APPLICATION FOR MODIFICATION OF ORDER OF TRIBUNAL WHILE IMPLEMENTATION OF STAY ORDER OF TRIBUNAL IS PENDING

[Mr. M. GOVINDARAJAN]

In 'Parikh Clearing Agency Private Limited V. Commissioner of Customs, Ahamedabad' - 2009 -TMI - 76819 - (CESTAT, AHMEDABAD) the appellant is a Customs House Agent. The Department suspended the CHA licence of the appellant. The appellant filed against the order of Commissioner before the Tribunal and the Tribunal vide their order dated 12.10.2009 allowing the stay petition. The appellant filed a misc petition seeking the Tribunal directing the Department to implement the stay order. The Department also filed a misc. petition seeking modification of the order passed by the Tribunal on the following grounds:

* There are decisions of Bombay High Court and Madras High Court holding that no notice is required to be served before the licence is suspended;

* Had these decisions brought to the notice of the Tribunal, the Tribunal would not have granted interim relief and therefore modification of order is sought.

The Tribunal first took the application filed by the Department seeking modification of the order of the Tribunal. The Tribunal found that the decisions of the High Courts cited by the Revenue in support of modification application hold that procedure contemplated under Regulation 22 of Customs House Agent Regulation would not be applicable for action to be taken under Regulation 20(2). Both the decisions do not necessarily hold that no opportunity be given to the Customs House Agent firm before suspension to present their case. Even in the order passed by the Tribunal, nowhere it has been stated that procedure as per Regulation 22 should have been followed. Therefore both the decisions are not relevant. Therefore modification of application filed by the Revenue has no merits and deserves to be rejected.

The Tribunal then took the application filed by the appellants seeking implementation of the stay order. The appellant fairly agreed that the application becomes infructuous since the matter has come up for final hearing on that day. Accordingly the Tribunal rejected the application of the appellant also. But the Tribunal wanted to comment about attitude of the Department in this case.

* The Tribunal found that the stay order was passed on 12.10.2009;

* The order was communicated vide letter dated 14.10.2009;

* The modification application has been field by the Revenue on 8.12.2009;

* As per the appellants the modification application has been filed by the Revenue only after the appellant had written two letters to the department seeking implementation of the stay order;

* Suffice it to say that judicial discipline required the department to follow the decision of the Tribunal and implement it or file appeal before the Hon'ble High Court to get stay'

* Further the application shows lack of application of mind on the part of the officers since nowhere in the order it was stated that regulation 22 is required to be followed and miscellaneous application filed itself has no relevant to the order;

The appellant cited two decisions of the Supreme Court in the case of 'Baldev Singh and others' - AIR 1987 SC 1239 and in the case of 'Rattan Lal Sharma V. Managing Committee and others' - AIR 1993 Supreme Court 2155 in which the Apex court held that where administrative action leads to a civil consequence to citizens, principles of Natural Justice is required to be observed. What this decision means is that while show cause notice may not be required and personal hearing is given to the concerned person to present his case before the order leading to civil consequences, is passed. The Tribunal found that these decisions are applicable to the present case and there was no harm if the applicant was given a week's time to explain their case and there after suspension order was issued. This also has not been done.

The Tribunal took up the matter for final hearing. The appellant put forth the following submissions:

* What was required was not a formal issue of show cause notice and passing order is required under Regulation 22 of the Customs House Agent Regulations;

* Both the decisions cited by the Revenue also took the same view that procedure under Regulation 22 need not to be followed but none of the decisions ruled out the possibility of hearing;

* As per the Supreme Court judgments relied on by the appellants, the appellants should have been given opportunity to present their case before suspension;

* The order of the Commissioner has not made any clear findings as regards the role of CHA firm; He relied upon the decision of Delhi High Court in 'Jasjeet Sing Marwaha' - 2009 -TMI - 32985 - Delhi High Court in support of his contention that once the guilt of the CHA is established or confession statement made by him under Customs Act is available, suspension can be effected without formal enquiry. But in this case there is no such finding by the Commissioner;

* The appellant has been working as CHA for past sixteen years and this is the first time such an incident has occurred;

* No details are given in the Order-in-Original as regards the charges leveled against CHA;

* The appellants have several corporate clients;

* The appellant was willing to give an undertaking to the Department not to work for any individual till the issue is decided.

 The Department put forth the following submissions:

* There is clear finding against the CHA firm that they not only got involved in misdeclaration but also in view of email recovered from the office of CHA, which indicates that CHA firm failed to perform their role and it worked for the importers even without knowing who they are;

* On receipt of show cause notice CHA firm continued to work for the same promotions;

* In the above circumstances suspension order was warranted and has been correctly ordered.

The Tribunal after hearing both sides agreed with the contention of the appellants that the action of the Commissioner led to civil consequences and suspension would mean that CHA firm would not be able to undertake their activity of CHA work and therefore the decisions of the Supreme Court relied upon by the appellants are squarely applicable to the present case.

The Tribunal relief on the decision of the Larger Bench in 'Freight Wings and Travels Limited' - 2001 (129) ELT 226 (Tri. Larger Bench) in which it was held that if the action required was immediate and opportunity could have given prior to passing the order and at least post decisional hearing could have been given. In this case even after the stay order was passed by the Tribunal no remedial action has been taken. Instead, the Department has chosen to file miscellaneous application. In the order itself it was clearly observed that "it appears that CHA firm was knowingly involved in mis-declaration of cargo and it appears that they have failed to perform their function as per law". The only objection was that Commissioner should have given opportunity. The Tribunal regretted to note that in spite of the clear order no opportunity has been given till date. Another aspect is that there is no finding in the Commissioner's order that the suspension order has been issued pending enquiry or enquiry was contemplated. Regulation 20(2) provides that notwithstanding anything contained in sub regulation (1) the Commissioner of Customs 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. Even though more than four months are over no action appears have to be taken to order an enquiry as required under the regulations and neither there is any mention of contemplation of any enquiry. The Tribunal set aside the order of Commissioner (Appeals).