2007 (6) TMI 466 - AT - Customs

Tribunal overturns Commissioner's forfeiture order due to lack of basis in notice. Appeal allowed.

The Tribunal set aside the Commissioner's order for forfeiture of security amount, emphasizing that without a clear basis in the show cause notice ... Customs House Agent - Security deposit - Forfeiture of Issues:1. Allegations of undervaluation and mis-declaration of goods by importer.2. Allegations against CHA for collusion and misrepresentation.3. Proposal to revoke CHA license dropped by Commissioner.4. Order for forfeiture of security amount challenged by CHA.Analysis:1. The appeal stemmed from a show cause notice alleging undervaluation and misdeclaration of goods by the importer, leading to suspicions of collusion with the CHA. The notice invoked Regulation 22(1) of the CHALR 2004 to potentially suspend the CHA license under Regulations 20(1)(a), (b), and (c). The CHA, along with its Director and Manager, faced accusations of misrepresentation and undervaluation, prompting the issuance of the notice.2. The Commissioner, after a detailed examination, decided to drop the proposal to revoke the CHA license. However, the Commissioner proceeded to order a forfeiture of Rs. 10,000 from the security pledged by the CHA, which was contested by the CHA. The learned Counsel argued that since the proposal to revoke the license was dropped, the question of forfeiture did not arise, as there was no such proposal in the show cause notice. The Commissioner's decision to order forfeiture without a clear basis in the notice was challenged.3. The learned Counsel highlighted that Regulation 20 of CHALR, 2004 deals with the suspension or revocation of the license, while Regulation 21 pertains to prohibited acts by the CHA. As the main charge of license revocation was dropped, the justification for proceeding with forfeiture from the security pledged was questioned. The Commissioner's order lacked reasoning for the forfeiture decision, leading to the conclusion that the order was not legally sound.4. Upon careful consideration, the Tribunal found the Commissioner's order for forfeiture without a clear basis in the show cause notice to be unjustified. The Tribunal set aside the order, emphasizing that when the main charge of license revocation was dropped, there was no legal ground for proceeding with forfeiture. The appeal was allowed, with any consequential relief granted as necessary.