Custom, Excise & Service Tax Tribunal
M/S Intercontinental Cargo Services vs Commissioner Of Customs, New Delhi on 10 April, 2012
CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL,
West Block No. 2, R.K. Puram, NEW DELHI
COURT No. III
Customs Appeal No.194 of 2008
Date of Hearing : 16.01.2012.
Pronounced on : 10.04.2012
[Arising out of Order-In-Appeal No.VIII(H)/13/222/89/1885, dated 10.10.2007 issued by Commissioner of Customs (Import & General), New Delhi]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
Honble Mr. D.N.Panda, Judicial Member
Honble Mr. Rakesh Kumar, Technical Member
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s Intercontinental Cargo Services Appellants
Versus
Commissioner of Customs, New Delhi Respondent
Coram: Honble Ms. Archana Wadhwa, Judicial Member Honble Mr. D.N.Panda, Judicial Member Honble Mr. Rakesh Kumar, Technical Member Present for the Appellants Shri Krishna Kant, Adv.
Present for Respondent Shri B.K.Singh, JCDR, Shri S.K.Panda, JCDR and Shri R.K.Varma, DR Order No._______________ Dated :___________ Per Ms. Archana Wadhwa:
The issues which stands referred to the Larger Bench are as follows :-
(a) Whether the appeal against the order of Commissioner of Customs in respect of rejection of application for renewal of license under Regulation (11) of CHA 2004 would lie before the Tribunal
(b) Whether CHA may avail the remedy against the order of rejection of application for renewal of license under sub-regulation (5) of Regulation (9) of the said Regulation.
2. As per facts on record, the appeal stands filed by the appellants against the order of Commissioner vide which he has rejected the appellants application for renewal of CHA license under Regulation 11(2) of Customs House Agents Licensing Regulations, 2004. The referral Bench has taken note of the Tribunals decisions in the case of Sri Shipping Services vs. CC, Coimbatore reported in 2006(202)ELT543(Tri.-Chennai) (Final Order) as also in the case of Arun Kumar Sikka vs. CC, New Delhi reported in 2006(201)ELT309(Tri.-Del.) wherein it was held that the order passed by the Commissioner rejecting license for renewal of CHA is appealable before the Tribunal. The referral Bench has also taken note of the Tribunals decision in the case of G.P.Jaiswal vs. CC, Lucknow reported in 2008(226)ELT707(Tri.-Del.) wherein Tribunal after observing that there is no provision for filing appeal against rejection of renewal in terms of the provisions of Regulation 11, the Bench rejected the application for implementation of Tribunal orders in terms of Rule 41 of CEGAT Procedure Rules. As such the referral Bench observed that as there are two streams of decisions taking contraviews, the issue should be resolved by the Larger Bench.
3. We have heard Shri Krishna Kant, ld. Advocate appearing for the appellants and Shri S.K.Panda, JCDR appearing for the Revenue. Briefly touching the submissions made by both the sides, we note that the contention of the ld. Advocate is that the CHA Regulations stands framed u/s 140 of Customs Act. The Tribunal has the jurisdiction to hear appeals u/s 129A of the said Act and wherever the appeals are not to be heard by the Tribunal, specific exclusion stands provided under the Act itself. There is no exclusion provided in the Act debarring the Tribunal from hearing the appeal against the rejection of renewal of CHA license. He submits that regulations are sub-servient to the Act and where Act does not debar filing the appeal against such rejection order, the Tribunals jurisdiction cannot be taken away by referring to the regulations wherein no specific provision stand provided for filing the appeal. As such he submits that the Tribunals decision in the case of Sri Shipping Services as also in the case of Arun Kumar Sikka holding that the appeal against rejection of renewal of CHA license would lie to the Tribunal, should be adopted as the correct declaration of law.
4. Countering the above argument, ld. JCDR appearing for the Revenue submits that no doubt the regulations are sub-serviant to the Customs Act but the provisions of section 129(A) to the Customs Act are required to be examined. He submits that clause-a of the said section provides for filing the appeal against the order passed by the Commissioner as an adjudicating authority. The said expression is defined u/s 2(1) of the Customs Act, 1962 as adjudicating authority means any authority competent to pass any order or a decision under this Act, but does not include Board, Commissioner(Appeals) or the Appellate Tribunal. Elaborating his argument, he submits adjudication means make a formal judgement or a decision about a problem or disputed matter. As such an order amounts to adjudication if it decides some dispute between the two sides. In other words, there must be a lis between the two parties which is to be decided by the prescribed authority. In as much as Commissioner of Customs passes various administrative or executive order, all orders cannot be held to be passed as adjudicating authority. The order rejecting the renewal application cannot be said to be an order passed by the adjudicating authority in as much as there was no lis between the appellants and the Revenue. The appellants cannot claim renewal of CHA license as a matter of right. Giving example of an importer clearing his goods, he submits that if there is a dispute about the rate of duty to be applied, the same can be said to be a lis between the two parties. Giving of a license or renewal of license cannot be the result of any lis relating to any dispute on any legal issue between the CHA and Revenue. In as much as the CHA is an agent appointed by the Commissioner to assist the importers and he cannot claim the continuation of his license by way of renewal as a matter of right. He accordingly prays that decision of the Tribunal in the case of G.P.Jaiswal was correct decision.
5. We have considered the submissions made by both the sides. Ld. Advocate appearing for the appellants fairly agrees that there is no express provision of filing the appeal in respect of rejection of renewal in terms of Regulation 11(2) of the Customs Excise Agent Regulations, 2004. He also agrees that the other provisions of the said Regulations provide for filing of appeal to the Tribunal. It is seen that there is a specific provision for filing of appeal to the Tribunal under Regulation, 23(8) against orders of suspension or rejection of license but there is no such provision in the case of rejection of renewal of license. The period of license is fixed under Regulation 12 and on expiry of the same license can be renewed under Regulation 11. We find that the Tribunal in the case of G.P.Jaiswal while holding against the appellants have observed as under :-
11. The fact that there is specific provision for appeal before the Tribunal against order of suspension or revocation of licence, under Regulation 23(8) which shows that wherever the framers of Regulations wanted that there should be a right of regular appeal before the Tribunal with respect to the job conditions of CHAs, such remedy was provided. It may be observed here that any order revoking or suspending the licence is likely to visit the person with evil consequence; it is also likely to cast some stigma on him, and therefore, the framer of the Regulations deemed it proper to make provision for regular appeal against such an order. However, as regards rejection of licence, including rejection of renewal application, no person can claim any vested right of appointment as CHA; he can only claim right of consideration. There was, therefore, an apparent justification to provide for a lesser remedy by way of representation against any order refusing licence or rejecting the renewal application before the Chief Commissioner. May be, as seen above, the 2004 Regulations provide for regular appeal against such orders, but that is a policy matter. Legally treating orders of suspension/ revocation of licence and non-renewal of licence on different footings was sustainable. As observed above, right of appeal is a creature of statute and there being no provision under which a CHA could file appeal before this Tribunal against order rejecting the renewal application, the appeal cannot be said to be maintainable.
6. At this stage, we find that the issue stands decided by two judgements of Honble High Court of Bombay in the case of A.S.Vasan & Sons reported in 2009(238)ELT217(Bom.) and by Honble High Court of Kolkata in the case of M.Dutta Agency reported in 1998(101)ELT581(Cal.). The Honble High Court in the case of A.S.Vasan & Sons while dealing with an identical issue held as under:-
7. If we read Regulation 9 with Regulation 11 and even if an application for renewal is treated as a fresh licence, the Regulations permitted appeal only where an application is rejected under Regulation 9(3). Regulation 11 does not so provide. Secondly, under Regulation 9, the Commissioner of Custome may reject an application for the grant of licence to act as Customs House Agent if the applicant is involved in fraud or forgery, or any criminal proceedings are pending before any court of law against or he has been convicted in any court of law. These are, therefore, the considerations for the grant of a new licence based on the first application for CHA licence.
8. On the other hand, so far as Regulation 11(2) is concerned, it provides for renewal and while considering renewal, what has to be considered is, if the performance of the licensee is found to be satisfactory in terms set out under Regulation 11(2). These are the requirements after the licence has been granted. Application for grant of licence and for revocation of that licence are distinct and different. No appeal is provided under Section 11 whereas an appeal is provided under Regulation 9(4) in those cases, where an application for licence is rejected under regulation 9(3). We are, therefore, clearly of the opinion that no appeal lis against the order of the Commissioner rejecting an application for renewal. It may be mentioned that in case of Customs House Agent licence, our attention was invited to the judgement of Calcutta High Court in M.Dutta Agency 1998(101)ELT581(Cal.). It was contended before Calcutta High Court that the appeal would lie against the refusal to renew CHA licence. Considering the language of Section 129A(1)(a) of Customs Act, 1962, the learned Judge held that an appeal is provided against the suspension or revocation but not for refusal to renew CHA licence. We are clearly of the opinion that no appeal lis against the order rejecting an application for renewal. In absence of any other remedy it is open to this Court to exercise its extraordinary jurisdiction in case where an application for renewal is rejected. Similarly, the Honble High Court of Calcutta in the case of M.Dutta Agency while dealing with the objection raised by the Revenue that since the order made before the Honble High Court was an order rejecting renewal of license, held that since order of the Customs authorities rejecting renewal of license does not come under various clauses of CHA Regulation Act, no appeal lies before the Tribunal for such refusal to renew CHA license.
7. As we find that the issue referred to the Larger Bench stands concluded by the Honble High Court of Bombay as also Honble High Court of Calcutta in the above referred two decisions, no contra-decision stands shown to us by the appellants, we are bound by the above decisions of the High Courts to say that no appeal lies to Tribunal against the order of Commissioner of Customs rejecting the application for renewal of license under Regulation 11 of the CHA Regulations, 2004. As such the issue referred to the Larger Bench is answered accordingly.
8. The second question referred to the Larger Bench as to whether the Customs House Agent can challenge such rejection of renewal of license before Chief Commissioner of Customs in terms of Regulations 9(5) of Customs House Agent Act, 2004.
9. We find that the said Regulation 9 relates to grant of license. clause-(3) of Regulation 9 is to the effect that a Commissioner may reject an application for the grant of license but if the applicant is found involved in fraud or forgery, or any criminal proceedings are pending before any court of law against or he has been convicted in any court of law, the applicant can file an appeal before the Chief Commissioner within a period of 30 days from the communication of such order. As such, it is seen that when a fresh application for issuance of license is filed and the same stands for issuance and the same stands rejected by the Commissioner, there is a specific provision for filing an appeal before the Chief Commissioner of Customs, in terms of clause 5 of Regulation 9.
Regulation 11 provides the duration of license so granted under Regulation 9 to be a period of ten years from the date of issue. The CHA license holder is at liberty to file an application before the Commissioner before the expiry of validity period for renewal of the license for a further period of ten years from the date of expiry. The fee for renewal of license as also for grant of a fresh license is Rs.5,000/-.
10. The renewal of license is a continuation of license earlier granted to the CHA. However, if CHA does not file an application for renewal and the license granted to him is expired, he is free to make a fresh application for grant of a new license. If that be so and such application for grant of new license is rejected by the Commissioner, he is within his rights to challenge the same before the Chief Commissioner. As such discrimination cannot be made on the ground that the application was for renewal of license and not for grant of fresh license. In our views, the rejection of renewal of license cannot be held to be a remediless act whereas refusal to grant a new license enjoys a remedy of challenging the same before Chief Commissioner. Both the rejections should be placed on the same platform as the result of both is the same, i.e., denial to the person to Act as CHA on expiry of his license. The only difference is that renewal application is continuation of previous licence and procedure stands enacted for the convenience of the CHA who already have the license. As such in our views, renewal of license would enjoy the same remedy as provided under Regulation 9(5) of the CHA Regulation. Such rejection can be challenged before Chief Commissioner.
11. In view of our foregoing discussion, questions referred to Larger Bench are answered as follows :-
(a) No appeal lies before the Tribunal against the order of Commissioner of Customs in respect of rejection of an application for license under Regulation 11 of CHA, 2004.
(b) If CHA is aggrieved with such rejection of renewal, he can challenge the same before Chief Commissioner or Chief Commissioner of Customs & Excise as provided under Regulation 9(5) of the CHA Regulation.
12. Registry is directed to place the file before the Regular Bench for passing of the order.
(Pronounced in the open court on 10.04.2012) (Archana Wadhwa) Judicial Member (D.N.Panda) Judicial Member (Rakesh Kumar) Technical Member RK-I 2