2018 (6) TMI 741 - AT - Customs

Customs Tribunal Overturns CHA License Suspension & Penalty; Exporter Held Liable

Air Master Freight Service Versus Commissioner of Central Excise, Nagpur

The Tribunal set aside the suspension of the CHA license and penalty imposed under Section 114(i) of the Customs Act, 1962, as there was no provision to ... Suspension of CHA License - penalty u/s 114(i) of the CA 1962 - The allegation on the appellant is that they have not advised their client (exporter) regarding the prohibition of the goods, therefore they have violated the provision of CHALR, 2004 - Held that:- No proceedings were carried out under CHALR 2004 for revocation of licence during the last 8 years. Even though this Tribunal has stayed the suspension of the licence ordered by the impugned order but nothing prevented Commissioner to proceed under CHALR, 2004 therefore commissioner has chosen not to proceed against the CHA. On this basis itself impugned order does not sustain - Also, it is not expected from the CHA to physically verify the goods. There is no other charge on the CHA that they were knowingly involved in the export of prohibited goods therefore even though it is established that the goods attempted to be exported were prohibited goods but responsibility for such wrong doing lies with the exporter and not with the CHA - suspension of license not warranted. Penalty was imposed with reference to the suspension of the licence, however there is no provision under CHALR, 2004 to impose penalty under Section 114(i) of customs Act, 1962. Appeal allowed - decided in favor of appellant. Issues:1. Suspension of CHA licence under CHALR, 20042. Imposition of penalty under Section 114(i) of the Customs Act, 1962Suspension of CHA Licence under CHALR, 2004:The appeal was against the suspension of the appellant's CHA licence and the penalty imposed under Section 114(i) of the Customs Act, 1962. The department alleged that the goods attempted to be exported were prohibited as per relevant notifications. The appellant was accused of not advising the exporter regarding the prohibition of the goods, thus violating CHALR, 2004. The Adjudicating authority suspended the licence and imposed a penalty. However, the Tribunal stayed the suspension and held that there was no provision to impose a penalty on a CHA under CHALR, 2004. The Tribunal found that the suspension and penalty were unwarranted as the CHA was not informed of the exporter's dubious intention, and there was no need to penalize the CHA in such proceedings. The Tribunal allowed the appeal, setting aside the impugned order.Imposition of Penalty under Section 114(i) of the Customs Act, 1962:The appellant argued that no proceedings under CHALR, 2004 were concluded, so the suspension of the licence automatically stood vacated. Regarding the penalty, it was contended that since CHALR, 2004 did not provide for penalty provisions, imposing a penalty under Section 114(i) of the Customs Act, 1962 was improper. On the other hand, the Revenue supported the findings of the impugned order. The Tribunal noted that no proceedings were initiated under CHALR, 2004 for the past 8 years, and even though the suspension was stayed, the Commissioner chose not to proceed against the CHA. The impugned order was found unsustainable as there was no provision under CHALR, 2004 to impose the penalty. It was observed that the CHA only filed the shipping bill as per export documents, and the responsibility for attempting to export prohibited goods lay with the exporter, not the CHA. Therefore, the Tribunal set aside the impugned order and allowed the appeal.In conclusion, the Tribunal found that the suspension of the CHA licence and the penalty imposed were unwarranted as there was no provision to penalize a CHA under CHALR, 2004, and the responsibility for attempting to export prohibited goods rested with the exporter, not the CHA.