By TIOL News Service

MUMBAI, APRIL 14, 2017: REVENUE is in appeal before the Bombay High Court against the order of the CESTAT.

This order of the CESTAT was a Majority decision - 2015-TIOL-558-CESTAT-MUMthat arose due to the difference in opinion between the Member (J) and Member (T).

The facts are -

++ ON   specific information the DRI officials detained three consignments and found that one Shri Dhirubhai Shah is using the CHA licence of the appellant for clearance of the misdeclared goods. On the basis of enquiry report, proceedings were initiated u/r 22 and charges were framed under Regulations 12, 13(a), 13(d), 19(8) of CHALR 2004 against the appellant CHA.

++ After the enquiry report, personal hearing was granted to the appellant by the Commissioner of Customs (General) who thereafter revoked the CHA licence on the premise that the charges levelled have been proved.

++ An appeal was filed by the CHA before the CESTAT and due to a difference in opinion, the following reference was addressed to the third Member -

1. Whether in the facts and circumstances of the case the charges levelled against the appellant under Regulations 13(a), 13(d) and 19(8) of the CHALR, 2004 stands proved or not.

2. If the charges are proved, in that case, the punishment suffered by the appellant is sufficient or not in the facts and circumstances of the case.

The Third Member (T) on reference held -

"6…I agree with Hon'ble Member (Judicial) that the charge of contravention of Regulations 13 (a) and 13 (d) by the appellant CHA is not proved. I agree with Hon'ble Member (Technical) as far as the contravention of Regulation 19 (8) is concerned. However, I am of the considered view that revocation of the CHA licence is not warranted in the facts and circumstances of the case and the punishment suffered of not being able to operate as a CHA for the last two years is sufficient…"

And so, the Majority order was -

"…we hold that revocation of the CHA licence is not warranted in the facts and circumstances of the case and the punishment suffered of not being able to operate as a CHA for the last two years is sufficient…"

We reported this order as - 2015-TIOL-558-CESTAT-MUM.

As mentioned, Revenue is aggrieved and has challenged this order before the Bombay High Court.

After narrating the views expressed by the Members of the Tribunal, the counsel for the Revenue submitted that given the regulations, their nature and the decision which is required to be taken, such finding do raise substantial questions of law.

The High Court was unimpressed and inter alia observed -

+ Once the statement made, based on which the allegation of subletting the licence was held to be proved was not reliable and trustworthy enough, then, the finding of fact that there was no subletting of licence cannot be termed as perverse or vitiated by any error of law apparent on the face of the record.

+ Even, the charge of lack of supervision was not held to be substantiated and proved, by the Member (Judicial). However, the third Member came to the conclusion that the Technical Member's finding that violation of regulation 13(a) and 13(d) is proved, cannot be agreed with, still, there is substance in his finding that there is contravention of regulation 19(8). Thus, the third Member has agreed with the Member (Judicial) on substantive findings. As far as the technical breach and violations are concerned, he has agreed with the Member (Technical).

+ To our mind, the conclusion that the revocation of licence of two years was sufficient punishment is a possible and probable conclusion and that emerges from the record itself. In the circumstances, such conclusion cannot be termed as perverse.

Holding that the Revenue Appeal does not raise any substantial question of law and that the Court cannot re-appreciate the factual findings and come to a different conclusion, the Revenue appeal was dismissed.

(See 2017-TIOL-725-HC-MUM-CUS)