2014 (5) TMI 290 - AT - Customs

Revocation of CHA License Upheld for Lack of Supervision Over G Card Holder

The Tribunal upheld the revocation of the CHA license and forfeiture of the security deposit, citing lack of necessary supervision by the CHA over the G ... Revocation of CHA License - Forfeiture of security - Ignorance of the conduct/activities of CHA`s Employees - ‘G’ Card and ‘H’ Card Authorisation – Forgery by signature – Whether there is lack of supervision on part of appellant as CHA over work of the authorized G Card holder who transacted the business in Custom House – Held that:- This Court cannot find fault with the Commissioner`s observation that appellant had not taken the precaution of meeting importer personally - CHA allowed the documents for import to be handled by the employee Shri Vipin Kumar on behalf of the firm, who prepared the check list and signed the bill of entry by forging the signature of the appellant - Moreover 2 copies of ‘H’ cards and ‘G’ cards were issued to 2 friends of Shri Vipin Kumar - It is not the case that appellant had no means to have proper control over the employees and even those steps have not been taken by CHA in this case especially in view of the fact that he has 12 branches all over the country. Appellant`s only claim before the original authority as well as before this Court is that Shri Vipin Kumar did forging on his own and he did not know it - Even this claim has been found to be baseless and Commissioner made an observation that this was not a one off instance - These observations have not been contradicted by showing any evidence or making any submissions - In fact after the amendment of CHA Regulation in 2010, there is another regulation introduced which requires a CHA to verify who is the importer etc. - This is really not relevant and may not be proper for consideration since this was not the point which was taken into account by the Commissioner or in the earlier proceedings - This is another aspect which also goes against conduct of CHA - According to Regulation 13 the CHA is required to verify correctness of the IE code No - Therefore all the claims of the appellant go against him rather than in his favour – Relying upon CC v. Worldwide Cargo Movers [2006 (11) TMI 281 - BOMBAY HIGH COURT] – In view of Regulation 19(8), no merit is found in the appeal and is rejected – Decided against Assessee. Issues Involved:1. Revocation of CHA License and Forfeiture of Security Deposit2. Allegations of Lack of Supervision by the CHA3. Forgery of Customs Documents by the G Card Holder4. Bias and Non-application of Mind by the Commissioner5. Applicability of Vicarious Responsibility6. Principles of Natural Justice and Proportionality of PunishmentDetailed Analysis:1. Revocation of CHA License and Forfeiture of Security Deposit:The impugned order involved the revocation of the appellant's CHA license and the forfeiture of a security deposit of Rs. 50,000/-. The Tribunal noted that the appellant's CHA license had been revoked due to alleged lack of supervision over the activities of the authorized G Card holder, who was involved in forgery of customs documents.2. Allegations of Lack of Supervision by the CHA:The main charge against the appellant was the lack of supervision over the G Card holder, who transacted business at the Cochin Custom House. The Commissioner had ordered the revocation of the CHA license based on this charge. The appellant argued that the charge was vague and unsupported by evidence, as the CHA had no knowledge of the importer's activities or the forgery committed by the G Card holder.3. Forgery of Customs Documents by the G Card Holder:The case involved the forgery of customs documents by the G Card holder, who signed the Bill of Entry and submitted a forged Port Health Certificate without the CHA's knowledge. The G Card holder also fraudulently obtained ID cards for two outsiders and collected service charges and customs duty from the importer. The CHA was unaware of these activities until the investigation by the SIB revealed the fraud.4. Bias and Non-application of Mind by the Commissioner:The appellant contended that the Commissioner exhibited bias and non-application of mind in his order. The Commissioner had observed that the CHA admitted to not meeting the importer personally, which the appellant claimed was a misinterpretation of his statements. The appellant argued that the Commissioner selectively used statements recorded during the investigation and failed to provide all relevant statements, which would have demonstrated the CHA's innocence.5. Applicability of Vicarious Responsibility:The Commissioner concluded that the CHA was vicariously responsible for the actions of the G Card holder. The appellant argued that vicarious responsibility was not applicable in this case, as the CHA had no knowledge of the fraudulent activities. The appellant cited case laws to support the argument that vicarious responsibility cannot be attributed when the employee acted fraudulently without the employer's knowledge.6. Principles of Natural Justice and Proportionality of Punishment:The appellant claimed that the revocation of the CHA license violated principles of natural justice and was a disproportionate punishment. The CHA had an unblemished career for over 26 years, and the revocation of the license would severely impact his livelihood. The appellant argued that the charge of lack of supervision was too fragile to justify such a harsh penalty.Tribunal's Conclusion:The Tribunal rejected the appellant's submissions, agreeing with the Commissioner that the CHA failed to exercise necessary supervision over his employees. The Tribunal noted that the CHA allowed the G Card holder to handle import documents without proper oversight, leading to the forgery. The Tribunal found no evidence to support the appellant's claim of ignorance and emphasized the importance of supervision, especially for a CHA with multiple branches. The Tribunal upheld the revocation of the CHA license, citing the decision of the Hon'ble High Court of Bombay in a similar case, which supported the Commissioner's disciplinary measures. The appeal was dismissed, and the order was pronounced in open court.