Customs House Agent liability requires proof of licensing breach or collusion; supervised export irregularity alone was insufficient.

A Customs House Agent was not found to have breached Regulation 14(d) or Regulation 14(1) where the export documentation matched the export as accepted by Customs officers under direct supervision, and the insertion of the loading place was made by the exporter's employee. On those facts, revocation of the licence under Regulation 21 was unjustified. Penalty under Sections 114, 113(f), 113(g), 117, 33 and 34 of the Customs Act was also held unsustainable because the goods were not prohibited, no revenue loss was shown, and there was no proof of collusion or connivance with Customs. Mere irregularity in loading did not justify penal action.

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Issues: (i) Whether the Customs House Agent violated Regulation 14(d) and Regulation 14(1) of the Customs House Agents Licensing Regulations, 1984 so as to justify revocation of its licence under Regulation 21. (ii) Whether penalty under Sections 114, 113(f), 113(g), 117, 33 and 34 of the Customs Act, 1962 was sustainable in the absence of collusion or connivance with Customs and when the export was cleared under Customs supervision.

Issue (i): Whether the Customs House Agent violated Regulation 14(d) and Regulation 14(1) of the Customs House Agents Licensing Regulations, 1984 so as to justify revocation of its licence under Regulation 21.

Analysis: The record showed that the word "Haldia" was inserted by the exporter's employee and not by the Customs House Agent. The export was nevertheless permitted by Customs officers at the relevant stage, under direct supervision and after payment of the supervision charges. In that background, the Customs House Agent could legitimately proceed on a bona fide belief that the export documentation and loading arrangement were acceptable. Regulation 14(d) did not require the agent to advise Customs officers that their own act was unlawful, and Regulation 14(1) was not breached when the documents presented corresponded to the export as accepted and supervised by Customs.

Conclusion: The licence revocation was unjustified and was rightly set aside.

Issue (ii): Whether penalty under Sections 114, 113(f), 113(g), 117, 33 and 34 of the Customs Act, 1962 was sustainable in the absence of collusion or connivance with Customs and when the export was cleared under Customs supervision.

Analysis: The goods were not prohibited, no revenue loss was shown, and the export took place under the direct supervision of Customs officers who had accepted the supervision charges and allowed the export to proceed. In the absence of any allegation or proof of collusion or connivance with Customs officers, the mere irregularity in the place of loading did not justify penal action against the Customs House Agent. The Tribunal's view that the penal provisions were not attracted on these facts was supported by the record.

Conclusion: The penalty was unsustainable and was rightly quashed.

Final Conclusion: The appeal failed because the Customs House Agent was neither shown to have violated the licensing regulations nor shown to have acted with the culpable involvement needed to sustain penalty under the Customs Act.

Ratio Decidendi: Where export is permitted by Customs officers under their supervision and without proof of collusion or connivance, a Customs House Agent cannot be penalised or deprived of licence merely for a documentation irregularity that was not of its own making and did not constitute a breach of the applicable licensing obligations.

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