TMI Blog2022 (9) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the investigating agency, the discretion exercised by the learned Tribunal cannot be termed to be either arbitrary or perverse. The period during which the license stood revoked, i.e., commencing from the date of suspension till the date of revocation vide order dated April 13, 2012 and till date would be a deterrent to the respondent to carry on his functions in future as a Customs House Agent strictly in accordance with the terms of the license and faithfully and diligently undertake the activities bearing in mind the important role played by a CHA in the Customs House. The order passed by the learned Tribunal setting aside the revocation of license cannot be held to be wholly perverse considering the facts and circumstances of the case, however, setting aside the order forfeiting the security deposit is not tenable - The respondent having failed to adhere to Regulation 13(a) of the CHALR, 2004 cannot be exonerated completely and, therefore, the period during which the license stood revoked till it is restored shall be treated as a penalty and the order of confiscation of security deposit passed by the competent authority stands restored with a direction to the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause as to why penalty should not be imposed on them under Section 114(i) of the Act on the alleged ground that the respondent for material gain assisted in the attempt of illicit export of Red Sanders and thus, had failed to discharge their responsibilities properly/ legally in dealing with the subject goods. Further, they had handled the consignments without getting any authorization letter from the declared exporters and they had failed to advise their clients to comply with the provisions of the Act and did not bring the matter to the notice of the Customs Authorities and all these tantamounts to not exhibiting their proper role as CHA. The competent authority under CHALR was requested to take suitable action in terms of the Regulations for not complying with the obligations laid down in Regulation 13 of the CHALR. Further, it appears that the respondent has rendered themselves liable for penal action under Section 114(i) of the Act for the aforesaid omission and commission. The appellant submitted their explanation on March 16, 2010 stating that they received the job order from M/s. Suman International and they were aware that M/s. Suman International had secured the job order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the CHALR to take action against the respondent is not proper and justified. Accordingly, the respondent prayed for dropping further proceedings pursuant to the show-cause notice dated 25.02.2010. 3. Thereafter, show-cause notice dated July 26, 2010 was issued to the respondent under Regulation 22(1) of the CHALR calling upon the respondent to show cause as to why the Customs House Agent License held by them should not be revoked and their security deposit ordered to be forfeited under the provisions of Regulation 20(1) of CHALR, 2004. In the meantime, the license granted to the respondent was suspended under Regulation 20(2) of the CHALR by order dated 18.03.2010. The respondent had challenged the said order by filing an appeal before the learned Tribunal which was pending at relevant time and also stated to be pending as on date. The respondent had submitted in their reply dated 27.03.2012 to the enquiry report and a written synopsis dated 28.03.2012 setting out their defense. The adjudicating authority who had issued the show-cause notice under Section 124 of the Customs Act passed order dated January 4, 2012 dropping the proposal to impose penalty on the respondent on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is evidence to show that the respondent/ CHA had knowledge of the prohibited goods being stuffed into the containers, they cannot be held liable for payment of penalty as penalty cannot be imposed on assumptions and presumptions without evidence. This stand taken by the respondent in the response to the show-cause notice dated February 25, 2010 was accepted by the adjudicating authority in its order dated 04.01.2012, wherein the authority specifically recorded that the Department has failed to establish knowledge of any involvement of the respondent for gain in the alleged conspiracy to abet smuggling of Red Sanders. The learned Tribunal taking note of the said order dated January 04, 2012 and also taking note of the conduct of the respondent in having cooperated with the investing agency and taking into account the overall facts and circumstances of the case which were referred, opined that revocation of license and forfeiture of the security deposit is excessive. The revenue is before us contending that the respondent having violated Regulations 13(a) and (d) of the Regulation, the competent authority under the CHALR was well justified in revoking the license and ordering forf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng note the facts and circumstances of those cases. In Welcome Air Express Pvt. Ltd. the Court held that no lenient approach can be adopted in favour of the Customs House Agent as in the proceedings initiated under Section 124 of the Act, the Commissioner of Customs did not exonerate the CHA. In Marico Logistics Pvt. Ltd. there was an admission made by the Customs House Agent before the Commissioner which clearly shows the connection of the CHA with the attempt to export the prohibited item, Red Sanders and the Court held that the learned Tribunal has picked holes in the evidence brought on record by the Licensing Authority which not only probabilises but also establishes the violation committed by the CHA giving no room for interference. Both the aforementioned decisions may not be applicable to the case on hand as in the proceedings initiated under Section 124 of the Act proposing to levy the penalty on the respondent was dropped by adjudication order dated January 04, 2012 holding that the Department had failed to establish knowledge of the respondent and involvement for gain in the alleged conspiracy to abet smuggling. Thus, the respondent stood completely exonerated from the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and if the Tribunal feels that there is a certain period which has gone by during which the agent has been out of business, then that is sufficient penalty but such a view cannot be taken in all cases as a matter of rule. In Transport Logistics it was held that the CHA was out of work for more than 3 years and that itself is sufficient punishment for the appellant therein. Following the decision of this Court in Commissioner of Customs (Preventive) Versus Over Land Agency 2006 (204) ELT 554 (Cal.), the period of suspension of license was restricted and the CHA therein was directed to make fresh security deposit and on such deposit being made, the license was directed to be restored. In Alankar Shipping Clearing Pvt. Ltd. the Court taking into consideration the decision in K.M. Ganatra Co. held that the Tribunal has power under the CHALR, 1984 to take a lenient view to modify the revocation period. In Exim Cargo Services the Court took into consideration the factual position and held that there is nothing to show that appellant therein or any of its employees could be attributed to any conscious or deliberate mis-statement on behalf of the importer more particularly, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/ exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations . 11. The above decision of the learned Tribunal was approved by the Hon ble Supreme Court in K.M. Ganatra Co. Thus, any contravention of the obligations cast on the CHA even without intent would be sufficient to invite action against the CHA. In Shri Kamakshi Agency Versus Commissioner of Customs 2001 (129) ELT 29 (Mad.) the role of the CHA was explained in the following terms: The very purpose of granting a license to a person to act as Customs House Agent is for transacting any business relating to the entry or departure of conveyance or the import or export of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job order. Therefore, the respondent cannot be fully exonerated from the proceedings. Thus, taking into consideration the reasoning of the learned Tribunal which was arrived at taking note of the fact that the respondent was completely exonerated in the proceedings initiated under Section 124 of the Act and proposal to levy penalty was dropped and also the fact, that the respondent cooperated with the investigating agency, we are of the view that the discretion exercised by the learned Tribunal cannot be termed to be either arbitrary or perverse. The period during which the license stood revoked, i.e., commencing from the date of suspension till the date of revocation vide order dated April 13, 2012 and till date would be a deterrent to the respondent to carry on his functions in future as a Customs House Agent strictly in accordance with the terms of the license and faithfully and diligently undertake the activities bearing in mind the important role played by a CHA in the Customs House. However, the order passed by the learned Tribunal setting aside the forfeiture of the security deposit appears to be granting over indulgence to the respondent. Therefore, to that extent, the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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