2024 (8) TMI 412 - AT - Customs

Security deposit forfeiture under regulation 20 upheld for breach of customs house agent licensing regulations

CESTAT Mumbai dismissed an appeal regarding forfeiture of security deposit under regulation 20 of Customs House Agents Licencing Regulations, 2014 for ... Forfeiture of security deposit under regulation 20 of the erstwhile Customs House Agents’ Licencing Regulations (CHALR), 2014 - breach of regulation 13 (a), regulation 13(d), regulation 13(e) of Customs House Agents’ Licencing Regulations, 2014 - HELD THAT:- The issue had been agitated by an aggrieved ‘custom house agent’ before the Hon’ble High Court of Bombay and, though in the context of empowerment of ‘prohibition’ under the prevailing Regulations, Commissioner of Customs (General), Mumbai had then argued on non-maintainability of appeal before the Tribunal in the light of limitation in recourse to appellate remedy under the governing Regulations. Not only is the contrary stand now taken by Learned Authorised Representative inconsistent thereby but is also inconsequential in the light of the decision of the Hon’ble High Court of Bombay in SR. SALE & CO. VERSUS COMMISSIONER OF CUSTOMS (GENERAL), MUMBAI [2013 (4) TMI 477 - BOMBAY HIGH COURT]. The Hon’ble High Court of Bombay has, thus held that the limiting scope of appellate remedy in the Regulations governing ‘customs brokers’ is deliberated restriction and that, in such circumstances, the general provision for appeal cannot be resorted to. The judgement of the jurisdictional High Court is binding here. Appeal dismissed. Issues Involved:1. Forfeiture of security deposit under regulation 20 of CHALR, 2014.2. Whether revocation of the CHA license should be imposed.3. Maintainability of the appeal by the licensing authority against its own order.4. Scope of appellate remedy under section 129A of the Customs Act, 1962.Detailed Analysis:1. Forfeiture of Security Deposit under Regulation 20 of CHALR, 2014The case concerns the forfeiture of the security deposit of M/s Kamal Clearing and Forwarding Agency Pvt Ltd under regulation 20 of the Customs House Agents' Licensing Regulations (CHALR), 2014. The Commissioner of Customs (General), New Custom House, Mumbai, ordered the forfeiture but did not revoke the license. This decision was contested by two Chief Commissioners of Customs, who directed the filing of an appeal under section 129D(1) of the Customs Act, 1962, seeking the Tribunal's determination on whether the punishment of license revocation should be imposed.2. Whether Revocation of the CHA License Should Be ImposedThe inquiry authority found breaches of regulations 13(a), 13(d), and 13(e) to be proven and partially proven for regulation 13(o), while dropping the charge under regulation 13(n). The licensing authority concurred with these findings but fully proved the breach of regulation 13(o). Despite these findings, the Commissioner did not find revocation warranted, considering the license had been suspended for over twenty months and instead ordered the forfeiture of the entire security deposit. The Tribunal was asked to review the commensurateness of this decision.3. Maintainability of the Appeal by the Licensing Authority Against Its Own OrderThe respondent was not represented at the hearing but submitted a written statement, indicating that the authority adjudicating the misdeclaration of value declined to impose penalties under sections 114 and 114A of the Customs Act, 1962. The Tribunal noted that disciplinary proceedings against customs brokers are governed by special laws under section 146 of the Customs Act, 1962, and the Regulations, which only allow the customs broker to appeal. The Tribunal cited precedent decisions, including Commissioner of Customs (General), Mumbai v. Mukadam Freight Systems Pvt Ltd, which held that the licensing authority is not envisaged as an appellant under the Regulations.4. Scope of Appellate Remedy Under Section 129A of the Customs Act, 1962The Tribunal referenced the decision of the Hon'ble High Court of Bombay in SR Sale & Co v. Commissioner of Customs (General), Mumbai, which clarified that section 129A of the Customs Act, 1962, does not apply to appeals against orders under the CHALR, 2004. The High Court held that the Regulations constitute a self-contained code, and the general appellate provisions under section 129A do not apply to disciplinary actions against customs brokers. The High Court emphasized that the Regulations specifically provide an appellate mechanism for the licensee, not for the licensing authority.Conclusion:The Tribunal dismissed the appeal, affirming that the limiting scope of appellate remedy in the Regulations governing customs brokers is a deliberate restriction and that the general provision for appeal under section 129A of the Customs Act, 1962, cannot be resorted to by the licensing authority. The judgment of the jurisdictional High Court of Bombay is binding, and thus, the appeal was not maintainable. The order was pronounced in the open court on 06/08/2024.