Customs, Excise and Gold Tribunal - Mumbai
A.R. Marines Pvt. Ltd. vs Commissioner Of Customs (General) on 7 February, 2008
ORDER K.K. Agarwal, Member (T)
1. This is an appeal against the order of the Commissioner suspending the CHA licence of the appellant under Regulation 20(2) of the Custom House Agents Licencing Regulations, 2004 on the ground that an enquiry is contemplated against the CHA under Regulation 22 of the Custom House Agents Licencing Regulations, 2004. The impugned order lists out five cases involving misconduct on the part of the appellant.
2. Ld. Advocate Shri. R.B. Pardeshi for the appellant submits that the appellant is a reputed CHA and the volume of work shows that the firm was handling more than 3000 export/import documents during the year 2003-06. It is his submission that under Regulation 20(2) of the Custom House Agents Licencing Regulations, 2004 suspension can be resorted to in appropriate cases where immediate action is necessary. The events of misconduct cited in the Commissioner's order relate to the year 2001, whereas, the suspension order has been issued in December 2007. Therefore, if the misconduct has occurred six years earlier, it cannot be considered as a case which requires immediate action warranting a suspension under Regulation 20(2). The Hon'ble High Court of Delhi has in the case of International Cargo Services v. Union of India considered the ingredients of Sub-regulation (2) of the Regulation 20 of the Custom House Agents Licencing Regulations, 2004 and has decided that this is an urgency clause and if the issue is old then this provision is not applicable. A similar view was taken by the Hon'ble Bombay High Court in the case of Commissioner of Customs v. S.A. Dalal & Co. 2008 (221) ELT 488 (Bom.) wherein it was held that suspension under Regulation 20(2) can be ordered in appropriate cases where immediate action is necessary to suspend licence. In that case also as the suspension was issued in May, 2007, much after the date of happening, it was held that it cannot be said that it was a case where it falls within Regulation 20(2). In case of Rajinder Kumar Goyal 1995 (79) ELT 54 (Del.) the Delhi High Court has held that where licence has been suspended after 11/2 years of alleged illegality have been found, then proceedings cannot be initiated under Regulation 20(2) of the Custom House Agents Licencing Regulations, 1984. An order of suspension in emergent situation can be passed by recording reasons without hearing the CHA in the first instance, but the situation should be emergent. He referred to various other tribunal's decisions to the same effect.
3. Referring to the five instances pointed out by the Commissioner in his order of suspension, he submitted that the first case related to some detection by the Directorate of Revenue Intelligence, Mumbai in the year 2002 and even in that case, the penalty imposed on the CHA by the original authority was set aside by the Tribunal and therefore this case cannot be made basis for immediate suspension of the licence. In the second instance pointed in the order, it was submitted that in this case the appellant was not even a noticed and the show cause notice was issued to some other CHA and here also the order-in-original was set aside by the Tribunal. This event has taken place in the year 2001. In respect of the other three cases, he admitted imposition of penalty amounting to Rs. 2 lakhs in the 3rd and 4th cases and Rs. 1 lakh in the 5th case relating to mis-declaration and fraudulent claims of draw back. But in theses cases also the events relates to the year 2001 and the suspension has been made after six years, which cannot be considered as emergent situation and all these orders have been challenged by the appellant in appeals filed by them. In view of this the power under Regulation 20(2) cannot be exercised. The licence was renewed after three years of events when the inquiry was on against them. He also drew our attention to the recent order dated 10.1.08 of the Bombay High Court in Appeal No. 90/07 Commissioner of Customs (Gen.), Mumbai v. P.C. India Shipping Agency wherein Tribunal's order setting aside the suspension on the ground that the suspension was done without grant of hearing as required under Regulation 22 of the Custom House Agents Licencing Regulations, 2004 was upheld by the Hon'ble Bombay High Court.
4. Ld. DR however submits that in this case, even though, the events might have occurred in 2001-02 penalties under the Customs Act have been imposed by the Additional Commissioner and Jt. Commissioner for aiding and abetting the mis-declaration and fraudulent claim of draw back by the exporters. All these orders have been passed on 29-Sep-2007 and therefore, are quite recent. Once the charges have been sustained against them, by the competent authority, it has to be considered as an emergent situation and the powers under Regulation 20(2) have to be exercised as the government cannot jeopardize its revenue. The cases cited by the appellant did not involve a situation where charges of mis-conduct has been established or penalties have been imposed for aiding and abetting mis-declaration and fraudulent claim of draw back, as is the situation in the present case. In such a situation, there is no requirement of personal hearing as powers under Regulation 20(2) are not subject to the procedure prescribed under Regulation 22. It is only when suspension is done under Regulation 20(1) that the procedure under Regulation 20(2) is to be followed as suspension under Regulation 20(1) is subject to the provisions of Regulation 22 and not the suspension under Regulation 20(2). He referred to the decision of the Hon'ble Bombay High Court decision in the case of Commissioner of Customs (Gen), Mumbai v. Raj Clearing Agency wherein it has been held that it is not mandatory that in all cases of suspension, Regulation 22(1) of the Custom House Agents Licencing Regulations, 2004 are to be followed and that in case where immediate action is necessary, the Commissioner of Customs is fully empowered to suspend licence where an inquiry against such agent is pending or contemplated as per Regulation 20(2) and CESTAT's observation that in all cases of suspension procedure under Regulation 22(1) are to be followed in the sense that prior notice before suspension had to be given is not sustainable. In view of this it was submitted that Commissioner's order suspending the licence needs no interference.
5. We have considered the submissions. We find that the Commissioner's order suspending the licence sets out five cases of gross misconduct on the part of the CHA and in three of the instances penalties of Rs. 2 lakhs each in two cases and Rs. 1 lakh has been imposed on the appellant. The charges are very grave of aiding and abetting in mis-declaration and fraudulent claim of draw back. Two of these cases are very recent where the order imposing penalty has been issued on 29-Sep-07. In such cases where there is a repeated commissioning of offences, an emergent situation can be said to have arisen warranting immediate action by the Commissioner in suspending the licence of the CHA. In various decisions of the various High Courts and Tribunal cited by the appellant, the situation as brought out in the impugned order was not present and there was no instance where the charges of aiding and abetting mis-declaration and fraudulent claim of draw back has been confirmed by the competent authority. Those case laws are therefore not relevant. As regards grant of personal hearing as per the Regulation 22 before issuing the order of suspension under Regulation 20(2) it has been held by the Hon'ble Bombay High Court in the case of Raj Clearing Agency (supra) that where immediate action is necessary, personal hearing cannot be granted and grant of personal hearing is not mandatory in all case. Even in the case of S.A. Dalal & Co. (spura), the Hon'ble Bombay High Court has recognized that under Regulation 20(2) suspension can be ordered but since there was considerable delay in issuing the suspension order from the date of event, the case did not fall within Regulation 20(2). In the case of M/s P.C. India Shipping Agency (supra) cited by the appellant, the Hon'ble High Court has nowhere said that a personal hearing is a must under Regulation 20(2) of the Custom House Agents Licencing Regulations, 2004 but has after looking into the circumstances of that case, upheld the decision of the Tribunal setting aside the order of the Commissioner suspending the licence without granting a personal hearing. The Hon'ble high Court has observed that in that case the suspension order was too cryptic and there was nothing in the order by which the appellant would know the material which was used against him or the reasons why the order of suspension was passed. It was in those circumstances that the High Court upheld the order of the Tribunal but it did mention that the Tribunal has not addressed to the correct question as to whether in case of suspension under Regulation 20(2) suspension can be ordered without any notice to the CHA. In view of this we hold that not issuing a notice will not effect the suspension order which has been issued under Regulation 20(2). Appeal having no merits is rejected.
(Pronounced in the court)