2016 (12) TMI 635 - AT - Customs

Tribunal overturns license revocation for alleged subletting, finding no evidence, other violations not sustained

M/s. S.A. Dalal & Co. Versus Commissioner of Customs (G), Mumbai-I

M/s. S.A. Dalal & Co. Versus Commissioner of Customs (G), Mumbai-I - TMI Issues Involved:1. Revocation of CHA license.2. Forfeiture of security deposit.3. Violation of CHALR 2004 Regulations, specifically Regulations 12, 13(a), 13(d), 13(e), 13(n), 13(o), and 19(8).Detailed Analysis:1. Revocation of CHA License:The Commissioner of Customs revoked the CHA license of the appellant on the grounds that the appellant had sublet the license to various companies, which was considered a violation of Regulation 12 of CHALR 2004. The appellant argued that outsourcing the services of other persons does not constitute subletting the license. The Tribunal found that the customs clearance work was done by the employee of the appellant and the documentation was in the name of the appellant. The Tribunal held that the arrangement adopted by the CHA did not amount to subletting of the license. The Tribunal referred to previous judgments, such as Krishan Kumar Sharma vs. Commissioner of Customs, New Delhi, K.S. Sawant & Co. vs. Commissioner of Customs (General), Mumbai, and Crown Shipping Agency vs. Commissioner of Customs, Mumbai, which supported this view.2. Forfeiture of Security Deposit:The Commissioner also ordered the forfeiture of the entire security deposit. The Tribunal, however, found that since the charge of subletting was not proved, the consequential forfeiture of the security deposit was also not sustainable. The Tribunal set aside the order of forfeiture.3. Violation of CHALR 2004 Regulations:The Commissioner found the appellant guilty of violating several regulations (13(a), 13(d), 13(e), 13(n), 13(o), and 19(8)) besides Regulation 12. However, the enquiry officer had found all charges except the violation of Regulation 12 to be either 'disproved' or 'not proved'. The Tribunal agreed with the enquiry officer's findings and held that since there was no case of subletting the license, the violation of other regulations would not sustain. The Tribunal emphasized that the genesis of the entire case was the charge of subletting, and since this charge was not proved, the other charges were also not sustainable.Conclusion:The Tribunal concluded that the department's case for revocation of the license was not sustainable. The impugned order was set aside, and the appeal was allowed. The Tribunal pronounced this decision in court on 15/11/2016.