2023 (5) TMI 345 - AT - Customs

Tribunal upholds penalty under Customs Agents' Licensing Regulations, emphasizing legal framework

Commissioner of Customs (General) New Customs House, Mumbai Versus Bajaj Enterprises

The Tribunal dismissed the appeal challenging the penalty imposed under the Customs House Agents' Licensing Regulations (CHALR), 2004, citing lack of ... Appellate remedy available to Revenue - Commissioner of Customs to act as Licensing authority and / or administrative exercise of power - Quantum of punishment - Breach of obligation on the part of Customs House Agent (CHA) - Licensing authority decided that the lesser of the two penalties would suffice - Penalty of forfeiture a security deposit of CHA - association with certain operators in the misuse of ‘import export code (IEC)’ for import of heavily undervalued goods - HELD THAT:- In COMMISSIONER OF CUSTOMS (GENERAL) , MUMBAI VERSUS MUKADAM FREIGHT SYSTEMS PVT LTD [2017 (5) TMI 798 - CESTAT MUMBAI], the Tribunal, on consideration of the special law that section 146 of Customs Act, 1962 is and the legislative intent therein while designating the Central Board of Excise & Customs (CBEC) as the authority to frame appropriate Regulations, independent of the general power conferred elsewhere, held that As the sovereign Legislature has specifically empowered a separate appellate structure, the intent to deny the replication of the normal appellate remedy to the disciplinary authority against its own order is emphatic. We cannot countenance reading down the general provisions of review and appeal to apply to dropping of disciplinary proceedings against customs house agents in the face of specific and deliberate non-inclusion of such contingency in Section 146 of Customs Act, 1962 and the Regulations framed thereunder. It cannot be understood that the appellant-Commission is before the Hon’ble High Court of Bombay against the order of the Tribunal in re Mukadam Freight Systems Pvt Ltd; however, to suggest that the Learned Authorised Representative argue by relying on what, probably, are grounds of appeal there the proposition that the Tribunal was in error, even as that is pending, is ‘courage’ of sorts in demonstrating, as well as instigating, lack of judicial discipline. It would also appear that the appellant-Commissioner has also not grasped the essential difference between an adjudicatory and administrative exercise of power. As an adjudicating authority, the Commissioner of Customs weighs the submissions of an assessee visà- vis the interests of the State expressed in legislative enactment; ultimately, it is the detriment to the State that is, statutorily, scrutinized by the reviewing authority and, thus, the empowerment of an authority higher than the adjudicator being designated to pursue appellate remedies that it cannot administratively interfere in - it is inappropriate for the appellant - Commissioner to claim that, despite the ruling on lack of jurisdiction vested in the Committee of Chief Commissioners to direct appeal against orders of the licensing authority, the merit of the present appeal should be considered as though in challenge to an ‘adjudication order’ under Customs Act, 1962. There are no reason to entertain this appeal - appeal dismissed. Issues involved:The judgment involves the appeal against the penalty imposed under Customs House Agents' Licensing Regulations (CHALR), 2004, for breach of obligations by the agent, the adequacy of penalty, the authority of the licensing authority, and the scope of appellate mechanism.Issue 1: Penalty Imposed under CHALR, 2004The appeal was against the penalty imposed under CHALR, 2004 for breach of obligations by the agent, M/s Bajaj Enterprises. The Committee of Chief Commissioners recommended revocation of the license due to connivance in import consignments. The appeal contested the penalty of forfeiture of security deposit as insufficient for the alleged offense.Issue 2: Adequacy of PenaltyThe appellant argued that the respondent-agent was a habitual offender involved in undervaluing goods using 'import export code (IEC)' and that the penalty imposed was not commensurate with the gravity of the offense. Despite the enquiry authority finding all charges 'not proved,' the Commissioner of Customs revoked the license. The Tribunal remanded the case for corrective action due to procedural lapses.Issue 3: Authority of Licensing AuthorityIn the subsequent proceedings, the licensing authority found three charges proved and opted for forfeiture of the security deposit as adequate punishment. The appeal contested the authority's evaluation that the lesser penalty sufficed, urging intervention in determining the quantum of punishment, typically within the licensing authority's purview.Issue 4: Scope of Appellate MechanismThe judgment referenced a previous case emphasizing the power to penalize vested in the appointing authority, i.e., the Commissioner of Customs, under the Customs House Agents Licensing Regulations, 1984. It highlighted the distinct appellate structure for licensees under the Regulations, precluding general provisions for review and appeal. The appellant's argument challenging the Tribunal's order was deemed inappropriate, given the specific legislative design for appellate oversight.In conclusion, the Tribunal dismissed the appeal, citing the lack of jurisdiction to entertain it based on the specific legislative framework governing penalties and appellate mechanisms in customs regulations.