Madras High Court
Commissioner Of Central Excise ... vs M/S.Aren Shipping Agents (P) Ltd on 20 June, 2016
Author: S.Manikumar
Bench: S.Manikumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20.06.2016
CORAM:
THE HONOURABLE MR.JUSTICE S.MANIKUMAR
and
THE HONOURABLE MR.JUSTICE D.KRISHNA KUMAR
C.M.A.No.2969 of 2010
M.P.No.1 of 2010
Commissioner of Central Excise (Exports),
Custom House,
No.60, Rajaji Salai,
Chennai 600 001. .. Appellant
versus
1. M/s.Aren Shipping Agents (P) Ltd.,
No.92 (Old No.225), 1st Floor,
Linghi Chetty Street,
Chennai 600 001.
2. Customs, Excise & Service Tax Appellate Tribunal,
South Zonal Bench, Shastri Bhavan Annexe, 1st Floor,
No.26, Haddows Road, Chennai 600 006. .. Respondents
Prayer: Civil Miscellaneous Appeal is filed under Section 35G of Central Excise Act, 1944, against the Final Order No.838 of 2009, dated 14.07.2009, on the file of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Chennai 600 006.
For Appellant : Mr.Sundareswaran
For 1st Respondent : Mr.S.Murugappan
For 2nd Respondent : Tribunal
JUDGMENT
(Judgement of this Court was made by S.MANIKUMAR, J.) Civil Miscellaneous Appeal is directed against the Final Order No.838 of 2009, dated 14.07.2009, passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Chennai 600 006, dismissing the appeal filed by the revenue.
2. Facts leading to the appeal are that M/s.Aren Shipping Agents Pvt. Ltd., Chennai, 1st respondent herein, has applied for renewal of licence. They were issued with a main licence at Visakapatnam and their branch licence was registered with Chennai Customs and the same had expired on 16.03.2006. The said Customs House Agent (In short CHA) has sought for renewal of licence. On examination, it was found that they were allowed to operate as CHA in Chennai Customs under Regulation 10(2) of the Customs House Agents Licensing Regulations (CHALR), 1984, on the basis of CHA licence issued to them, under Regulation 10(1) of the said Regulations, by Visakapatnam Customs.
3. The 1st respondent herein has submitted a letter, dated 14.06.2006, narrating their claim for renewal of their licence. In support of the claim, they relied on a Tribunal's decision in M/s.Auro Trans Maritime Services Pvt. Ltd., v. Commissioner of Customs, Chennai reported in ELT 130 (Tribunal), wherein, it has been held that the branch CHA licence issued under Regulation 10(2) of the CHALR, 1984, has to be treated as an independent licence and therefore, the same has to be adjudged on its own merits. They also submitted that there was no allegation of mala fide or fraud against the CHA and prayed for renewal.
4. After considering the oral submissions and the norms prescribed to measure the performance of a CHA, when an application is filed for renewal of CHA licence, the Commissioner of Customs(Seaport-Import), on 24.07.2006, ordered, as hereunder:
Applying the ratio laid down by the Hon'ble CESTAT in the Auro Trans Case, and also after analysis of their performance indicators for Chennai, it therefore emerges that the CHA/Applicant is very much eligible for renewal of their licence issued under Regulation 10(2) of the erstwhile CHALR, 1984 read with Public Notice No.59/94, dated 17.05.94, subject to fulfillment of other procedural requirements that may be required to be complied with as per Customs Act, 1962 and the Rules and Regulations made thereunder.
5. In exercise of the powers conferred upon the Committee of Chief Commissioners, under Section 129(D)(1) of the Customs Act, 1962 r/w. Notification No.46/2005 Customs (NT), dated 08.06.2005, the said Committee has examined the records of the proceedings, in which, the Commissioner of Customs (Seaport Import), Chennai, has passed an Order-in-Original No.5349/2006, dated 24.07.2006 and by observing that the abovesaid order of the Commissioner (Seaport Import), Chennai, is not proper and deserved to be reviewed, ordered as follows:
3. On examination of the above Order in Original, it appears that the above order of the Commissioner (Seaport Import), Chennai, is not proper and merits review in view of the following:
(a) the ratio laid down by the Hon'ble CESTAT in the Auro Trans case would be applicable only in cases where the issue of renewal had come up before the enactment of the CHALR, 2004 and
(b) in terms of the clarifications issued under Regulation 10, Sl.No.2 of Annexure I of Circular No.42/2004-Cus, dated 10.06.2004 in F.No.502/4/2004-Cus.VI (PL.I) of the CBEC, MoF, for licences issued under regulation 10(2) of CHALR 1984 and renewed for 5 years just before issue of CHALR, 2004, renewal can be done only till the validity period of the main licence.
4. The Committee, therefore, under the provisions of Sec. 129(D)(1) of the Customs Act, 1962, directs the Commissioner of Customs, Chennai to apply to the Customs, Excise and Service Tax Appellate Tribunal, Chennai, for determination of the following points arising out of the impugned order of the Commissioner of Customs (Seaport Import):
(i) Whether, in the facts and circumstances of the case, the order of the Commissioner is legal and proper and whether the said order should be set aside.
6. Thereafter, the Commissioner of Customs (Seaport-Import), Chennai, has filed an appeal, under Section 129(D)(4) of the Customs Act, 1962, before the CESTAT, Chennai. Going through the order and placing reliance on the decisions in A.S.Vasan & Sons v. Commissioner of Customs (General), Mumbai [2008 (230) ELT 374] (Mum.)], M.Dutta Agency v. Commissioner [1998 (1) LCX 77 (Cal.)], P.Cawasji and Co's case [2000 (119) ELT 606] and G.P.Jaiswal's case [2008 (226) ELT 707], the CESTAT, Chennai, on 14.07.2009, has passed the following orders, 2. I have heard both sides. It has already been held by the Tribunal in the case of A.S.Vasan & Sons v. Commissioner of Customs (General), Mumbai [2008 (230) ELT 374], that an order relating to renewal of CHA licence is administrative in nature and not a quasi-judicial order against which an appeal is maintainable before the Tribunal. The Tribunal has held that an appeal does not lie before the Tribunal following the judgment of the Hon'ble Calcutta High Court in M.Dutta Agency v. Commissioner [1998 (1) LCX 77] and Tribunal's decision in P.Cawasji and Co [2000 (119) ELT 606] and G.P.Jaiswal [2008 (226) ELT 707]. The Tribunal's order in A.S.Vasan & Sons cited supra has been upheld by the Bombay High Court as seen from 2009 (238) ELT 217.
3. Following the ratio of the above decisions and also following the ratio of the Tribunal's order in Tass Clearing Service (P.) Ltd., v. Commissioner of Customs, Hyderabad 2009 (238) ELT 671, I reject the appeal of the Revenue as not maintainable before the Tribunal.
7. Being aggrieved by the aforesaid order, the Commissioner of Customs (Exports), Chennai, has filed the instant Civil Miscellaneous Appeal, on the following substantial questions of law:
(1) Whether the order of CESTAT in the matter of CHALR, 2004 under the Customs Act, 1962, considering it as an administrative matter is correct as per law?
(2) Is not the order of the tribunal passed in Auro Trans case merged with the order of this Hon'ble Court passed in W.P.No.5678 of 2010 and cannot be a precedent?
8. Supporting the above substantial questions of law and inviting the attention of this Court to a decision of Calcutta High Court in Assistant Collector of Customs for Appraisement v. Soorajmull Nagarmull reported in AIR 1952 Cal 656 = 56 CWN 453 = 2000 (125) ELT 328 (Cal.), Mr.Sundareswaran, learned counsel appearing for the appellant submitted that exercise of power by the Commissioner of Customs (Seaport Import), in the matter of renewal of licence is quasi-judicial in character and therefore, when a decision or order is made, as an adjudicating authority, a such decision or appeal, could be assailed by way of an appeal, under Section 129(D)(1) of the Customs Act, 1962, to CESTAT, Chennai. He also submitted that even if there is no need for the presence of two parties, for adjudicating an issue and if an authority acts quasi-judicially to decide the right of an individual, an appeal can be preferred to the Commissioner of Customs (Appeal). In this context, he also referred to few paragraphs of the judgment in Soorajmull Nagarmull's case (cited supra), more particularly, Paragraphs 88 and 89, which are reproduced hereunder:
88. The Customs authorities are not a 'court' in the strict sense of the term. The question is - did they act quasi-judicially. If they did, certainly, the writ may go.
89. This is the main point debated before us. The difference between an executive and a judicial or a quasi judicial act has been pointed out by the Supreme Court in the Province of Bombay v. K.S.Advani and Ors. (1950) SCR 621 Kenai, C. J., after a review of the cases, said at p. 633:
"It seems to me that the true position is that when the law under which the authority is making a decision, itself requires a judicial approach, the decision will be quasi-judicial. Prescribed forms of procedure are not necessary to make an inquiry judicial, provided in coming to the decision the well recognised principles of approach are required to be followed. In my opinion, the conditions laid down by Slesser, L. J., in his judgment correctly bring out the distinction between a judicial or quasi-judicial decision on the one hand and a ministerial decision on the other"
9. Inviting the attention of this Court to Paragraph 4 of the order of the Commissioner of Customs, dated 24.07.2006 and the issue adjudicated, as to whether, the 1st respondent was entitled to get the licence issued by the Commissionerate, Chennai, renewed under Regulation 10(2), irrespective of the fact that the original licence at Vizag Customs had not been caused to be renewed and the findings rendered by the Commissioner of Customs, dated 24.07.2006, learned counsel for the appellant reiterated that when the 1st respondent was given a personal hearing and oral submissions were made on the plea of renewal of licence, any order or decision passed by the Commissioner of Customs (Seaport-Import), is appealable to CESTAT, Chennai, under the provision of Section 129(B) of the Customs Act, which reads as follows:
129B. Orders of Appellate Tribunal. (1) The Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary.
(1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing :
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.
(2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub- (1) and shall make such amendments if the mistake is brought to its notice by the Commissioner of Customs or the other party to the appeal :
Provided that an amendment which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the other party shall not be made under this sub-, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.
(2A) The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed :
Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub- (1) of 129A, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order :
Provided further that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated.
(3) The Appellate Tribunal shall send a copy of every order passed under this to the Commissioner of Customs and the other party to the appeal.
(4) Save as otherwise provided in 130 or 130E, orders passed by the Appellate Tribunal on appeal shall be final.
10. Per contra, inviting the attention of this Court to Regulations 6 to 11 and 21 to 23 of the Customs House Agents Licensing Regulations (CHALR), 1984, applied to the facts of the case, Mr.S.Murugappan, learned counsel appearing for the 1st respondent submitted that grant of licence is an administrative order. He also submitted that renewal of licence is as good as, grant of fresh licence and therefore, whatever conditions required to be complied with, by the 1st applicant for grant of licence, equally applies for renewal of licence and therefore, when there is no substantial difference between a fresh licence and renewal, the order of the Commissioner of Customs (Seaport-Import), dated 24.07.2006, granting renewal of licence, should also be treated only as an administrative order and that the correctness of the same, cannot be adjudicated before the CESTAT, Chennai, by way of an appeal, under Section 129(D) of the Customs Act.
11. Inviting the attention of this Court to Regulation 22(8) of the Customs House Agents Licensing Regulations (CHALR), 2004, dealing with the procedure for suspending or revoking licence, under Regulation 20, learned counsel for the 1st respondent further submitted that as per the abovesaid rules, if any Customs House Agent is aggrieved by any decision or order passed under Regulation 20 or sub-regulation (7) of regulation 22, he may prefer an appeal under Section 129A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under sub-Section (1) of Section 129 of the Act. In this context, he also draw the attention of this Court to Regulation 20, which deals with suspension or revocation of licence and the same is extracted hereunder:
(1) The Commissioner of Customs may, subject to the provisions of regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely :-
(a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under regulation 10;
(b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else;
(c) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or any where else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station.
(2) Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, within fifteen days from the date of receipt of a report from investigating authority, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated.
(3) Where a licence is suspended under sub-regulation (2), notwithstanding the procedure specified under regulation 22, the Commissioner of Customs may, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs House Agent whose licence is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs House Agent. According to the learned counsel appearing for the 1st respondent, the power exercised by the Commissioner of Customs, for suspending or revoking the licence, under Regulation 20, is quasi-judicial nature, whereas, the grant of licence or renewal is administrative.
12. Placing reliance on the order of the Calcutta High Court in M.Dutta Agency v. Commissioner of Customs reported in 1998 (101) ELT 581, learned counsel for the 1st respondent submitted that when an application for renewal is rejected, Customs Act, 1962, does not provide for an appeal, but the only remedy available to the licencee is to invoke the extraordinary jurisdiction of this Court, under Article 226 of the Constitution of India. Conversely, when renewal is granted, the appellant cannot approach the CESTAT, by filing an appeal, under Section 129(B) of the Customs Act.
13. Learned counsel for the 1st respondent further submitted that currently, while considering the application for renewal, if the competent authority arrives at any prima facie conclusion, as to why, renewal should not be rejected, issue is noticed and thus, the procedure for considering the renewal application, has become a quasi-judicial.
14. Reiterating that the order of renewal is an administrative order, learned counsel for the 1st respondent submitted that the well considered decision of CESTAT, Chennai, does not require any interference in this appeal, as no substantial question of law is involved. For the abovesaid reasons, he prayed for dismissal of the appeal.
Heard the learned counsel for the parties and perused the materials available on record.
15. Before adverting to the rival submissions, this Court deems it fit to consider the relevant Regulations. Licence has been granted under the Customs House Agents Licensing Regulations (CHALR), 1984. Regulations 4 to 10 reads as follows:
4. Invitation of application.- The Commissioner may invite applications for the grant of such number of licences as assessed by him, to act as Customs House Agents in the month of January every year by means of a notice affixed on the notice board of each Customs Station as well as through publication in at least two newspapers having circulation in the area of his jurisdiction specifying therein the last date of receipt of application. Such application shall be for clearance work within the jurisdiction of the said Commissioner.
5. Application for licence.- (1) An application for a licence to act as a Custom House Agent in a Customs Station shall be made in Form A and shall inter alia contain the name and the address of the person applying; and (2) If the applicant is a firm -
(a) the name and address of every partner of the firm, the firm"s name, and
(b) the name of the partner or the duly authorised employee, who will actually be engaged in the clearance of goods or conveyances through the customs.
(3) If the applicant is a company -
(a) the name of each director, manager, managing director, and
(b) the names of director, manager or the duly authorised employee, who will actually be engaged in the clearance of goods or conveyances through the customs.
6. Conditions to be fulfilled by the applicant.-
The applicant or the person referred to in clause (b) of sub-regulations (2) and (3) of Regulation 5 as the case may be, shall prove to the satisfaction of the Commissioner that:
(a) the applicant is a graduate from a recognised University and is an employee of a licensee and that he possesses a permanent pass in Form G prescribed under regulation 20 and has the experience of work relating to clearance of goods through the Customs, for a period of not less than three years in the capacity of such a passholder :
Provided that the Commissioner may relax the possession of permanent pass in Form G to one year for reasons to be recorded in writing.
(b) the applicant has financial viability supported by a certificate issued by a Scheduled Bank or such other proof acceptable to the Commissioner evidencing possession of assets of the value of not less than Rs. 1 lakh in the case of applicants for the grant of licence in respect of any one of the Customs Stations at Bombay, Calcutta, Madras, Cochin, Kandla, Goa, Mangalore, Tuticorin or Visakhapatnam and not less than Rs. 50,000/- in the case of each of the other Customs Stations, situated at places other than those specified above :
Provided that in cases where a Commissioner"s jurisdiction extends to more than one Customs Station, the Commissioner may issue one licence for all the Stations or more than one such Station to be specified in the licence, waiving the need for separate compliance of the provisions of clauses (a) and (b) above for such additional Customs Stations. The Commissioner may also waive the need for separate compliance of the requirement of Regulation 11 in such cases :
Provided further that in places where there is more than one Commissioner exercising jurisdiction over different Customs Stations and Custom House Agents licensed under the Custom House Agents Licensing Regulations, 1965 have been operating in the said Customs Stations on the basis of one licence, it shall be. open to such Agents to obtain a temporary licence under Regulation 8 from the Commissioner, other than the one who has issued them the existing licence, without being required to comply with the requirements of Regulation 6 in regard to financial viability or the requirements as to fresh deposit in terms of Regulation 11.
7. Scrutiny of applications for licence.-
On receipt of application under Regulation 5, the Commissioner may make enquiries for verification of the particulars set out in the application and also such other enquiries as he may deem necessary including enquiries about the reliability and financial status of the applicant.
8. Grant of temporary licence.-
(1) Any applicant whose application is received within the last date specified in Regulation 4 and who satisfies the requirements of Regulations 5 and 6, shall be permitted to operate as Custom House Agent at the Customs Station for which the application is made initially for the period of one year against temporary licence granted by the Commissioner in this regard in Form B. Provided that when evidence is produced to the Commissioner that the applicant has already availed of two chances for qualifying in the written or oral examination prescribed in these regulations and would like to avail of the third chance as soon as the next examination is held in terms of Regulation 9 and that the applicant has been able to account for the minimum volume of work prescribed for such agents in the course of one year"s working, the Commissioner may extend the aforesaid period of one year for which the temporary licence has been granted by another six months or such further period not exceeding one year to enable the applicant to avail of the third chance for qualifying in the examination in terms of Regulation 9. While granting such extension, the Commissioner of Customs shall satisfy himself that the requirements of Regulations 10(l)(a) and 10(l)(b) had been fully met by the applicant.
(2) Any person, whose application for grant of temporary licence under sub-regulation (1) of regulation 8 is rejected by the Commissioner of Customs may represent to the Chief Commissioner of Customs or Chief Commissioner of Customs and Central Excise, as the case may be against such order rejecting the grant of a temporary licence, within 30 days of the communication of the impugned order.
(3) In case the number of applicants fulfilling the conditions prescribed under regulation 6 is more than the number of licences to be issued as assessed under regulation 4, the Commissioner may adopt seniority in experience as "G" pass holder of such applicants as the criterion to give precedence to the applicants :
Provided that if more than one applicant has the same period of experience, the applicant who is older in age shall get precedence.
9. Examination of the applicant.-
(1) The holder of a temporary licence in the case of an individual and the person or persons who will be actually engaged in the work of clearance of goods through customs on behalf of the firm or company holding a temporary licence, as the case may be, shall be required to qualify in examination, at the earliest opportunity. Such person or persons shall be eligible to appear in the examination as soon as a temporary licence is granted and shall be permitted to avail of three chances within a period of 2 years from the date of issue of the temporary licence on payment of prescribed examination fee of Rs. 500/- for each examination. -
(2) The examination referred to in sub-regulation (1) shall include a written and oral examination and will be conducted twice every year. Each applicant would be permitted to avail of a maximum of three chances to qualify in the said examination but all such chances should be availed of within a maximum period of 2 years from the date of grant of temporary licence.
Explanation: A person who qualifies in the written examination, but fails in the oral test linked to it, shall be treated as having failed in that chance; but he will not be required to appear in the written examination in the subsequent chances.
(3) The examination may include questions on the following:-
(a) preparation of various kinds of bills of entry and shipping bills;
(b) arrival entry and clearance of vessels;
(c) tariff classification and rates of duty;
(d) determination of value for assessment;
(e) conversion of currency;
(f) nature and description of documents to be filed with various kinds of bills of entry and shipping bills;
(g) procedure for assessment and payment of duty;
(h) examination of merchandise at the Customs Stations;
(i) provisions of the Trade and Merchandise Marks Act, 1958 (43 of 1958);
(j) prohibitions on import and export;
(k) bonding procedure and clearance from bond;
(l) re-importation and conditions for free re-entry;
(m) drawback;
(n) offences under the Act;
(o) the provisions of allied Acts including Imports and Exports (Control) Act, 1947 (18 of 1947), Foreign Exchange Regulation Act, 1973 (46 of 1973), Indian Explosives Act, 1884 (4 of 1884), Arms Act, 1959 (54 of 1959), Opium Act, 1878 (1 of 1878), Drugs and Cosmetics Act, 1940 (23 of 1940), Destructive Insects and Pests Act, 1914 (2 of 1914), Dangerous Drugs Act, 1930 (2 of 1930) in so far as they are relevant to the clearance of goods through customs;
(p) procedure in the matter of refund of duty paid, appeals and revision petitions under the Act.
(4) The Commissioner shall also satisfy himself whether the licensee in Form B , See Form 48 in Part 5, if he is an individual, possesses, or in the case of a firm or company, the persons who will be actually engaged in the work relating to clearance of goods through customs on behalf of that firm or company, possess satisfactory knowledge of English and the local language of the Customs Station:
Provided that in the case of persons deputed to work exclusively in the docks, knowledge of English will not be compulsory. Knowledge of Hindi will be considered as an additional or desirable qualification.
(5) The holders of a regular licence under regulation 10 may authorise one of their employees or partners or directors, to appear for the examination referred to in sub-regulation (1), on behalf of such holders of regular licence in addition to the person of their agency who has passed the examination referred to in sub-regulation (1).
10. Grant of regular licence.-
The Commissioner shall, on receipt of an application in Form C, grant a regular licence in Form D on payment of a fee of Rs. 5000/- to such holder of a temporary licence who qualifies in an examination referred to in Regulation 9 and whose performance is found to be satisfactory with reference, inter alia, to the following:-
(a) quantity or value of cargo cleared by such licensee conforming to norms as may be prescribed by the Commissioner;
(b) absence of instances of delay either in the clearance of goods or in the payment of duty for any reason attributable to such licensee and any complaints of misconduct including non-compliance of any of the obligations specified in Regulation 14.
(2) The Custom House Agents who are granted regular licences under Regulation 10, shall be eligible to work in all Customs Stations subject to fulfilment of the following requirements :
(a) the licensee shall make an application to the Commissioner of the concerned Customs Station where he intends to transact business for purposes of registering himself and his authorised staff;
(b) he fulfils the conditions stipulated in clause (b) of Regulation 6 relating to financial soundness and possesses the ability to provide adequate warehousing and transport facilities at the place of clearance of goods and production of evidence relating to availability of sufficient clientele at his disposal;
(c) he shall also be required to enter into a separate bond in Form D for due observation of these regulations and to furnish a separate Bank Guarantee for each Customs Stations as stipulated under Regulation 11; he shall produce evidence of knowledge of the local language of the Customs Stations, at which he wishes to conduct business;
(d) on fulfilment of the aforesaid conditions, the Commissioner of the Customs Station at which the licensee intends to transact business shall grant a licence in Form "D" authorising him to transact business at that Customs Station : Provided that no separate licence would be required in places where in addition to a Custom House handling imports by sea, there is also an International airport to handle imports by air even if under the jurisdiction of a different Commissioner.
(3) The Commissioner may reject an application for the grant of regular licence to act as Custom House Agent if the holder of the temporary licence fails to qualify in the examination in terms of Regulation 9, or the holder of temporary licence on evaluation of his performance in terms of Regulation 10 is not considered suitable due to any other reason to be stated in the order passed by the Commissioner.
(4) Any person aggrieved by the order of the Commissioner passed under sub-regulation (3) of regulation 10 may represent to [the Chief Commissioner of Customs or Chief Commissioner of Customs and Central Excise, as the case may be against such order within 30 days of the communication of the impugned order.
(5) The Chief Commissioner may, on his own motion or otherwise call for and examine the records of any proceedings in which the Commissioner has passed any order under sub-regulation (3) for the purpose of satisfying himself "as to the legality, propriety or correctness of such order and may pass such orders as he may deem fit. No order under this sub-regulation shall be made so as to prejudicially affect any person unless such person is given reasonable opportunity for making a representation and being heard in his defence, if he so desires."
(6) No order shall be made under sub-regulation (5) or sub-regulation (2) of regulation 8 in relation to an order passed by Commissioner under sub-regulation (3) or sub-regulation (1) of regulation 8, as the case may be, after the expiry of one year from the date on which such order was passed by the Commissioner.
16. Licence was issued to the 1st respondent at Visakapatnam and their branch licence is stated to be registered with Chennai Customs. The said licence had expired on 16.03.2006. Customs House Agent has sought for permission for renewal of licence. The Commissioner of Customs, as Licencing Authority, has found that the 1st respondent was allowed to operate as CHA in Chennai Customs under Regulation 10(2) of the Customs House Agents Licensing Regulations (CHALR), 1984, on the basis of CHA licence issued to them, under Regulation 10(1) of the said Regulations, by Visakapatnam Customs.
17. Perusal of the Order-in-Original, dated 24.07.2006, shows that the 1st respondent submitted an application for renewal of licence and along with the application, the 1st respondent submitted a letter, dated 14.06.2006, stating that as per M/s.Auro Trans Maritime Services Pvt. Ltd., v. Commissioner of Customs, Chennai reported in ELT 130 (Tribunal), the branch CHA licence issued under Regulation 10(2) of the CHALR, 1984, has to be treated as an independent licence from the main licence issued elsewhere. While considering the application for renewal, the Licencing Authority has granted personal hearing and the Consultant has made also oral submissions.
18. Order of the Commissioner of Customs, dated 24.07.2006, indicates that the Department has sought to negate the request for renewal of licence, under Customs House, Chennai, under Regulation 10(1), by relying on the decisions of this Court in W.P.No.5678 of 2000, dated 30.03.2000 and W.P.No.402 of 2003, dated 17.04.2006. In the abovesaid circumstances, the Commissioner of Customs (Seaport-Import), Licencing Authority, has framed an issue for adjudication, as to whether, the 1st respondent is entitled to get the licence, issued by the Customs House, Chennai, renewed under Regulation 10(2), irrespective of the fact that the original licence at Vizag Customs has not been caused to be renewed.
19. While adverting to the material on record and proceedings of the CESTAT, Madras and the above referred writ petitions, the Commissioner of Customs (Seaport-Import), observed that as per CHALR, 1984, more specifically in terms of Regulation 12(2)(a) and Public Notice No.59/94, dated 17.05.1994, the following norms are prescribed to be satisfied to measure the performance of the Custom House Agents, whenever an application for renewal of the Custom House Agent licence, (1) 150 documents (e.g., Bills of Entry, shipping Bills and baggage forms) per year.
OR (2) Clearance or shipment of 2000 packages per year.
OR (3) Clearance or shipment of packages of value not less than Rs.10 Crores per year.
(4) Payment of duty not less than Rs.2 Crores per year.
20. Besides, the Commissioner of Customs (Seaport-Import)/Licencing Authority, has also observed that the 1st respondent has not come to adverse notice that there was no due in respect of any Bond executed or any demand pending against the CHA and that the CHA has also furnished the details of the Service Tax, Income Tax payment particulars, etc. After considering the norms and other particulars, stated supra, the Commissioner of Customs, vide order, dated 24.07.2006, at Paragraph 14, ordered as follows:
Applying the ratio laid down by the Hon'ble CESTAT in the Auro Trans Case, and also after analysis of their performance indicators for Chennai, it therefore emerges that the CHA/Applicant is very much eligible for renewal of their licence issued under Regulation 10(2) of the erstwhile CHALR, 1984 read with Public Notice No.59/94, dated 17.05.94, subject to fulfillment of other procedural requirements that may be required to be complied with as per Customs Act, 1962 and the Rules and Regulations made thereunder.
21. Regulation 8 of the said Regulations, empowers the Licencing Authority to grant temporary licence. Rejection of request for temporary licence, can only be represented to the Chief Commissioner of Customs or Chief Commissioner of Customs and Central Excise, as the case may be. As per Regulation 10 of CHALR, 1984, the Commissioner of Customs shall grant regular licence. As per Regulation 10(2), the Custom House Agents, who are granted regular licences under Regulation 10, shall be eligible to work in all Customs Stations, subject to fulfilment of the following requirements :
(a) the licensee shall make an application to the Commissioner of the concerned Customs Station where he intends to transact business for purposes of registering himself and his authorised staff;
(b) he fulfils the conditions stipulated in clause (b) of Regulation 6 relating to financial soundness and possesses the ability to provide adequate warehousing and transport facilities at the place of clearance of goods and production of evidence relating to availability of sufficient clientele at his disposal;
(c) he shall also be required to enter into a separate bond in Form D for due observation of these regulations and to furnish a separate Bank Guarantee for each Customs Stations as stipulated under Regulation 11; he shall produce evidence of knowledge of the local language of the Customs Stations, at which he wishes to conduct business;
(d) on fulfilment of the aforesaid conditions, the Commissioner of the Customs Station at which the licensee intends to transact business shall grant a licence in Form "D" authorising him to transact business at that Customs Station : Provided that no separate licence would be required in places where in addition to a Custom House handling imports by sea, there is also an International airport to handle imports by air even if under the jurisdiction of a different Commissioner.
23. Here again, the applicant has to satisfy the above conditions, set out in the above clauses (a), (b), (c) and (d) of Regulation 10. Thus, reading of Regulation 10 also makes it clear that while granting renewal, the applicant has to satisfy the above conditions, besides a pass in the examination. As per Regulation 10(3), the Commissioner may reject an application for the grant of regular licence to act as Custom House Agent, if the holder of the temporary licence fails to qualify in the examination in terms of Regulation 9, or the holder of temporary licence on evaluation of his performance in terms of Regulation 10 is not considered suitable due to any other reason to be stated in the order passed by the Commissioner.
24. As per Regulation 10(4), any person aggrieved by the order of the Commissioner passed under sub-regulation (3) of regulation 10 may represent to the Chief Commissioner of Customs or Chief Commissioner of Customs and Central Excise, as the case may be against such order within 30 days of the communication of the impugned order. However, as per Section 10(5), the Chief Commissioner may, on his own motion or otherwise call for and examine the records of any proceedings in which the Commissioner has passed any order under regulation 10(3) for the purpose of satisfying himself "as to the legality, propriety or correctness of such order and may pass such orders as he may deem fit. No order under this sub-regulation shall be made so as to prejudicially affect any person unless such person is given reasonable opportunity for making a representation and being heard in his defence, if he so desires.
25. Thus, when the Commissioner refuses to grant a regular licence, he can represent to the Chief Commissioner of Customs or the Chief Commissioner of Customs and Central Excise, himself can on his own motion or otherwise, call for and examine the records of any proceedings, in which, the Commissioner has passed any order, under Regulation 10(3) for the purpose of satisfying himself, as to the legality, propriety or correctness of such order and may pass such orders as he may deem fit. After under Section 10(3) of the Regulations can be examined, which can be an order granting regular licence also and while examining the correctness or legality or propriety of such order, he has to give a reasonable opportunity to the person, likely to be affected.
26. Reading of Regulation 12(2)(a) of the CHALR, 1984, under which, the licence was issued at Viskapatnam shows that for grant of licence, shows that the applicant has to be comply with the conditions stated therein and that the said regulation does not contemplate any quasi-judicial enquiry. Thus, reading of the provisions, stated supra, makes it clear that the question of giving a reasonable opportunity to represent and defend, arises only when the Chief Commissioner of Customs or Chief Commissioner of Customs and Central Excise, takes a decision, either on his own motion or otherwise call for and examine the records of any proceedings, as stated supra. Provisions relating to grant of licence, makes it clear that the decision of the Commissioner of Customs (Seaport-Import), in the matter of granting licence is administrative in nature.
27. Renewal of licence is good as a new licence granted under the provisions of an Act. It has the effect of continuation of licence already granted. In Gajraj Singh v. State Transport Appellate Tribunal reported in 1997 (1) SCC 650, the Hon'ble Supreme Court considered a case for renewal of the licence, under the Motor Vehicles Act, 1988 and held that renewal of licence means a new licence, granted by way of renewal. Indisputably, while considering an application for renewal, all the conditions required to be complied with, under the statutory provisions, rules or regulations, as the case may be, for grant of fresh licence and any other conditions, imposing performance of the conditions of licencee, have to be complied with. Procedure set out in CHALR, 2004, do not provide for any adjudication, either for the grant of fresh licence or renewal.
28. What is adjudication? As per Chamber's English Dictionary, 'Adjudication' means, "to determine judicially, to pronounce to award, to pronounce judgment, to act as a judge in a competition". Adjudication is the act or process of adjudicating. Advanced Law Lexicon by Mr.P.Ramanatha Aiyer, gives the meaning of 'adjudication' as 'act of adjudicating; the process of trying and determining a case judicially. As per Black's Law Dictionary, 'Adjudication' is the legal process of resolving a dispute and the process of judicially deciding a case.
29. In M.Dutta Agency v. Commissioner of Customs reported in 1998 (101) ELT 581, a writ petition has been filed, challenging the correctness of an order, rejecting the renewal of licence. A primary objection has been raised by the revenue, with regard to the maintainability of the writ petition, contending that the Tribunal is vested with the powers to hear the Custom's appeal, as an adjudicating authority and inasmuch as the Additional Collector of Customs therein, had exercised the powers invested on him, under the Customs Act, as an Adjudicating Authority, an appeal would lie to the Tribunal. Per contra, it was contended on behalf of the licencee that there is no provision to file an appeal and therefore, the Tribunal would not be a competent authority to hear an appeal. Having heard the learned counsel for the parties and after considering the relevant provisions of the Act and the Regulations, governing licence, a learned single Judge of Calcutta High Court held that, I am of the view that the argument of Mr. Banerjee that an appeal lies under Section 129A(1)(a) of the Customs Act against the decision of the Additional Collector of Customs cannot be supported.
30. Going through the Regulations, 1984 or 2004, as the case may be, it could be deduced that order, revoking or suspending the licence is likely to affect the CHA, with civil consequences. Therefore, Regulations have been framed, making a provision for filing an appeal. But as regards, an order for grant of renewal, the licencee can only make a representation to the Chief Commissioners. Thus, it could be seen that if renewal was rejected, CHA can only make a representation and if his grievance is not addressed, he can only approach the High Court under Article 226 of the Constitution of India. The licencee cannot move the Tribunal, as no adjudication is involved.
31. Perusal of the order of CESTAT, Chennai, dated 14.07.2009, shows that the Tribunal, by following the orders, extracted supra, held that the appeal filed against the order, on the application to renew the licence issued to the Customs House Agent, under the erstwhile CHALR, 1984, as not maintainable. In the light of our discussion and decisions, stated supra, we are not inclined to interfere with the order of the Tribunal. Accordingly, we answer the substantial questions of law, against the revenue.
32. In A.S.Vasan v. UOI reported in 2009 (238) ELT 217 (Bom.), a Division Bench of the Bombay High Court, at Paragraph 8, held as follows:
As regards the first ground in paragraph no.13 of the order dated 20th May 2009, the respondent has observed that at the time of hearing, Mr.Unnikrishnan gave visiting cards (proposed for noting the persons or seeking entry) into the customs area for hearing of the petitioner firm showing that it was a Custom House Agent. The petitioner firm was thus representing that it possessed a CHA licence even after the CHA licence had expired and not renewed. The explanation by Mr.Unnikrishnan that the visiting cards were printed two years ago when the CHA licence was still valid and he had simply used the same card without any intention of making any false representation was not accepted by respondent no.2. In our opinion, the explanation offered by Mr.Unnikrishnan was a plausible explanation and there was no material on record, that for except giving of the visiting card to the respondent no.2 himself at the time of hearing that the petitioner was using the visiting cards anywhere else and/or misrepresenting that they were still possessing CHA licence. In in our view, giving of the visiting card to respondent no.2 wa\s even assuming if amounted to misconduct was too insignificant a thing warranting cancellation of the licence or its refusal of its renewal.
8. As regards the second ground, it may be noted that the statement allegedly recorded under Section 108 of the Customs Act was retracted by Mr.Unnikrishnan. Furthermore, the order imposing the fine of Rs.15 lakhs on Mr.Unnikrishnan by the adjudicating authority on which reliance has been placed in the impugned orders was set aside by the CESTAT by its decision rendered in Commissioner of Customs v. R.K.Tommer and other connected matters reported in 2008 (228) ELT 232. Mr.Unnikrishnan was exonerated of all charges against by the CESTAT. In our opinion, therefore, the Commissioner erred in relying upon the order of the adjudicating authority which had been set aside and has ceased to exist by reason of the order of the CESTAT.
33. Coming to the aspect of renewal, Regulation 12 of the CHALR, 1984, states that a licence granted under regulation 10 shall be valid for a period of five years, but may be renewed from time to time in accordance with procedure provided in sub-regulation (2), which states that the Commissioner of Customs, may, on application made by the licensee, before the expiry of the validity of the licence under sub-regulation (1), renew the licence for a period of five years from the date of expiration of the original licence granted under regulation 10 or of the last renewal of such licence, as the case may be, if the performance of the licensee is found to be satisfactory with reference, inter alia, to the following :-
(a) quantity or value of cargo cleared by such licensee conforming to norms as may be prescribed by the Commissioner;
(b) absence of instances of delay either in the clearance of goods or in the payment of duty for any reason attributable to such licensee and any complaints of misconduct including non-compliance of any of the obligations specified in regulation 14.
Regulation 12(3) states that the fee for renewal of a licence under sub-regulation (2) shall be Rs.3,000/-.
34. While considering the case of the 1st respondent, for renewal of licence granted in the Commissionerate of Customs, Chennai, the Commissioner of Customs (Seaport-Import), has categorically held that after analysis of the performance, the 1st respondent was eligible for renewal of licence, issued under Regulation 10(2) of the CHALR, 1984 read with Public Notice No.59/94, dated 17.05.1994. At this juncture,
35. At this juncture, when the Chief Commissioner of Customs or the Chief Commissioner of Customs and Central Excise, as the case may be, is empowered to exercise the correctness of the order passed under regulation 10(3) for the purpose of satisfying himself, as to the legality, propriety or correctness of such order and may pass such orders, which includes grant or refusal and in the light of Regulation 10(4), which enables only a representation to be made to the Chief Commissioner of Customs and Central Excise, as the case may be, the need to negotiate to an adjudicating process, by the Chief Commissioner of Customs and Central Excise, as the case may be, at the time of grant of fresh licence or renewal, does not arise, for the reason that the regulations do not comtemplate exercise of quasi-judicial power, at that time.
36. The issue to be considered by this Court, is whether, the Commissioner of Customs (Seaport-Import), has converted himself, as an adjudicating authority to adjudge an issue, as to whether, the 1st respondent is entitled to get the licence, issued by the Commissionerate, Chennai, renewed under Regulation 10(2), irrespective of the fact that the original licence at Vizag Customs has not been renewed.
37. As stated supra, a bare reading of CHALR, 1984, only indicates satisfactory performance of the licence granted and it does not speak about the entitlement of the licencee for renewal of another licence at Vizag, not being renewed.
S.MANIKUMAR, J.
AND D.KRISHNAKUMAR, J.
skm To The Customs, Excise & Service Tax Appellate Tribunal, No.26, Shastri Bhavan Annexe Building, Haddows Road, Chennai 600 006.
C.M.A.No.2969 of 2010.06.2016