Order Date – 23 June 2023

Parties: M/s. VNMS Ayyachamy Nadar & Bros. Vs The Commissioner of Customs

Facts – 

• The Appellants, M/s. VNMS Ayyachamy Nadar & Bros., was issued with a show cause notice proposing to revocation of the CHA Licence along with forfeiture of security deposit in terms of Regulation 20(1) ibid, consequence to an investigation which revealed that some few individuals for fraudulent exports of low quality shoe uppers, etc., thereby availing ineligible duty drawback without realization of any export proceeds.
• The Commissioner of Customs has ordered revocation of CHA Licence of the appellant and also ordered forfeiture of security deposit of Rs.75,000/-.

Issue – 

• Whether the revocation of CHA licence and forfeiture of security deposit are according to law?

Order – 

• The Tribunal observed that there are two inquiry / investigation reports on record - one as early as in 2010 by the DRI authorities, n. If this is considered as the inquiry report, then, the order of revocation vide impugned Order-in-Original which was passed in 2013 is clearly beyond the time-limit prescribed under the statute.
• If the second / other inquiry report by the Assistant Commissioner is considered, which is in November 2012, then, again, the revocation order vide impugned Order-in-Original in March 2013 is also beyond the prescribed ninety-day time limit, which is against the principles underlying the statute.
• The sole basis for the revocation is stemming out of the second inquiry report wherein, apparently, only statements are relied upon, which are no doubt uncorroborated. No other incriminating documentary evidence is made available on record nor has the outcome of investigation been placed on record by the Revenue to implicate or even suggest the active role of the appellant.
• The impugned order has been passed beyond the time period allowed under the Regulations and therefore, the order as well as the consequential revocation is held to be not in accordance with law, for which reason the impugned order insofar as it relates to the revocation stands set aside.
• since there is no specific allegation as to the involvement of the appellant the forfeiture of entire security deposit is disproportionate. Thus it proper that a nominal amount of Rs.10,000/- (Rupees Ten Thousand only) could be forfeited out of the security deposit, but not the entire amount of Rs.75,000/-. Accordingly, the impugned order to the extent of forfeiture of security deposit is modified to the above extent.