By TIOL News Service

BANGALORE, NOV 03, 2015: THE appellant was holding a CHA License granted to him in terms of the provisions of the erstwhile Custom House Agent Licensing Regulations, 2004 (CHA Licensing Regulations, 2004). On account of alleged wrong signing of customs documents relating to import of a Pajero Car, their license was suspended for one month with effect from 1.7.2013 along with forfeiture of the security furnished by the said CHA. On completion of the suspension period of one month, the appellant approached the Revenue for renewal of his CHA license on furnishing a fresh security of Rs. 75,000/-. In the meanwhile, the old CHA Licensing Regulations, 2004 were superseded by the new Customs Brokers Licensing Regulations 2013 (CBLR, 2013). In terms of the new provisions of CBLR 2013, the security required to be deposited for a customs broker license was Rs.5 lakhs which was to be provided either by a Bank Guarantee or postal security or by way of National Saving Certificate. When the appellant approached the Revenue for renewal of his license, a dispute arose as to whether the security for an amount of Rs.75,000/-, in terms of the old CHA Licensing Regulations 2004 is required to be given or the appellant is required to give security of Rs.5 lakh in terms of the new CBLR 2013.

However, their license was restored and was held to be valid up to 24.10.2021 subject to clarifications issued by the Central Board of Excise and Customs, New Delhi.

It seems that Board by its letter dated 6.9.2013 clarified that in terms of Regulations 8 of CBLR 2013, a Customs Broker is required to submit security of Rs.5lakh for issuance of suspended license. Accordingly, the appellant was directed by the Commissionerate's Office vide their letter dated 20.9.2013 to submit an additional security of Rs.4.25 lakh along with the revised bond. The said direction of the Commissioner was responded to by the appellant vide his letter dated 3.10.2013 submitting that it is the provision of the old CHA Licensing Regulations 2004 which would be applicable in his case inasmuch as he is not applying for a new license but the request was to restore the suspended license. Thereafter, communications were exchanged between the appellant and the customs and the appellant was repeatedly advised to give the additional security failing which appropriate action would be taken against him. As the appellant did not comply with the said directions and continued to submit that it is the old security amount which would be applicable, his license was further suspended on 26.11.2013 in terms of Regulations 19(1) of the CBLR 2013. After post decisional hearing, the Commissioner vide his Order-in-Original No.30/2013 dated 20.12.2013 ordered for continued suspension, pending completion of the procedure under the new Regulations.

The appellant challenged the order dated 20.12.2013 before the Tribunal, reiterating his view points. The Tribunal vide its Final Order No.20373/2014 dated 10.3.2014 held against the appellant and directed him to comply with the directions of the Commissioner. Accordingly, subsequent to the receipt of the said order of the Tribunal, the appellant complied with the directions of the Commissioner to execute an additional security to the extent of Rs.5 lakhs.

In the meanwhile, the appellant had already been issued a show-cause notice dated 8.1.2014 requiring the appellant to show-cause as to why his license should not be revoked and security furnished by him should not be forfeited and why a penalty should not be imposed upon him. The said show-cause notice culminated into the present impugned order passed by the Commissioner on 13.5.2014, revoking the appellant's customs broker license, forfeiting security in full and further imposing a penalty of Rs.50,000/- upon him in terms of Regulation 18 of the CBLR 2013.

The Tribunal found:

1. the appellant's suspended license for a period of one month was renewed by the Commissioner himself subject to the dispute settlement on the point of security amount.

2. Whereas the appellant was insisting that since his license was issued in terms of the old Regulations requiring security of Rs.75,000/-, the Revenue was of the view that as the same is being renewed after completion of the suspension period, the appellant is required to give security of Rs. 5 lakhs in terms of new CBLR.

3. Lot of correspondences was exchanged between the appellant and the department ultimately leading to passing of an order by the Commissioner vide which license suspension was ordered and continued. The said suspension order was challenged by the appellant before the Tribunal, which did not agree with his view point and held that security of Rs.5 lakhs has to be given by the appellant. In compliance to the order of the Tribunal, the appellant submitted the said security and approached the Revenue for renewal of his license.

4. the reasoning of the adjudicating authority for refusing to renew his license and revoking the same is that the appellant did not honour the directions of the Commissioner for furnishing the security of Rs.5 lakhs in terms of the new Regulations and as such the said action on the part of the assessee amounts to misconduct thus making him misfit for carrying out the work of Customs Broker Licensing.

5. Admittedly, an assessee is entitled to his own view point and is within his rights to challenge the view of the Revenue. This is what exactly the appellant did. He challenged the earlier order of the Commissioner being Order No.30/2013 before the Tribunal, in exercise of his right of appeal granted to every citizen. In fact the earlier order passed by the Commissioner itself, in its preamble, observed that an appeal can be filed before the Tribunal. When the appellant lost before the Tribunal, he furnished the requisite amount of security in terms of the new Regulations.

6. The question is as to whether such conduct of the appellant in not accepting the Revenue's direction and challenging the same before the higher appellate forum can be considered to be a misconduct on his part as Custom Broker License holder so as to revoke his license.

7. The answer to such a question, by any reasonable prudent man would be emphatic "NO". Appellant's license which has already been renewed by Commissioner himself till 2021 cannot be revoked on this sole ground that instead of accepting the directions of the Commissioner, the appellant has chosen to file an appeal before the Tribunal.

8. No merits in the impugned order of the Commissioner revoking the appellant's license and imposing penalty on him.

The order is set aside and the Revenue is directed to immediately restore the appellant's license as he has already fulfilled the conditions imposed upon him by the Revenue and as upheld by the Tribunal.

(See 2015-TIOL-2353-CESTAT-BANG)