Tribunal upholds CHA license revocation but deems permanent forfeiture harsh. Violations of CHALR Regulations cited.

Interport Impex Pvt. Ltd. Versus Commissioner of Cus. (General), Mumbai

Interport Impex Pvt. Ltd. Versus Commissioner of Cus. (General), Mumbai - 2015 (324) E.L.T. 744 (Tri. - Mumbai) Issues Involved:
1. Revocation of Customs House Agent (CHA) License.
2. Forfeiture of security deposit.
3. Alleged violations of CHALR Regulations 13(a), 13(d), 13(e), 13(n), and 13(o).

Issue-wise Detailed Analysis:

1. Revocation of Customs House Agent (CHA) License:
The appellant's CHA license was revoked by the Commissioner of Customs, Mumbai, on 14-3-2014, due to alleged violations of CHALR Regulations. The appellant contended that they had no prior knowledge of the prohibited goods (non-basmati rice) being exported and had informed Customs about the misdeclaration upon discovery. The Commissioner, however, found the CHA guilty of violating multiple regulations, including failing to verify the credentials of the exporter and not exercising due diligence. The Tribunal concluded that while the appellant violated the regulations, a permanent revocation would be too harsh. Instead, the revocation was ordered to continue until 31-12-2015.

2. Forfeiture of Security Deposit:
The Commissioner of Customs ordered the forfeiture of the entire security deposit of the appellant. The Tribunal upheld this forfeiture, noting that the appellant had failed to meet the necessary regulatory requirements, which justified the forfeiture as part of the penalty.

3. Alleged Violations of CHALR Regulations:

Regulation 13(a):
The appellant failed to take adequate precautions to verify the authorization from the exporter and the credentials of the person pretending to be the exporter's representative. The Tribunal found that the appellant did not exercise due diligence in obtaining authorization directly from the exporter or verifying the identity of the representative, thus violating Regulation 13(a).

Regulation 13(d):
This regulation requires the CHA to advise their client on compliance with the Customs Act. The Tribunal found that the appellant could not have advised the exporter properly as they did not verify the credentials of the person claiming to represent the exporter. Therefore, the appellant was found guilty of violating Regulation 13(d).

Regulation 13(e):
The appellant was charged with failing to exercise due diligence in ascertaining the correctness of information provided to their client. The Tribunal noted that the appellant did not follow proper procedures, such as ensuring the goods were carted in bags rather than containers, which would have facilitated easier detection of prohibited goods. This constituted a violation of Regulation 13(e).

Regulation 13(n):
The Tribunal found that the appellant did not verify the antecedents of the exporter, which is a requirement under Regulation 13(n). The appellant's failure to make any effort to verify the credentials of the exporter, such as contacting the exporter directly, was seen as a serious oversight, leading to a violation of this regulation.

Regulation 13(o):
The Tribunal determined that this regulation, which pertains to the CHA's duty to discharge their responsibilities with speed and efficiency, was inappropriately invoked by the Department in this case, as the issue at hand was one of fraud rather than efficiency.

Conclusion:
The Tribunal upheld the findings of the Commissioner of Customs except for the charge under Regulation 13(o). The appellant was found guilty of violating CHALR Regulations 13(a), 13(d), 13(e), and 13(n). The Tribunal ordered that the revocation of the CHA license would continue until 31-12-2015, after which the license would become operative again on the condition of forfeiture of the security deposit. The appeal was disposed of accordingly.