2014 (2) TMI 624 - HC - Customs

Tribunal reinstates Customs House Agent license, clarifies post-delivery compliance scope

The Tribunal set aside the revocation of a Customs House Agent (CHA) license under Section 130 of the Customs Act, 1962, due to a delivery discrepancy. It ... Revocation of CHA License - Violation of provisions of Regulation of CHALR 2004 - Import of zinc ingots under Advance Licence Scheme - CESTAT set aside the revocation of the CHA Licence - Whether the order of the CESTAT is sustainable in law when it was found that the goods imported have been delivered at a place other than the one shown in the scrip of Advance Licence and the CHA had not bothered to inform the Deputy Commissioner of Customs/Assistant Commissioner of Customs about the same, the CHA being obliged to do so under regulation made in this regard - Held that:- once the goods have been cleared out of customs charge and handed over by the CHA to his client, obligation of the CHA to CHALR comes to an end. It is not the obligation of the CHA to assume that post the clearance of imported goods it would not be taken to the address given in the Advance licence. Moreover, in this particular case, imported zinc ingots had on clearance from the Customs Department taken to the office of the transporter. In these circumstances, there could be no occasion for the CHA to suspect that the imported zinc ingots were not being taken to the destination as declared in the Advance licence namely the factory at Surat in Gujarat. Further under Regulation 13(d) of CHALR the occasion to advice the importer would not arise because there was no occasion for the CHA to know or even suspect that the importer was not complying with the provisions of the Customs Act and/or advance licence under which the goods were cleared. This is more so as delivery to a transporter for carriage of goods at the direction of the importer would not by itself resulted in non-compliance of the Customs Act - Decided against Revenue. Issues:1. Challenge to order under Section 130 of the Customs Act, 1962.2. Interpretation of Customs House [Agents Licensing] Regulations, 1984.3. Revocation of CHA Licence.4. Compliance with Customs regulations.Analysis:1. The Revenue challenged an order under Section 130 of the Customs Act, 1962, regarding the revocation of a Customs House Agent (CHA) licence. The Tribunal set aside the revocation based on the delivery of imported goods to an address different from the one in the scrip of Advance Licence. The Tribunal held that once goods are cleared and delivered, the CHA's obligation ends, and there is no further duty to ensure the goods' use by the importer. The Tribunal reinstated the CHA's licence, emphasizing the lack of evidence of non-compliance by the CHA regarding the delivery address discrepancy.2. The case involved the interpretation of the Customs House [Agents Licensing] Regulations, 1984. The Enquiry Officer found the CHA failed to fulfill obligations under Regulation 13(d) by delivering goods to a non-existing address. However, the Tribunal reasoned that the CHA's duty ends upon delivery to the client, and there was no obligation to ensure the importer's compliance post-delivery. The Tribunal found no need for the CHA to advise the importer as there was no reason to suspect non-compliance with the Customs Act or the advance licence.3. The respondent CHA's licence was revoked by the Commissioner of Customs due to the delivery discrepancy. The Tribunal overturned this decision, citing the importer's direction for delivery and lack of evidence of the CHA's involvement in any non-compliance. The Tribunal highlighted the absence of proof that the CHA was aware of any potential breach or misuse of the advance licence, leading to the reinstatement of the CHA's licence.4. The compliance issue revolved around Regulation 13(d) of the CHALR, requiring a CHA to advise the client to comply with Customs provisions and report non-compliance to Customs authorities. The Tribunal concluded that post-delivery, the CHA's responsibility ceases, and there was no need to advise the importer as there was no indication of non-compliance. The decision emphasized that the CHA's role is limited to the clearance and delivery process, not post-delivery activities, absolving the CHA of liability in the absence of evidence of wrongdoing.