Untested section 108 statements cannot sustain CHA disciplinary charges or justify licence revocation without corroboration.

Untested statements recorded under section 108 of the Customs Act could not, by themselves, sustain disciplinary charges where the makers were not examined and no cross-examination was allowed. In the absence of corroborative material showing sale, transfer or lending of the CHA licence, the alleged misconduct was not proved. On the established facts, only a limited lapse in obtaining authorisations was made out, which did not justify the extreme penalty of revocation. The security-deposit forfeiture also required moderation and could not stand at the full level originally imposed.

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Issues: (i) Whether statements recorded under section 108 of the Customs Act, 1962, without examination or cross-examination in the inquiry, could be relied upon to sustain the charges; (ii) Whether the proved material justified revocation of the CHA licence and full forfeiture of the security deposit.

Issue (i): Whether statements recorded under section 108 of the Customs Act, 1962, without examination or cross-examination in the inquiry, could be relied upon to sustain the charges.

Analysis: The relied upon statements were not proved through examination of the makers in the inquiry, and no opportunity of cross-examination was afforded. In the absence of such testing, the statements could not be treated as having evidentiary value for the purposes of sustaining disciplinary charges. The record also did not show any additional material establishing sale or transfer of the licence, or use of the licence by unauthorized persons for monetary gain.

Conclusion: The untested statements could not, by themselves, support the charges against the CHA.

Issue (ii): Whether the proved material justified revocation of the CHA licence and full forfeiture of the security deposit.

Analysis: The record did not establish violation of the core obligations under the CHALR, 2004 so as to justify the extreme penalty of revocation. The finding of transfer or lending of licence was not supported by evidence, and the alleged lapses under the other regulations were not proved with any additional material. At the highest, the facts disclosed only a venial breach in relation to the manner in which authorizations were procured, which did not warrant total revocation of the licence. The forfeiture also required moderation in view of the limited nature of the established lapse.

Conclusion: Revocation of the CHA licence was set aside and the security-deposit forfeiture was restricted.

Final Conclusion: The appeal succeeded only to the extent that the licence was restored and the penalty was reduced, while the remaining monetary forfeiture was limited.

Ratio Decidendi: Disciplinary action against a CHA cannot rest solely on untested section 108 statements; where the statements are neither proved by examination nor subjected to cross-examination and no corroborative material establishes the alleged misconduct, the extreme penalty of revocation is unsustainable.

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