ganatra (Supra). There, the Tribunal on the basis of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant evidence and are otherwise perverse and arbitrary. Dr. Sujay Kantawala on the other hand has submitted that the Tribunal only after considering the evidence on record including the findings in the inquiry report has taken a reasoned decision in setting aside the other charges of violation of the 1984 Regulations. He has taken us through the impugned order and submits that this being findings of fact which are not in any manner perverse, calls for no interference from this Court. 15. Having considered the submissions, we find that the Tribunal has in considering whether the Respondent had committed violation of Regulation 14(a) of the Regulation, 1984 noticed that there was a discrepancy in the show cause notice itself. The Tribunal has considered the statement recorded under Section 108 of the Customs Act of Shri Krishnakumar Nair, Director of the Respondent that the three importers are companies working under the name of Metropolitan Group of Companies and it is the Metropolitan Group of Companies which had issued letter in favour of the Respondent to deal with the clearance of the exports and imports. This was never disowned by the importers as having not been authorised by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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