2014 (12) TMI 484 - HC - Customs

Customs House Agent License Revocation Overturned, License Restored with Conditions

COMMR. OF CUS. (GENERAL), MUMBAI Versus SHIV OM SHIPPING AGENCY

The Court overturned the Customs House Agent license revocation, citing the Commissioner's authority to disagree with the Enquiry Officer's findings. ... Revocation of CHA licence under Regulation 22(7) of CHALR, 2004. - On a complaint made by a person it comes to notice that appellant, appearing for Regulation 8, Examination of CHALR, 2004 is failed in SSC examination and the graduation certificate submitted by him is bogus/fake and matter was referred to CIU, it is stated that the CHA, deliberately made false statements under Section 108 of the Customs Act, 1962 the CHA squarely failed to discharge their obligation under Regulation 13(n) read with Regulation 19(8) of CHALR, 2004 and merits immediate suspension and even revocation of CHA licence - Tribunal set aside revocation order - Held that:- Tribunal has relied upon a view taken by this Court earlier [2010 (1) TMI 955 - BOMBAY HIGH COURT] and which has now been expressly overruled. Therefore, it was open for the Commissioner to have disagreed with the Enquiry Officer. All that he has to comply with are the principles of natural justice and before taking any view, he should have heard the Customs House Agent. He should have given him an opportunity to substantiate and prove his defence. It is not therefore the correct proposition of law that the Commissioner was not empowered to disagree with the Enquiry Officer. Ordinarily therefore the Tribunal’s order would be required to be set aside and the matter relegated to the Commissioner from the stage at which he received the enquiry report. The Commissioner, having disagreed with the findings and conclusions in the enquiry report, should have been permitted to issue show cause notice calling upon the respondent to show cause as to why Enquiry Officer’s report should not be rejected and the charges held not to be proved. The Commissioner could have then also called upon the respondent to furnish his explanation on the proposed punishment. Tribunal’s order is not in accordance with law laid down in the Larger Bench decision of this Court but finding that the incident is very old, no useful purpose will be served by permitting the Commissioner to reopen the enquiry and proceed from the stage noted above. Having found that the only lapse was forwarding a certificate in relation to graduation of the son of the partner of the respondent, we are of the opinion that the chapter be closed, particularly when the licence was suspended for about 20 months. The father of Mehul Boda had not assisted the son in proving and submitting an alleged bogus Certificate. The allegations are against the son, who was an employee of the respondent. The son having been disassociated completely now from the business of the respondent firm, so also the partner of the respondent giving an undertaking to this Court which is accepted in the facts and circumstances peculiar to this case, while allowing the appeal, quashing and setting aside the order of the Tribunal instead of restoring the matter back to the Commissioner, we direct as above. We therefore direct that there shall be no penalty save and except suspending of the licence which was already so suspended for 20 months, but now stands restored in the light of the order of the Tribunal. In addition, we direct that the security deposit which was furnished earlier will stand forfeited. The respondent shall furnish fresh security deposit in terms of the applicable Regulations. - Decided partly in favour of Revenue. Issues:Challenge to the order of Customs, Excise and Service Tax Appellate Tribunal regarding revocation of Customs House Agent license based on violation of regulations.Analysis:The appeal challenged the Tribunal's order setting aside the revocation of the Customs House Agent license due to alleged violations of regulations. The appellant contended that the charges of violation were serious and raised substantial questions of law. The case involved the respondent, a partnership firm, where an employee was accused of producing fake certificates during an examination. The Commissioner revoked the license based on this, but the Tribunal overturned the decision. The appeal raised questions regarding the sufficiency of evidence and the Commissioner's authority to disagree with the Enquiry Officer's findings.The Tribunal's decision was based on a previous court ruling that the Commissioner could not contradict the Enquiry Officer's findings. However, a subsequent Larger Bench decision overruled this view, allowing the Commissioner to disagree with the Enquiry Officer after following principles of natural justice. The Court found that the incident was old and decided not to reopen the enquiry. Despite the lapse involving fake certificates, given that the son involved was no longer associated with the business and the father gave an undertaking, the Court decided to quash the Tribunal's order. The Court directed the restoration of the license, forfeiture of the security deposit, and furnishing of a fresh security deposit within four weeks.In conclusion, the Court held that no penalty would be imposed beyond the suspension of the license, which was already restored by the Tribunal. The respondent was allowed to continue operations as a Customs House Agent, given compliance with regulations post-license restoration. The Court emphasized that its decision was specific to this case's unique circumstances and should not set a precedent for future cases. The appeal was disposed of accordingly, with no costs imposed.