2009 (9) TMI 842 - AT - Customs

Revocation of CHA license overturned due to lack of evidence linking misconduct to the company.

The Tribunal set aside the revocation of a CHA license based on an employee's misconduct, emphasizing the lack of evidence linking the CHA to the ... Revocation of CHA licence - misconduct of employees - Case was booked against the importer for importing ozone depleting substances with intent to clear the same without filing proper declarations of the same at the rime of filing of the bill of entries - Held that: - there are no allegations and findings of the enquiry officer against the CHA as regards the violation of the provisions of CHALR. It is seen that the errors or commissions or omissions are committed by one Mr. Nageshwara Rao, clearing executive of the appellant but was not instructed by the appellant to do such an act. The Commissioner of Customs can revoke the licence of the Custom House Agent and order for forfeiture of the security only if there is a failure on the part of custom house agent to comply with any of the provisions of the conditions of the bond, provisions of this regulations and any mis-conduct on his part - in the present case, there are no findings that the appellant had failed to comply with any of the regulations or has had engaged in mis­conduct on his part which renders him unfit to transact any business. In the absence of any such findings, it is held that the appellant is punishable with the revocation of the licences under the provisions of Regulation 19(8) of CHALR. Appeal allowed - decided in favor of appellant. Issues:Revocation of CHA license based on employee misconduct.Detailed Analysis:1. Issue of Employee Misconduct:The case involves the revocation of a CHA license due to the misconduct of an employee who assisted importers in making false declarations on the bill of entry. The employee's actions led to improper importation of ozone-depleting substances by the importers. The CHA license holder was held responsible for the employee's actions, leading to the revocation of the license under Rule 20 of CHALR 2004. The lower authorities also issued a show cause notice for penalty under Section 112A of the Customs Act, 1962. An enquiry officer confirmed the employee's misconduct, leading to the decision to revoke the CHA license.2. Principles of Natural Justice:The appellant argued that the revocation violated the principles of natural justice. They contended that there were no findings implicating the appellant in the irregularities committed by the importers. The appellant claimed that the requirements of Regulation 20 of CHALR for revoking the license were not met in this case. The appellant highlighted that there was no misconduct on their part related to the import clearances, and any employee misconduct should not be attributed to the CHA under Regulation 19(8) of CHALR 2004.3. Legal Provisions and Findings:The Commissioner's findings indicated that the CHA failed to supervise the employee properly, as required by Regulation 19(8) of CHALR 2004. However, the Tribunal noted that there were no specific allegations or findings of CHA's violation of CHALR provisions. The revocation was solely based on the employee's actions, without evidence of CHA's knowledge or involvement. The Tribunal analyzed Regulation 20, emphasizing that revocation requires CHA's failure to comply with regulations or engage in misconduct. Since there were no findings against the CHA, the revocation was deemed unjustified.4. Tribunal Decisions and Legal Interpretation:The Tribunal referred to past decisions where revocation of licenses was not warranted for employee misconduct without CHA's knowledge or involvement. The Tribunal found that the appellant could not be held responsible for the employee's actions without evidence of CHA's complicity. The Tribunal concluded that the revocation order lacked specific allegations against the CHA, leading to the decision to set aside the order and allow the appeal.In conclusion, the judgment focused on the legal provisions governing the revocation of a CHA license based on employee misconduct. The analysis highlighted the importance of evidence linking the CHA to the misconduct and emphasized the need for specific findings against the CHA to justify license revocation. The Tribunal's decision to set aside the revocation order underscored the requirement for clear evidence of CHA's involvement in employee misconduct before taking punitive action.