2018 (11) TMI 245 - HC - Customs

Tribunal Upholds CHA Licence Decision Despite Violation

The Tribunal upheld its decision to set aside the cancellation of the CHA Licence despite the Respondent's violation of Regulation 14(d) of the CHALR, ... Cancellation of the CHA Licence - violation of Regulation 14(d) of the CHALR, 1984 - jurisdiction of CESTAT to grant relief by taking a lenient view, the power for which does not come out of the parent enactment - violations of Regulation 14(a) and 14(l) of the CHALR 1984 - relevant/partly relevant evidences - penalty u/s 112(b) of the Customs Act, 1962. Whether the CESTAT is right in law in setting aside the order of cancellation of the CHA Licence after holding that there is a violation of Regulation 14(d) of the CHALR, 1984 by the CHA? - Held that:- In the case of Interport Impex P. Ltd. [2016 (12) TMI 519 - BOMBAY HIGH COURT] and Ajay Clearing [2016 (4) TMI 230 - BOMBAY HIGH COURT], this Court has held that the Tribunal in taking a liberal view had not exercised its discretion arbitrarily or capriciously and its order could not be termed as perverse or vitiated by any error of law apparent on the face of the record. This Court like in the present case held that the loss already suffered from the date of revocation till the date of the impugned order of the Tribunal was sufficient and no further revocation of licence was warranted - the impugned order has not taken a view which is in any manner perverse and / or arbitrary - decided in favor of assessee. Whether CESTAT, which is a creature of the Statute, is vested with the jurisdiction to grant relief by taking a lenient view, the power for which does not come out of the parent enactment? - Held that:- This question has already been answered by the Supreme Court in K.M. Ganatra [2016 (2) TMI 478 - SUPREME COURT], where the Supreme Court has held that the Tribunal has power under the Customs House Agents Licensing Regulations to modify the order of the Commissioner by taking a lenient view and restricting the period of revocation - Revenue does not dispute this position and hence this question stands answered in the affirmative in favour of the Assessee. Whether the findings of the CESTAT that there are no violations of Regulation 14(a) and 14(l) of the CHALR 1984 by the CHA are based on no evidence or partly relevant or partly irrelevant evidence and are otherwise perverse and arbitrary? - Held that:- In so far as the other charge of violation of Regulation 14(l) of the 1984 Regulations viz. the preparation and presentation of the documents (Shipping bills) is concerned, the Tribunal held that the Appellant was not able to prove that the documents prepared / presented by Respondent – Custom House Agent was not in accordance with the orders, if any, relating thereto. Further no such orders were in existence. The Tribunal has taken a view that the Customs Officer would in any event have scrutinized the compliance or otherwise of the documents filed before them before the consignments were cleared. The Tribunal accordingly found that the alleged violation on the part of the Respondent in not preparing or presenting documents to the Customs Authorities strictly in accordance with the Rules and orders relating thereto to have not been proved - this view taken by the Tribunal that the Respondent is not guilty of the charge of having violated Regulation 14(l) of the 1984 Regulations is a possible view taken by the Tribunal on the evidence and material on record which cannot be held to be in any manner perverse and / or arbitrary - decided against Revenue. Whether CESTAT can ignore that a penalty of ₹ 5,00,000/- under Section 112(b) of the Customs Act, 1962 was imposed on the CHA by Commissioner of Customs (Preventive), which was reduced to ₹ 2,00,000/- by the CESTAT itself, which was upheld by Hon'ble Apex Court, thereby confirming the involvement of the CHA in the case? - Held that:- This substantial question of law does not arise from the impugned order of the Tribunal. Accordingly, the Revenue does not press this question of law. Appeal dismissed - Decided in favor of respondent-assessee. Issues Involved:1. Legality of setting aside the cancellation of the CHA Licence despite violation of Regulation 14(d) of the CHALR, 1984.2. Jurisdiction of CESTAT to grant lenient relief not explicitly provided by the parent enactment.3. Validity of CESTAT's findings regarding violations of Regulations 14(a) and 14(l) of the CHALR, 1984.4. Consideration of the penalty imposed under Section 112(b) of the Customs Act, 1962.Issue-wise Detailed Analysis:Re. Question (a):The Tribunal found the Respondent guilty of violating Regulation 14(d) of the 1984 Regulations but set aside the cancellation of the CHA Licence, taking a lenient view due to the Respondent's suspension period. The Tribunal considered that the Respondent had already suffered significant business paralysis due to the suspension of the CHA Licence. The Supreme Court's judgment in Commissioner of Customs Vs. K.M. Ganatra & Co. was cited by the Appellant to argue against leniency, but the Tribunal distinguished the present case from K.M. Ganatra, noting that the latter involved more severe and repeated violations. The Tribunal's decision was upheld, finding no arbitrariness or perversity in its lenient approach.Re. Question (b):The Supreme Court in K.M. Ganatra & Co. confirmed that the Tribunal has the authority to modify the Commissioner's order and take a lenient view. This power was acknowledged and undisputed by the Revenue, affirming the Tribunal's jurisdiction to grant relief.Re. Question (c):The Tribunal's findings that the Respondent did not violate Regulations 14(a) and 14(l) were challenged by the Appellant as being based on no evidence or irrelevant evidence. However, the Tribunal found that the Respondent had proper authorization from the importers, and there was no proof that the documents prepared by the Respondent were not in accordance with the relevant orders. The Tribunal's conclusions were deemed to be based on a reasonable interpretation of the evidence, and thus, not perverse or arbitrary.Re. Question (d):Both parties agreed that this substantial question of law did not arise from the impugned order of the Tribunal. Consequently, this question was not pressed by the Appellant and was dismissed.Conclusion:The Appeal was dismissed, with questions (a), (b), and (c) answered in favor of the Respondent and against the Appellant. Question (d) was dismissed as not pressed.