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Commissioner of Customs & Service Tax Versus M/s. SDV International Logistics Ltd.

2015 (8) TMI 489 - KARNATAKA HIGH COURT

Renewal of Customs Brokers License – Rejected – Misconduct and suppression of information – Respondents application for renewal of License was rejected by Appellant, on ground of information of misconduct received from various port of country, therefore, show cause notice was issued – Tribunal by impugned order reversed decision of Commissioner – Held that:- Commissioner denied renewal of licence primarily on ground that there was complaint of misconduct and also because respondent had suppresse .....

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required to be furnished by respondent at time of making declaration – Appeal hereby allowed – Decided in favour of Revenue. - C.S.T.A. No. 7/2014 - Dated:- 24-6-2015 - Vineet Saran And Aravind Kumar, JJ. For the Appellant : Sri G Rajagopalan, Addl. Solicitor General & Sri N R Bhaskar, CGSC For the Respondent : Sri Shivadass G And Sri Harish R, Advs JUDGMENT The present appeal is with regard to the renewal of the Customs House Agent (now Customs Broker) Licence of the respondent. 2. Brief fa .....

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licence as a Customs Broker. In the said application, certain declarations had to be made in terms of Regulations 5 and 9(2) as well as the Public Notice No.2/2014 (CUS) which were duly provided by the respondent along with the application forms. After filing of the application by the respondent, certain information was gathered by the appellant from the Customs Office of the various ports in the Country and on the basis of such information received, a notice dated 08.04.2014 was issued to the r .....

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Zonal Bench, Bengaluru, which has been allowed by the Tribunal vide its order dated 23.05.2014. Aggrieved by the same, Commissioner of Customs and Service Tax has filed this appeal. 3. Though the appeal was admitted on 12.08.2014 but no question of law was framed at that stage. However, learned counsel for the parties have agreed that questions of law as framed in the appeal are the substantial questions of law required to be answered, which are reproduced below: (i) "WHETHER the impugned .....

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ustoms Brokers Licensing Regulations? (iii) WHETHER the CESTAT is right in holding that the Commissioner has to independently examine the gravity of the offence even before the proper authority in the respective proceedings passes an order in the said matter? (iv) WHETHER the CESTAT is right in passing the impugned order particularly in view of the fact that the allegations of misconduct and offences charged directly relate to the proper administration of the Customs Act and Regulations framed t .....

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ondent and perused the record. 5. The Commissioner of Customs has denied renewal of licence primarily on the ground that there was a complaint of misconduct against the respondent and also because the respondent had suppressed material information required to be declared under Regulation 5(d) of the Regulations, 2013 read with Public Notice No.2/2014(CUS), which was to the effect that the applicant was to disclose about any criminal proceedings pending against it in any Court of law and despite .....

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activity but with regard to the activity as a Customs Broker, and such being the position, it could not be said that the respondent - applicant did not have knowledge of the pendency of the criminal case. It has also been submitted that under Regulation 9(2) of the Regulations of 2013, there being a complaint of misconduct against the respondent with regard to the conduct of the operation of his licence, the rejection of the renewal of licence in the case of the respondent was perfectly justifi .....

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that there was no mis-declaration made by the respondent and in the facts of the present case, refusal to renew the licence could not have been ordered. 8. Learned counsel for the respondent further submitted that the criminal case which was pending against respondent was in Kolkata and not in Bengaluru and that too, for the incident which took place in the year 2009 for which a charge sheet was submitted in the year 2011 and since then the licence of the respondent has neither been suspended no .....

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ts of the case for the following reasons. 10. The conditions to be fulfilled by an applicant for grant of licence is provided for in Regulation 5 of the Regulations, 2013. The relevant provisions of renewal of licence are contained in Regulation 9 of the Regulations, 2014. Said Regulations are reproduced below: "5. Conditions to be fulfilled by the applicants: - The applicant for a licence to act as Customs Broker in a Customs Station, shall prove to the satisfaction of the Commissioner of .....

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l be valid for a period of ten years from the date of issue and shall be renewed from time to time in accordance with the procedure specified in sub-regulation(2): Provided that a licence granted to a Customs Broker, authorised under the Authorised Economic Operator Programme referred to in Board's Circular No.28/2012 - Customs dated 16.11.2012, shall not require renewal till such time the said authorization is valid. (2) The Commissioner of Customs may, on an application made by the licence .....

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US) dated 20.01.2014 was issued indicating the procedure to be adopted for renewal of Customs Broker Licence. Under the said notice 16 conditions have been prescribed. Relevant extract of paragraphs 2 and 3 are reproduced below: 2) "The application for the renewal of Customs Broker Licence, which is due for renewal, shall be submitted to this office, at least 90 days prior to the due date of expiry, along with the following documents:- (i) Application in Form A as per CBLR, 2013 duly signed .....

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judicial cases are pending against them; the details and status of each case, if any judicial/quasi judicial case is pending; that no arrears are payable to the Department. (3) On receipt of the above documents, an antecedent verification will be conducted and due procedure will be followed for renewal or otherwise of the Customs Broker Licence. After approval for renewal is accorded by the Commissioner of Customs, the same shall be intimated to the Customs Broker concerned." 12. It is not .....

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ted, hereby declare that there are no changes in the constitution, there is no change in address, there was no time expired/inoperative cards in Forms G/H etc., there are no pending submissions to the department, we maintain accounts as per Regulation 16 of CBLR, 2013, there are no judicial/quasi judicial cases pending and there are no arrears payable to the department in Bangalore." 13. A perusal of the said declaration would explicitly make it clear that it was a categorical statement mad .....

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he Country and thus, it cannot be said that he was required to give declaration only with regard to pendency of any criminal case against it in Bengaluru and not anywhere else. Even otherwise, if we look at it from the point of view of respondent and accept the submission of learned counsel for the respondent, then, it will have to be necessarily held that it was a very clever way of circumventing the making of a full and proper declaration by stating that there was no judicial or quasi judicial .....

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eclaration and filing the application and would be sufficient reason for rejecting the application for renewal. Respondent is clearly guilty of "suppresioverisuggestiofalsi" - "suppression of truth and suggesting falsehood". 14. Learned counsel for the respondent has relied on a decision of Calcutta High Court in the case of MONTOSH KUMAR SAHA vs UNION OF INDIA AND ORS -( 2014 TIOL 752 ) to support his submission that since the charges against the respondent had not been prov .....

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nding and the applicant had deliberately suppressed such material information of pendency of criminal case as is in the present case. 15. The facts obtained in MONTOSH KUMAR SAHA's case referred to herein supra would clearly indicate that petitioner therein had applied for grant of fresh Customs House Agents Licence and same was rejected on the ground of charge sheet under Section 419/468/471 IPC having been lodged before Baranagar Police Station. It has been noticed by the High Court of Cal .....

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nterse dispute between the partners (brothers), which was challenged before the High Court in the earlier round i.e., in W.P.No.16945/2010 which came to be disposed of on 25.01.2011 by observing as under: "When one of the two partners of a partnership firm has sought suspension of the licence granted to the partnership, the licence cannot be allowed to operate. The licence would necessarily have to be cancelled. The partnership firm cannot continue with a licence under the Customs House Age .....

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o be disposed of by holding as under: "We, thus, find that in the facts of the present case, the ultimate conclusion arrived at by the learned Single Judge was correct. We, therefore, dispose of the appeal by maintaining the order passed by the learned Judge. We make it clear that we have, otherwise, not gone into the dispute and only because, one of the partners of the licensee is not willing to act as such licensee along with the other partner, we direct the Customs Authority to terminate .....

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