2020 (1) TMI 480 - AT - Customs

Customs House Agent's Liability Determination Upheld, License Revocation Order Quashed

The Tribunal found that the actions of the individual working under the Customs House Agent's license fulfilled the Agent's obligations under the ... Revocation of CHA License - forfeiture of security deposit - non-compliance with the time limit provided under Regulation 20 of CBLR, 2013 - allegation that the entire work of import clearance was undertaken by one Sri Dattatray S. Weling and it is alleged that said Sri Weling is a third party to whom the CHA had lent out their licence against commission. Whether Sri Dattatray S. Weling was a ‘G’ card holder of the appellant CHA M/s. JD Impex at Mumbai at the relevant point of time when the import consignment of M/s. Jude’s International INC was handled by the appellant CHA? HELD THAT:- It is observed that during the course of cross-examination before the Inquiry Officer and Asstt. Commissioner of Customs in the course of inquiry proceeding, said Sri Dattatray S. Weling had categorically stated that he was holding ‘G’ card No. W-16 for M/s. JD Impex. However, since no such document was in record, this Bench under Interim Order dated 26.09.19 adjourned the matter upon the prayer of the appellant for time to produce such documents - No copy of the original ‘G’ card of Sri Dattatray S. Weling could be produced by the appellant before this Bench on the pretext that DRI, Mumbai had taken away the original ‘G’ card of said Sri Dattatray S. Weling during the course of investigation and till date the same had not been returned. To substantiate such fact/argument, a letter dated 16.10.19 has been produced before this Bench wherein it appears that said Sri Dattatray S. Weling on behalf of the appellant M/s. JD Impex had stated before the DRI authority of Mumbai about the fact of submission of original ‘G’ card by him before them and he had also prayed for return of the same. We find that such letter has also been duly received by one Vikas Yadav, IO/DRI/MZU ON 16.10.19. During the course of hearing on 25.10.19 before this Bench, there is no averment on the part of the respondent authority that contents and facts of the said representation dated 16.10.19 of the appellant before DRI, Mumbai are not correct. It is also not argued by the respondent authority that the original ‘G’ card of Sri Dattatray S. Weling is not with the DRI, Mumbai. However, we find no reason to disbelieve the Customs record verifying the fact that Sri Dattatray S. Weling was holding ‘G’ card for CB, M/s. JD Impex. Whether act of said ‘G’ card holder amounts to due discharge of obligations by the CB/CHA? - HELD THAT:- Under Regulation 17 of CBLR, 2013, the Customs Broker is entitled to appoint /employ any number of person to assist him in the business transacted by him after obtaining approval of the Deputy Commissioner of Customs or Asstt. Commissioner of Customs. Any such employed person who passes the examination under sub-regulation( 3) of Regulation 17 of CBLR, 2013 is issued with a photo identity card in Form ‘G’ under Regulation 17(7) ibid by the Dy. Commissioner or Asstt. Commissioner of Customs. Regulation 17(9) of CBLR, 2013 specifically provides that the Customs Broker shall be held responsible for all acts or omissions of his employees during their employment. The employment of ‘G’ card holder by a CB, as such, is not only upon approval of the Deputy Commissioner or Asstt. Commissioner of Customs but also subject to passing of examination conducted by the said Dy. Commissioner or Asstt. Commissioner of Customs to ascertain the adequacy of knowledge of such employee regarding the provisions of the Act subject to which goods and baggages are cleared through Customs - Further, when the Customs Broker is held responsible for all acts and omission of such employee during the employment, all acts or omission during the course of transaction of business of CB by such employee is deemed to be acts or omissions of the CB. In the present case, it is evident that Sri Dattatray S. Weling had discharged all the obligations under Regulation 11 of CBLR, 2013, but the respondent Commissioner arrived at a conclusion that there was violation of different obligations under different sub-regulations of Regulation 11 of CBLR, 2013 by the appellant CB, M/s. JD Impex upon the erroneous finding of fact that Sri Dattatray S. Weling was an unauthorized person. Since Sri Dattatray S. Weling was ‘G’ card holder of appellant M/s. JD Impex, as discussed supra, and since his fulfilment of obligations under Regulation 11 of CBLR, 2013 deemed to discharge of obligation by CB, M/s. JD Impex, there cannot be any violation of any of the sub-regulations of Regulation 11 of CBLR, 2013 on the part of the CB/ appellant in the present case. There was no violation of Regulation 11 of CBLR, 2013 on the part of the appellant/ CB in the present case and hence, the impugned order revoking their CB Licence and forfeiture of their security deposit, is liable to be quashed - appeal allowed - decided in favor of appellant. Issues: Appeal against revocation of Customs House Agent license and forfeiture of security deposit under Regulation 20(1) of CHALR, 2004 (now Regulation 18 of CBLR, 2013).Analysis:1. The appeal was filed against the Order-in-Original revoking the license and forfeiting the security deposit of the Customs House Agent (CHA). The Tribunal initially set aside the license revocation but upheld the security deposit forfeiture. The High Court later directed a re-hearing of the appeal on merit, setting aside the previous Tribunal order. The current appeal was heard on its merits.2. The appellant's advocate argued that the alleged violations were based on the unauthorized work of a third party, Sri Weling, whom the CHA allegedly allowed to work on their license. The advocate presented evidence from Weling's cross-examination, showing he was an employee of M/s. JD Impex and had the necessary documents. The advocate contended that since Weling was a 'G' card holder of the CHA, there was no violation of the regulations.3. The respondent, representing Customs authority, argued that Weling, using the CHA's license for import clearance, violated regulations as the CHA had no knowledge of the actual importer or its documents, leading to attempted smuggling. The respondent supported the Adjudicating authority's findings.4. During the proceedings, documents were produced verifying Weling's 'G' card status. The Customs record confirmed Weling's 'G' card holder status for M/s. JD Impex. The respondent did not dispute the verification letter produced by the appellant.5. After considering all evidence and arguments, the Tribunal examined whether Weling was a 'G' card holder of the CHA and if his actions fulfilled the CHA's obligations under the regulations.6. The Tribunal found that Weling was a 'G' card holder and handled the import consignment, communicating with the importer. According to Regulation 17 of CBLR, 2013, a Customs Broker can appoint employees after approval, and the broker is responsible for their acts. Weling's compliance with obligations under Regulation 11 was deemed the CHA's compliance.7. The Tribunal concluded that Weling's actions fulfilled the CHA's obligations under Regulation 11, and as he was a 'G' card holder, there was no violation by the CHA. Therefore, the order revoking the license and forfeiting the security deposit was quashed, providing relief to the appellant CHA.8. The impugned Order-in-Original revoking the license was set aside, with consequential relief in favor of the appellant, M/s. JD Impex, pronounced in open court on 18.12.2019.