Custom, Excise & Service Tax Tribunal
Pioneer vs Nhava Sheva - I on 6 August, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/87793/18
[Arising out of Order-in-Original No: SG/Misc - 380/2017-18 CIU
JNCH dated 11.07.2018 passed by the Commissioner of Customs
(General), Nhava Sheva.]
Pioneer (Customs Broker) Appellant
versus
Commissioner of Customs, (General)
Nhava Sheva - I ...Respondent
Appearance:
Shri CM Sharma, Consultant for appellant Ms PV Sekhar, Joint Commissioner (AR) for respondent CORAM:
Hon'ble Shri C J Mathew, Member (Technical) Hon'ble Shri Ajay Sharma, Member (Judicial) Date of hearing: 02/08/2018 Date of decision: 06/08/2018 ORDER NO: A/87044/2018 Per: C J Mathew Appeal has been filed against order of Commissioner of Customs (General), JNCH Nhava Sheva dated 11th July 2018 in F No SG/Misc-380/2017-18 CIU JNCH under regulation 15 of Customs Broker Licensing Regulations, 2018 by which M/s Pioneer (11/1915), the appellant, has been prohibited from functioning in Mumbai C/87793/18 2 Customs - Zone II for a period of one month for allegedly having failed in fulfilling obligations devolving on them as customs broker in the handling of goods entered for export vide shipping bill no. 2657612/5.2.2018. It is the contention of the appellant that the immediacy warranting prohibition did not exist as the alleged incident occurred five months before and that no opportunity had been granted to them to be heard in their defence. According to Learned Consultant for appellant, the satisfaction of the Commissioner of Customs is not evident in the order issued to their detriment which alone should suffice to revoke the prohibition.
2. At this stage, Learned Authorized Representative questioned the maintainability of this appeal before the Tribunal and posited three pillars to support this contention. According to her, the impugned order is administrative in nature and, hence, beyond the scope of section 129A of Customs Act, 1962 which, in the context of Commissioner of Customs, is limited to adjudication orders; that the appellate mechanism envisaged in regulation 19 of Customs Broker Licencing Regulations, 2018 is limited to orders of suspension and revocation of licences; that writ remedy alone is available to the broker who is aggrieved by an order of prohibition.
3. Thereupon Learned Consultant for appellant drew attention to a recent decision of the Tribunal in Eastern Clearing and Forwarding Agency Pvt Ltd v. Commissioner of Customs (General) [final order no. A/86472/2018 dated 23rd May 2018 in appeal no. C/85612/18] C/87793/18 3 directing that the order of prohibition be revoked for not having complied with principles of natural justice. Learned Authorized Representative contended that this decision is not binding as the Bench did not have the benefit of earlier orders of the Tribunal in SNM Agency v. Commissioner of Customs (General), Mumbai [2014 (304) ELT 255 (Tri-Mumbai] and Naresh Jaisingh v. Commissioner of Customs (General), Mumbai-1 [2016 (332) ELT 147 (Tri-Mumbai)]; according to her, the outcome of the order cited by Learned Consultant may well have been different and judicial discipline would have required the present appeal to be dismissed in limine.
4. We take note that the Tribunal in re Eastern Clearing and Forwarding Agency Pvt Ltd did consider the order of the Hon'ble High Court of Delhi in Harjeet Singh Johar v. Commissioner of Customs (General) [2017 (353) ELT 33 (Del)] holding that the absence of express provision does not alter the inherent right to be heard and of the Tribunal in Harish Sethi v. Commissoner of Customs (General), New Delhi [2017 (346) ELT 134 (Tri-Del)] which is on record as not having been impressed by the submission of Learned Authorized Representative that appeals against administrative orders are not maintainable. In Premier Shipping Agencies v. Commissioner of Customs [2015 (3125) ELT 27 (Del)], the Hon'ble High Court of Delhi has held that the Tribunal had erred in arriving at its conclusion; in re SNM Agency; not being good law anymore, that precedent urged upon us by Learned Authorized Representative cannot overcome the C/87793/18 4 maintainability approved in re Eastern Clearing and Forwarding Agency Pvt Ltd. In re Naresh Jaisingh, the Tribunal was faced with the appeal of an entity who had failed to be licenced as a customs broker and, not unnaturally, the resort to an appellate mechanism devised for handling aggrieved customs brokers is of no avail unless the threshold of qualification is crossed; an observation in that context by the Tribunal does not assist Learned Authorized Representative on the constraints of appellate jurisdiction. Indubitably, the appellant is a broker. The claim of binding precedent put forth by Learned Authorized Representative does not hold.
5. Across the length and breadth of our vast nation, there is a saying in the vernacular that one can waking up a sleeping person but not a person pretending to be asleep. Convinced as they are by the righteousness of their stands, appellants/respondents fail, on occasion, to appreciate the spirit behind our decisions made in the light of day and in the public eye. On occasions such as this, it behoves us to respond to the prayer of Ajax. We will, therefore, proceed to scrutinize the legal provisions.
6. Customs Act, 1962, as the successor to the erstwhile statutes governing import and export by sea, land and air, not only consolidates these but is, above all, an enactment in pursuance of the conferment of powers by the Constitution on Parliament to levy and collect duties of customs. In the elaborate scheme erected to further that end in relation to goods, section 146 of Customs Act, 1962 is a C/87793/18 5 niche provision for governance of an institution established to facilitate trade. This, therefore, is undoubtedly a special law for a special purpose that is distinct from the rest of the statute.
7. In Commercial Tax Officer v. Binani Cements Ltd [(2014) 8 SCC 319], the Hon'ble Supreme Court has held that '27. ......Alternatively, it can be said that where a Statute contains both a General Provision as well as specific provision, the later must prevail.
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29. It is well established that when a general law and a special law dealing with some aspect dealt with by the general law are in question, the rule adopted and applied is one of harmonious construction whereby the general law, to the extent dealt with by the special law, is impliedly repealed. This principle finds its origins in the latin maxim of generalia specialibus non derogant, i.e., general law yields to special law should they operate in the same field on same subject. (Vepa P. Sarathi, Interpretation of Statutes, 5th Ed., Eastern Book Company; N. S. Bindra's Interpretation of Statutes, 8th Ed., The Law Book Company; Craies on Statute Law, S.G.G.Edkar, 7th Ed., Sweet & Maxwell; Justice G.P. Singh, Principles of Statutory Interpretation, 13th Ed., LexisNexis; Craies on Legislation, Daniel Greenberg, 9th Ed., Thomson Sweet & Maxwell, Maxwell on Interpretation of Statutes, 12th Ed., Lexis Nexis)'
8. It is, thus, clear that the empowerment to frame Regulations under section 146(2) of Customs Act, 1962 having been availed of by the Central Board of Excise & Customs to attach appeals to an existing appellate mechanism established in the statute, the provisions of section 129A of Customs Act, 1962 cease to be the fount of jurisdiction for the purposes of the Regulations. With that deemed repeal of section 129A of Customs Act, 1962 in relation to licenced brokers, the labelling of an order of prohibition as other than adjudication order will not exclude the appellate jurisdiction of the Tribunal. Too much significance should not be attributed to the C/87793/18 6 reference to section 129A of Customs Act, 1962 in regulation 19. It is akin to attachment of a railway wagon at a wayside station for detachment at another wayside station; that wagon does not become the train which has a source and destination of its own just as the attached wagon has.
9. Undoubtedly, Regulation 15 of Customs Broker Licensing Regulations, 2018 is silent on the redressal available. There is no provision for representation to higher executive authority. There is no oversight by some other executive agency. We are conscious of the decision of the Hon'ble Supreme Court in Shah Babulal Khimji v. Jayaben D. Kania [(1981) 4 SCC 8] that '151... A right of appeal is a creature of the statute. A litigant does not have an inherent right to prefer an appeal against against an order unless such a right is conferred on the litigant by law.' Though regulation 19 of Customs Broker Licencing Regulations, 2018 specifies that a customs broker may seek relief in appeal to the Tribunal against orders under regulation 16 or 17 which, according to Learned Authorized Representative, excludes appeals against prohibition under regulation 15, when read with the power to frame regulation vested by section 146 (2) of Customs Act, 1962, it is anathema that authority conferred by statute can even be claimed to be capable of being exercised without any accountability or redressal. If section 146(2), the parent provision, is perceived as restricting appeals to the specified detriments of suspension or revocation of licence, surely the insinuation of the third detriment, as it undoubtedly is, of C/87793/18 7 prohibition, should conversely not have found a place in the Regulations without specific enablement in law. If it is claimed that the generality of section 146 (2) of Customs Act, 1962 condones the presence of the third detriment, the existence of remedy cannot, for similar reasons, be denied. We would thus follow that which the Hon'ble Supreme Court laid down in Union of India v. KP Joseph [(1973) 1 SCC 194] '10.... It is because an administrative order can abridge or take away rights that we have imported the principle of natural justice of audi alteram partem into this area.'
10. Whether the omission of prohibition in regulation 19 was deliberate or by oversight, the creation of the third detriment, whether within the permissible empowerment of Central Board of Excise and Customs or not, suffices to approve of remedy. If the lack of remedy were to be upheld, we would be abetting in perpetuation of unbundled executive power without any accountability and it goes against our grain to be accomplices in such a transgression of the principles of natural justice. The conjunction of the three detriments cannot be lost sight of. All of them flow, inter alia, from obligations that are cast upon customs brokers and enumerated in regulation 10 of Customs Broker Licencing Regulations, 2018. These are not intended as mutually exclusive detriments. That suspension is a prelude to C/87793/18 8 proceedings for revocation is not in doubt and that prohibition does carry with it the potential of suspension is explicitly acknowledged. Most importantly, the odium of detriment pervades all three. The sole appellate mechanism acknowledged in the Regulations is the Tribunal and, in the absence of any alternative, the Tribunal is the appropriate appellate remedy. With the affirmation of jurisdictional competence, we now turn to submission on the merits.
11. Learned Consultant claims support from the decision of the Hon'ble Supreme Court in Assistant Collection of Customs and others. v. Charan Das Malhotra [1983 (13) ELT 1477 (SC)] and of the Hon'ble High Court of Delhi in Harjeet Singh Johar v. Commissioner of Customs (General) [2017 (353) ELT 33 (Del)] to sustain the proposition that any detriment contemplated in a statute would be invalid unless qualified by an opportunity for the aggrieved entity to be heard in his defence. It is clear from the records that such opportunity has not been afforded to the appellant. That a representation against the prohibition would meet consideration has not even been alluded to in the impugned order. These are grave and irreparable lacunae.
12. At this stage. Learned Authorized Representative contends that insistence upon notice and hearing before invoking regulation 15 of Customs Broker Licencing Regulations, 2018 would impede the immediate reaction from the head of a customs house that may be warranted in certain crises. She relies on the decision of the Hon'ble C/87793/18 9 High Court of Bombay in SR Sale & Co v. Union of India [2013 (296) ELT 289 (Bom)] and of the Hon'ble High Court of Rajasthan in Pinkcity Logistics Ltd v. Commissioner of Customs [2015 (320) ELT 241 (Raj)]. We are entirely in agreement with this; it is not our intention to substitute the satisfaction on the part of the Commissioner as specified in the Regulations with our own. To do so would, in our opinion, travel beyond the object of the law for satisfaction is neither definable nor estimable. We are also conscious that the Hon'ble High Court of Bombay, in Commissioner of Customs (General) v. Worldwide Cargo Movers [2010 (253) ELT 190 (Bom)], has deliberated upon and articulated the scope of appellate intervention thus '28. In our view, the Tribunal has committed a grave error in interfering with the decision of a domestic authority. In a departmental proceeding one has to see whether the principles of natural justice are followed and the findings are justified from material on record. Once both these aspects are satisfied if an outsider Tribunal interferes, its findings and order will be improper and perverse which is what has happened in the present case. Similarly when one comes to the disciplinary measures, one must not lose sight of the fact that the appellant-Commissioner of Customs is responsible for happenings in the Customs area and for the discipline to be maintained over there. If he takes a decision necessary for C/87793/18 10 that purpose, the Tribunal is not expected to interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or his employees. The decision is best to be left to the disciplinary authority save in exceptional cases where it is shockingly disproportionate or mala fide. That is not the case here.
29. In the circumstances, we allow Customs Appeal No. 37 of 2006 filed by the appellant-Commissioner of Customs since the CESTAT was not justified in setting aside the revocation of the CHA licence in the facts and circumstances of the case and on the material on record. The order of the CESTAT setting aside the order of the appellant-Commissioner of Customs was clearly perverse in law. Appeal No. 37 of 2006 is, therefore, allowed. The order dated 4-4-2006 passed by the CESTAT is set aside and the order dated 17-1-2006 passed by the appellant-Commissioner of Customs is restored.'
13. We are clear in our minds that, once the requisites of law and principles of natural justice are not found wanting in an order under the Regulations, no authority - appellate, executive or oversight - should interfere in the operational functioning of a customs house. In disposal of this appeal, our scrutiny shall be limited to conformity with the law and compliance with principles of natural justice in the impugned order.
C/87793/18 11
14. The impugned order makes no express mention of satisfaction that prohibition was necessary in the said circumstances. On the contrary, the a priori conclusion appears to be mere replication of an investigative opinion - not of the Commissioner - and there is a certain thriftiness of expression that implies lack of consideration of the whole. The lapse of time between the incident and prohibition erases the immediacy that is a pre-requisite for resort to the detriment. The impugned order has all the appearances of what an earlier generation would have characterized as 'roneostated'; we find that the want of satisfaction is far too glaring for us to gloss over in the garb of administrative expediency.
15. It would also appear that the Commissioner is not adequately cognizant of the limits of the prohibitory power vested in him. Prohibition is to be imposed for non-fulfillment of obligation in carrying out functions in a section (or sections) of the customs station. And the prohibition is to be restricted to that sections (or sections) of the customs station. It cannot extend to the entire zone as the impugned order does. Not only is this a clear example of lack of application of mind to the circumstances of alleged non-fulfillment but also a clear demonstration of overreach beyond the limits of empowerment. The correct implementation of this provision may require the authority concerned to obtain from archival record a comprehension of the structural division of customs houses.
C/87793/18 12
16. In view of the legal issues addressed supra and the facts as laid out before us, we set aside the order of prohibition for failing to comply with the limitation placed on exercise of power by the Commissioner of Customs under regulation 15 of Customs Broker Licensing Regulations, 2018. Learned Authorised Representative is directed to serve a copy of the order on the respondent Commissioner immediately to give effect to the order.
(Pronounced in Court on 06/08/2018)
(Ajay Sharma) (C J Mathew)
Member (Judicial) Member (Technical)
HK