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Him Logistics Pvt. Ltd. Versus The Commissioner of Customs (General)

2015 (11) TMI 380 - DELHI HIGH COURT

Revocation of CHA License - forfeiture of the security - Imposition of penalty - Regulation 22 read with Regulation 20 of the Customs Brokers Licensing Regulations, 2013 - whether the principal commissioner or commissioner of customs, as the case may be, is bound to accept the inquiry report, if it is in favour of the Custom Broker or can he disagree with the same - Held that:- Inquiry report is in favour of the petitioner and exonerates him. Mere communication of the inquiry report, which is in .....

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o the petitioner prior to the adverse decision being taken by the Commissioner of Customs, there was clearly a violation of principles of natural justice. The Commissioner of Customs should have recorded the reasons for disagreement and forwarded the same to the petitioner for his comments before passing the impugned order. Because of failure to do so, the impugned order is clearly in violation of the principles of natural justice. - impugned order cannot be sustained - commissioner to decide th .....

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se Agent (CHA for short) licence of the petitioner and ordered forfeiture of the security furnished by the petitioner and further imposed a penalty under Regulation 22 read with Regulation 20 of the Customs Brokers Licensing Regulations, 2013 (hereinafter referred to as the CBLR, 2013). 2. Though the impugned order is an appealable order, the petitioner has approached this Court under Article 226 of the Constitution for exercise of its writ jurisdiction on the ground that the order has been pass .....

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entertaining this petition under Article 226. 4. On 01.11.2014, a show-cause notice was issued to the petitioner along with an importer to show-cause as to why penalty should not be imposed upon them for violation of the Customs Act, 1962 and Rule 13 of the Customs House Agents Licensing Regulations, 2004. A detailed reply to the same was filed by the petitioner. 5. On 14.02.2015, another show-cause notice was issued to the petitioner to show-cause as to why its CHA licence should not be revoke .....

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provisions of the Regulations 11(a), 11(d), 11(e) and 11(n) of the CBLR, 2013 and exonerated the petitioner from all charges. 7. On 10.06.2015, a copy of the inquiry report was furnished to the petitioner, and the petitioner was directed to submit his representation against the same, within thirty days. On 13.07.2015, the petitioner, in response to the furnishing of the inquiry report, submitted a representation to the Commissioner stating that it agreed with the report of the Inquiry Officer an .....

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same be accepted and the suspension of the licence of the petitioner be revoked. 8. By the impugned order dated 01.09.2015, the Commissioner of Customs disregarding the inquiry report, has revoked the petitioner s CHA licence and has directed forfeiture of the security deposit and imposed penalty under Regulation 22 read with Regulation 20 of the CBLR, 2013. 9. The petitioner has impugned the order contending that the Commissioner of Customs could not have disregarded the findings returned in th .....

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for disagreement and to answer/explain any adverse material. 10. The questions that arise for consideration are: (i) whether the principal commissioner or commissioner of customs, as the case may be, is bound to accept the inquiry report, if it is in favour of the Custom Broker or can he disagree with the same?, and (ii) in case the answer to question no. (i) is that the commissioner can disagree with the inquiry report, then is it necessary for him to communicate the reasons for disagreement t .....

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ort, 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 rece .....

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cumentary 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 o .....

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. (6) The 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 Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the .....

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heard in person by the Commissioner of Customs. xxxx xxxx xxxx 22. Penalty.- A Customs Broker, who contravenes any provisions of these regulations or who fails to comply with any provision of these regulations shall be liable to a penalty, which may extend to fifty thousand rupees. 12. Sub-regulations 5, 6 and 7 of Regulation 20 of CBLR, 2013 stipulate that the Inquiry Officer shall prepare a report and record his findings within ninety days from the date of issuance of notice under sub-Regulati .....

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ommissioner of Customs, as he deems fit, may pass orders, revoking the suspension of the licence or revoking the licence of the Customs Broker or imposing penalty not exceeding the amount mentioned in Regulation 22. It is provided that no order for revoking the licence 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. 13. The fact that the Principal Commissioner of Cu .....

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icense and it is the Commissioner who is empowered to pass such orders as he deems fit after considering the inquiry report and the representation of the CHA, if any. Therefore, whether the inquiry report is in favour of the CHA or not, it is the Commissioner who has to pass the final order as he deems fit on the show cause notice issued by the Commissioner. The words such orders as he deems fit in Regulation 22(7) leave no manner of doubt that it is entirely at the discretion of the Commissione .....

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). 14. The answer to question no. (i) is clearly that the principal commissioner or commissioner of customs, as the case may be, is not bound to accept the inquiry report, if it is in favour of the Custom Broker and he can disagree with the same. 15. Coming to question no. (ii). The opportunity of hearing, as contemplated by Regulation 20, envisages that the Customs Broker should be provided the material, which is to be used against him for passing an adverse order, so he is in a position to reb .....

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im and the Principal Commissioner of Customs or the Commissioner of Customs, as the case may be, intends to disregard the inquiry report on the basis of any material available or reason, then the principles of natural justice require that the said material/reasons must be communicated to the agent to enable the agent to rebut, qualify or explain the same and to show cause against the proposed adverse action. In the absence of communication of adverse material/reasons, the Customs Broker would no .....

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ner to rebut, qualify or explain the adverse material and show cause against the proposed adverse action. Principles of natural justice required that before an adverse decision was taken against the petitioner, the petitioner should have been communicated the adverse material/reasons for disagreement. The fact that the reasons for disagreement were not communicated to the petitioner prior to the adverse decision being taken by the Commissioner of Customs, there was clearly a violation of princip .....

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