Calcutta High Court
Sri Aditya Ganguly vs Union Of India And Others on 22 April, 2016
Equivalent citations: AIRONLINE 2016 CAL 16
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
WP 350 of 2016
SRI ADITYA GANGULY
-Versus-
UNION OF INDIA AND OTHERS
For the Petitioner: Mr Arijit Chakraborty, Adv.,
Mr Debaditya Banerjee, Adv.,
Nilotpol Chowdhury, Adv.
For the Respondents: Mr S. B. Saraf, Adv.,
Mr K. K. Maity, Adv.
Hearing concluded on: April 20, 2016.
BEFORE
SANJIB BANERJEE, Judge
Date: April 22, 2016.
SANJIB BANERJEE, J. : -
The petitioner is a Customs broker. Customs brokers were previously
known as Customs House Agents and such brokers are governed by the Customs
Brokers Licensing Regulations, 2013 issued by the Central Board of Excise and
Customs under Section 146(2) of the Customs Act, 1962. The matter here
pertains to the suspension of the petitioner's licence as a Customs broker. The
petitioner alleges that the order of suspension is without jurisdiction and betrays
the closed mind of the licensing authority and, as such, the usual remedy of a
post-decisional hearing would be an exercise in futility. The petitioner also
asserts that since an adverse order had been passed in connection with an
import transaction of a client of the petitioner, the petitioner does not expect a
fair deal either at the post-decisional hearing or in any possible appeal that the
petitioner may prefer under Regulation 21 of the said Regulations of 2013.
2. The petitioner acted as the Customs broker for one Sachar International of
Delhi and filed a bill of entry dated February 9, 2015 for clearance of a
consignment of automotive parts imported from the United Arab Emirates
under an airway bill. According to the petitioner, the goods were inspected
at the airport and cleared by the Customs authorities, but they were
subsequently apprehended by officers of the Customs Preventive
Commissionerate and put to check at the cargo unit of the Delhi Airport.
3. The order-in-original dated February 26, 2016 passed by an Additional
Commissioner (Preventive) pursuant to a show-cause notice of July 29,
2015 observed that on the examination of the goods it was found that
branded automotive parts of, inter alia, BMW, Mercedes and Toyota were
included in the consignment though no brand or model of the automotive
parts had been declared by the importer. Further, goods in excess of the
declared quantity were discovered in the consignment. The order recorded
that since the value and description of the imported goods were mis-
declared and excess goods were also discovered in the consignment, such
imported goods were seized under Section 110 of the said Act on February
12, 2015 on the reasonable belief that such goods were liable for
confiscation under Section 111 of the Act.
4. It appears from the aforesaid order of February 26, 2016 that the importer
was summoned for appearance on several occasions with appropriate
documents, but all the documents were not furnished. The statement of a
representative of the petitioner was recorded on February 19, 2015 under
Section 108 of the Act wherein he agreed with the contents of the seizure
list and that the consignment had been examined in his presence. The
same representative of the petitioner appeared again on June 15, 2015
before the concerned Additional Commissioner (Preventive) pursuant to the
authorisation of the petitioner. The order found that, despite the
petitioner's assertion that he had no knowledge of the offending goods, the
facts revealed otherwise. In finding the petitioner liable to penalty under
Section 112 of the Act, the order recorded that both the importer and the
petitioner had "played active role in mis-declaration of the quantity and
brand of goods imported ..." The order dated February 26, 2016 also
observed that the petitioner had "failed to discharge their obligation in a
fair and disinterested manner by not applying due diligence to ascertain
the correctness of facts." The declared value of Rs.3,18,125/- in respect of
the relevant bill of entry was rejected and the value of the consignment was
determined at Rs.50,51,391/- under the Customs Valuation
(Determination of Value of Imported Goods) Rules, 2007. An order for
confiscation was also made with an option to the importer to redeem the
consignment on payment of a redemption fine of Rs.5 lakh under Section
125 of the Act. The differential duty was found to be to the tune of
Rs.18,17,588/-. A penalty of Rs.2 lakh was imposed on the petitioner for
the petitioner's act of abetment.
5. On or about April 6, 2016 the petitioner received the impugned order of
suspension dated April 5, 2016. Such order of suspension claimed that the
order-in-original dated February 26, 2016 was forwarded to the licensing
authority under cover of a letter dated March 17, 2016. The impugned
order set out the facts pertaining to the import consignment of February,
2015. After noticing the important features of the order-in-original, the
suspension order referred to the various obligations of a Customs broker
under the several limbs of Regulation 11 of the said Regulations of 2013
before observing that the petitioner had failed to provide the documents
sought in course of the proceedings before the Additional Commissioner
(Preventive) and, thereby, further violated Regulation 11 of the said
Regulations of 2013. The final paragraph of the order impugned and the
directions contained therein are set out:
"13. Therefore, in view of the foregoing reasons, an enquiry is
contemplated against the Customs Broker M/s Ranabir Enterprise
under Regulation 20 of Customs Broker Licensing Regulation 2013.
Pending completion of such enquiry, it appears that the continuation
of business transaction by the Customs Broker, would be prejudicial
to the interest of Revenue and immediate action under Regulation
19(1) of CBLR 2013 is warranted to prevent further misuse of the
Customs Broker licence.
ORDER
"(i) In view of the findings above I hereby order the suspension of CB Licence No. R-16, PAN No.ACWPG2166M of M/s. Ranabir Enterprise with immediate effect and until further orders under Rule 19(1) of CBLR, 2013.
"(ii) As per Regulation 19(2) of CBLR, 2013 opportunity is given to M/s. Ranabir Enterprise or to their authorised representative to appear before the undersigned for a post-decisional hearing on 22-04-2016 at 11.00 hrs."
6. Though the impugned order of April 5, 2016 afforded the petitioner a post-
decisional hearing on April 22, 2016, the petitioner evinced an intention to disregard the same upon instituting the present proceedings on April 12, 2016.
7. The petitioner insinuates that the licensing authority has merely paraphrased the salient parts of the order-in-original and has passed a perfunctory order of suspension without any application of mind. The petitioner asserts that the tenor of the impugned order of suspension betrays the premeditated conviction of the licensing authority that the petitioner's licence must be revoked, irrespective of whatever the petitioner may carry in his defence. In particular, the petitioner refers to Regulations 19 and 20 of the said Regulations of 2013 and a circular dated April 8, 2010 issued in respect of Customs House Agent License. Regulations 19 and 20 of the said Regulations of 2013 are set out:
"19. Suspension of licence. - (1) Notwithstanding anything contained in regulation 18, the Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending or contemplated.
(2) Where a licence is suspended under sub-regulation (1), the Principal Commissioner or Commissioner of Customs shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker 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 Broker:
Provided that in case the Principal Commissioner of Customs or Commissioner of Customs, as the case may be passes an order for continuing the suspension, the further procedure thereafter shall be as provided in regulation 20.
"20. Procedure for revoking licence or imposing penalty. - (1) The Principal Commissioner or Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the licence or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.
(2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker.
(3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs Broker, for the purpose of ascertaining the correct position.
(4) The Customs Broker shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing.
(5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall prepare a report of the inquiry and after recording his findings thereon submit the report within a period of ninety days from the date of issue of a notice under sub-regulation (1).
(6) The Principal Commissioner or Commissioner of Customs shall furnish to the Customs Broker a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, and shall require the Customs Broker to submit, within the specified period not being less than thirty days, any representation that he may wish to make against the said report.
(7) The Principal Commissioner or Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the licence of the Customs Broker or imposing penalty not exceeding the amount mentioned in regulation 22 within ninety days from the date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5):
Provided that no order for revoking the license shall be passed unless an opportunity is given to the Customs Broker to be heard in person by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be."
8. The petitioner contends that the licence of a Customs broker may be suspended only if immediate action is necessary and where an inquiry against such broker is pending or an inquiry is contemplated. According to the petitioner, the immediacy of an order of suspension is based on its necessity which has to be assessed from the circumstances attributed to the suspension. The petitioner argues that since the matters complained of in the impugned order are of February, 2015 vintage, the petitioner's suspension was neither contemporaneous with the discovery of the perceived misconduct on the part of the petitioner, nor is there any reason proffered in the order of suspension as to the necessity of suspension at this stage. The petitioner claims that since no inquiry against the petitioner was pending as on the date of the order of suspension and no notice has been issued to the petitioner for revocation of his licence under Regulation 20(1) of the said Regulations, no inquiry could be said to be in immediate contemplation. The petitioner says that since an order of suspension permits a post-decisional hearing and it is possible at such post-decisional hearing that the broker may allay the misgivings of the licensing authority, the assertion in the order of suspension that an inquiry against the petitioner was in contemplation demonstrates that the post-decisional hearing would be an empty formality and the matter would progress seamlessly to the process of revocation under Regulation 20 of the said Regulations.
9. The petitioner claims on the basis of the circular of April 8, 2010 that the Central Board of Excise and Customs has prescribed a time-limit in cases warranting immediate suspension of a licence and such time-limit is "within thirty days of the detection of an offence". The petitioner also relies on the last limb of paragraph 7.2 of the circular:
"7.2. ... The Licensing authority shall take necessary immediate suspension action within fifteen days of the receipt of the report of the investigating authority. A post-decisional hearing shall be granted to the party within fifteen days from the date of his suspension. The Commissioner of Customs concerned shall issue an Adjudication Order, where it is possible to do so, within fifteen days from the date of personal hearing so granted by him."
10. To begin with, it has to be said that the impugned order of suspension cannot be seen to be without jurisdiction since the licensing authority who has issued the same had due authority to do so. Ordinarily, when this extraordinary jurisdiction is invoked in preference to an alternative remedy available to the petitioner, the petition may not be entertained unless the alternative remedy is demonstrably inefficacious; or the action challenged is palpably without jurisdiction or it is utterly baseless or in absolute breach of the principles of natural justice. When an alternative remedy is available and this extraordinary jurisdiction is invoked on the ground of lack of authority of the administrative functionary who has taken the impugned action, the quality of the challenge must be evident from the face of the action impugned. Disputed questions as to the compliance with conditions precedent to the exercise of the authority and the like are not entertained since such disputes can be addressed in course of the regular remedy available. Similarly, if there is a dispute as to whether the principles of natural justice had been breached, the breach must be glaring.
11. On the ground of alternative remedy, the petitioner says that the appellate remedy under Regulation 21 of the said Regulations of 2013 is not available to the petitioner since there is no judicial member at present at the Customs, Central Excise and Service Tax Appellate Tribunal in the city. The petitioner seeks almost to disregard the post-decisional hearing afforded by the order impugned to be an alternative remedy as the petitioner perceives the relevant Principal Commissioner of Customs to have a closed mind and the order impugned to be without jurisdiction since the post-decisional hearing is scheduled beyond the 15-day period envisaged by Regulation 19(2) of the said Regulations.
12. Though Regulation 21 of the said Regulations permits a Customs broker "who is aggrieved by any order passed by the Principal Commissioner of Customs" to prefer an appeal under Section 129A of the Act, it is doubtful whether an appeal against an order of suspension should be entertained unless such order is demonstrably without jurisdiction or patently absurd, when there is a mechanism for a post-decisional hearing within a short time of 15 days of the suspension.
13. The petitioner has relied on a Division Bench judgment of this court reported at 1998 (104) ELT 11 (N. C. Singha v. Union of India). The judgment was rendered in an appeal arising out of the refusal by a single bench to pass an interim order in a petition challenging the suspension of a licence under the Customs House Agents Licensing Regulations, 1984. Regulation 21 (2) of the Regulations of 1984 appears to have been in pari materia with Regulation 19(1) of the Regulations of 2013 relevant for the present purpose. At paragraph 5 of the report, the Division Bench observed that "the power under Regulation 21(2) was resorted to apparently without spelling out in the impugned order as to whether any immediate action was necessary ..." On such appreciation, even though the appeal arose form an interim order, the writ petition was effectively allowed by quashing and setting aside the order of suspension.
14. The facts in the reported judgment are clearly inapplicable here. The Division Bench in that case read the order of suspension not to indicate any reasons why it was immediately necessary to suspend the licence. In the present case, the impugned of order of suspension of April 5, 2016 refers to the order of punishment dated February 26, 2016 passed against the petitioner and the forwarding thereof under cover of a letter dated March 17, 2016 to the petitioner's licensing authority. The immediate need for suspending the petitioner's licence is evident from the order impugned:
that by a reasoned order the petitioner's misconduct has been proven.
15. Though the petitioner has relied on the circular of April 8, 2010, such circular was issued under a different regime and not under the Regulations of 2013 relevant for the present purpose. In any event, the circular has the effect of being a kind of advisory or a set of guidelines in respect of the matters covered thereby and cannot have any binding effect qua the interpretation of any statutory regulation. The circular is found to be completely irrelevant in the context of the order of suspension impugned herein.
16. It is equally fallacious to suggest that if the post-decisional hearing is scheduled on a day or two after the 15-day period provided therefor under Regulation 19(2) of the said Regulations, the order of suspension can be seen to be non est only on such ground. There is no conclusive evidence produced by the petitioner that the impugned order was received by the petitioner on April 6, 2016, though there is an averment to such effect at paragraph 17 of the petition. In any event, an order of suspension only takes effect upon it being served and the date of service ought to be excluded for the purpose of reckoning the 15-day period for the post- decisional hearing provided for in the relevant provision. The two 15-day periods referred to in Regulation 19(2) of the said Regulations should, ordinarily, be adhered to; but the wording of the sub-regulation does not warrant such a construction that such periods must be strictly adhered to, or the order of suspension would dissolve thereupon. A delay of a day or two in either case may not be fatal to the order of suspension.
17. The petitioner makes much of the two limbs of the expression "may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending or contemplated" appearing in Regulation 19(1) of the said Regulations. The petitioner suggests that there is no mandate to perceive the "enquiry" in the relevant expression to be an inquiry under Regulation 20 of the said Regulations and it is possible that an inquiry may be under any provision of the parent statute. It is possible to accept such argument, but it is not relevant in the present context as no inquiry was pending against the petitioner as at the date of the order of suspension. In such order of suspension asserting that an inquiry was contemplated against the petitioner, the only inquiry that it alluded to was the one under Regulation 20(2) of the said Regulations.
18. However, there is no merit in the petitioner's assertion that since the relevant Principal Commissioner contemplated that he may direct an inquiry under Regulation 20(2) of the said Regulations, the post-decisional hearing on the order of suspension under Regulation 19(2) of the said Regulations was to be an idle formality. Any authority intending to take any penal action against a perceived delinquent must believe that if the allegations, in respect whereof a reply of the perceived delinquent is sought, were to be proved, the delinquent would be guilty of misconduct. That is the very basis for taking the first step in any proceedings having penal consequences. But that would not imply that the authority starts with a closed mind. In any event, an inquiry under Regulation 20(2) of the said Regulations is indispensable even if an order of suspension is continued pursuant to the post-decisional hearing. Further, suspension, by its very nature is temporary though it may be a step in the direction of revocation of the licence.
19. Every order of suspension passed under Regulation 19 of the said Regulations must be intended to lead to a possible revocation, subject to the explanation that may be furnished by the suspended broker at the post-decisional hearing qua the order of suspension. The suspension of a licence under the said Regulations is not a punishment by itself but it may be used as a first step for ultimately revoking the licence of the broker. Viewed in such perspective, whenever an order of suspension of a licence is passed under Regulation 19 of the said Regulations, the concerned official passing such order must, prima facie, believe that the licence is liable to be revoked and the word "contemplated" must be understood in such light.
20. However, the necessity of an immediate order of suspension is the more important limb of the relevant expression and the perception of the necessity must be left to the officer entitled to exercise such authority. An order of suspension cannot be challenged in this extraordinary jurisdiction as being without jurisdiction by calling upon the court to take a different view on the ground of necessity. If the prescribed authority perceives the suspension to be necessary, it has to be accepted at face value and, though the same can be questioned in the post-decisional hearing, it cannot be subjected to a judicial review unless it is palpably absurd.
21. As to the immediacy of the necessity to suspend a broker, it is evident that the order of suspension in this case has been passed within a short time of the licensing authority being made aware of the order of February 26, 2016 and there is nothing to the contrary that has been demonstrated by the petitioner. If the licence had been suspended or revocation proceedings had been initiated prior to the order of February 26, 2016 (in the event the licensing authority was aware of such proceedings), there may have been some basis to the petitioner asserting that the licensing authority was attempting to prejudge an issue pending consideration before an appropriate authority. In this case, the order of suspension has been passed within a short time of licensing authority being made aware of the proven misconduct on the part of the petitioner as established by the order of February 26, 2016.
22. Since an order of suspension of a Customs broker licence may be passed under the said Regulations without affording the broker any previous opportunity to explain his perceived misconduct, the invocation of this extraordinary jurisdiction cannot be seen to be on the ground of the breach of the principles of natural justice. Further, since the order impugned is founded on the basis of a previous order holding the petitioner guilty of abetting his client in an illegal import transaction, the order of suspension cannot be seen to be completely without basis that would shock the conscience of the court.
23. Since the challenge in the petition is not founded on any of the grounds that may excite the court to disregard the alternative remedy available to the petitioner, the merits of the petitioner's challenge to the impugned order cannot be gone into. It must also be emphasised that the alternative remedy that was available to the petitioner was the post-decisional hearing as an appeal from an order of suspension ought, ordinarily, not to be entertained since such order does not attain any degree of conclusivity before a subsequent order is passed after the post-decisional hearing.
24. The present essay of the petitioner is misconceived and ill advised. In any event, the petitioner ought to have participated at the post-decisional hearing since no order was passed on this petition preventing the petitioner from so doing or keeping the post-decisional hearing in abeyance. If the petitioner has participated in the post-decisional hearing, the concerned Principal Commissioner will pass an order within 15 days hereof without being influenced by this order. If the petitioner has chosen not to participate at the post-decisional hearing, the Principal Commissioner will take necessary steps in accordance with law without affording the petitioner any further opportunity of hearing. The challenge to the merits of the impugned order of suspension are not gone into.
25. WP 350 of 2016 is dismissed. The petitioner will pay costs to the department assessed at 3000 GM.
26. Urgent certified website copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(Sanjib Banerjee, J.)