Customs, Excise and Gold Tribunal - Delhi
M.A.C. Air (P) Ltd. vs Cc on 20 January, 1999
Equivalent citations: 1999(82)ECR14(TRI.-DELHI)
ORDER P.C. Jain, Member (T)
1. Briefly stated, the facts of the case are as follows as brought out in the impugned order:
The appellant herein is a holder of Regular Custom House Agent Licence No. R-8/77 valid up to 30.11.1999 of Delhi Customs House. He filed six Shipping Bill dated 13.7.1998. The said Shipping Bills were filed by an employee of the appellant herein, namely, Shri Mukesh Kumar, who was not an authorised signatory for customs purposes. It has also been alleged in the impugned order that no firm by the name of Bhagwati Exports exists at the address shown in the Shipping Bills. A further allegation has been made that in view of fore-going facts, the appellant has contravened the provisions of Regulation 14(b), (e), (f) and (1) of Custom House Agents Licensing Regulations, 1984.
1.2. In view of the fore-going allegation, the Commissioner of Customs (General), New Delhi made the following operative portion in the impugned order:
Now, therefore, I, Commissioner of Customs (General), New Delhi in exercise of powers conferred upon me under Regulation 21(2) of CHALR '84 hereby suspend CHA Licence No. R-8/77 of Delhi Custom House of the said CHA M/s. Mac Air Pvt. Ltd., 10, Community Centre, East of Kailash, New Delhi-65 with immediate effect and until further orders.
1.3. It is the aforesaid order that the appellants have now challenged in appeal before us.
2.1. Ld. Advocate, Shri J.S. Agarwal for the appellants, submits that action under Regulation 21(2) of CHALR, 1984 is an extreme power with the customs authorities. The guidelines have been given in the said Sub-regulation (2) whereunder this power can be exercised by the competent authority, namely, the Commissioner of Customs. The guidelines is that where an "immediate action is necessary and an enquiry against such agents is pending and contemplated. The impugned order, he submits, does not stipulate that an immediate action is necessary against the appellant. Apart from that, he submits, the facts, as brought out in the impugned order, as mentioned above, do not call for immediate action by way of suspension of the licence. He submits that the irregularity was detected on 22.7.1998 on examination of the consignments under export. Yet the action has been taken only after 2 months by issuing the impugned order. In the meantime, statements, etc. had been recorded. It comes out from the impugned order itself that the person signing the Shipping bills was not authorised to sign. It is duly admitted by the Customs authorities. He, further, submits that it was for the Customs authorities also to verify that a duly authorised person signs the Shipping bills. If an employee of CHA, who is not authorised to sign the Shipping bills, signs, the irregularities should have been detected by the Customs authorities. He, further, submits that whether the appellants have committed the offence under the Customs Act has yet to be found out by the authorities below because the show cause notice under Section 111 and 112 of the Customs Act are still pending. A reply has already been submitted by the appellants. He, further, submits that no action has been taken under Regulation 23 by issuing a regular notice. As a result, the appellant has lost his livelihood. A proper show cause notice is required to be issued for revoking of the CHA licence under Regulations 23 and same has not been issued so far. In these circumstances, he submits that action taken by the Commissioner of Customs, New Delhi for suspending the licence under Regulations 21(2) is not called for and the impugned order should be set aside.
The Id. Counsel relies upon the judgments of Calcutta High Court Division Bench in the case of N.C. Singha & Sons v. Union of India reported in 1998 (104) ELT 11 (Cal.).
2.2. Opposing the contention, Id. S.D.R., Shri Satnam Singh has reiterated the order passed by the Commissioner of Customs, New Delhi. He submits that sufficient care was not taken by the appellant to prevent an unauthorised employee of his to sign the shipping bill. He has been provided with a rubber seal as mentioned in the statement of CHA i.e. M.K. Awasthi and mentioned in para 12 of the show cause notice issued under Section 111 and 112 of the Customs Act. It was, therefore, necessary, he submits, to take this extreme step.
3. We have carefully considered the pleas advanced from both sides.
4. In order to understand the scope of provisions of Regulation 21(2), it is appropriate to set out the findings of the Calcutta High Court in paras 4 and 5 relied upon by the Id. Advocate.
We have heard the learned Advocates for the parties and considered the rival contentions. Regulation 21(2) of 1984 Regulations read thus:
21(2) Notwithstanding anything contained in Sub-regulation (1), the Commissioner may in appropriate cases, where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated.
A perusal of the order dated 9th June, 1988 passed by the respondent No. 2 clearly suggests that the power under Regulation 21(2) was resorted to ap- parently without spelling out in the impugned order as to whether any immediate action was necessary so as to suspend the licence of the appellants with immediate effect. Undoubtedly a plain reading of the Regulation 21(2) clearly stipulates that the requirement to take immediate action is a sine qua iiou to the suspension of a licence under Regulation 21(2) because such suspension is not by way of any punishment, as is contemplated by Regulation 21(2), but is required to cater to a situation warranting immediate action. The purpose of resorting to immediate suspension of a licence because of some immediate action is to immediately stop the activities of clearing agent so as to disable him from taking any further action in the matter since, under a particular situation and under some given set of circumstances, the requirement of immediate action may demand that clearing agent may be immediately required to be prevented from working any further. The minimum that is required by the Commissioner to enable him to exercise such power is the spelling out of the circumstances in the order warranting the need to take such immediate action and to actually say that immediate action is indeed required in the matter. What we see from the impugned order dated 9th June, 1998 is that the expression "immediate action" itself is missing. That apart, what we find from the preamble, recitals and facts stated in the order is that the circumstances did not warrant the taking of immediate action in terms of Regulation 21(2) of the 1984 Regulation.
5. As observed by the Hon'ble Calcutta High Court, we note from the impugned order that there is no mention in the impugned order itself that an immediate action if called for. Apart from that, we observe that the irregularity was detected as early as on 22.7.1998. The statements, etc. were also recorded thereafter. A show cause notice has been separately issued for proceeding under Section 111 and 112 of the Customs Act including, inter alia, the appellant herein. The facts, as they come out, do not call for immediate action against the appellant so as to call for suspension of licence.
6. Regulation 21(2) of CHALR is not a penal provision. Its purpose is to invoke the provisions in those cases where an immediate action is necessary against a CHA such as continuance of his licence will jeopardise the Revenue or enquiry in any particular case. Suspension of licence should be followed up cxpeditiously by a notice under Regulation 23. It is not so in the present case.
7. Accordingly, we set aside the impugned order and allow the appeal by remand. However, the Revenue is at liberty to proceed against the appellant in terms of Regulation 23, if it so wishes.
8. At this stage Id. Advocate prays for receiving the order dasti. We accede to the request of the Id. Advocate.
(Dictated in Court).