TMI Blog2015 (11) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... the duties of an agent, and in that sense, the authority of the CHA, is provided for in the definition of customs broker, in regulation 2(c) of the Customs Brokers Licensing Regulations, 2013 It is no part of the usual and ordinary duty of the CHA to accept service of orders, summons, decisions or notices issued by the custom authorities. In case CHA represents, he has such an authority, he would have to produce the same before the concerned statutory authority. In this case the respondents neither sought production of the authority nor did the CHA supply any such documents to the custom authorities, which could, in the ordinary course, have persuaded them to serve the notices on the CHAs. Therefore, in the ordinary course, the customs authorities were required to follow the provisions of Section 153 of the Act, which required the service to be effected on the importer i.e. the petitioner in this case. - There is a proviso to sub-section (3) of Section 147, which in a sense protects the agent, save and except against his wilful act, negligence or default. The proviso is indicative of the fact that where any duty is not levied, or is short levied, or is erroneously refunded, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of six (6) months without issuing a show cause notice as contemplated under Section 110(2) of the Act. 1.2 The show cause notice and the order passed thereof by the respondents to demonstrate that they have taken recourse to the proviso appended to Section 110(2) of the Act, which enables triggering of an extended period of six (6) months, has no legal sanctity, according to the petitioner, for the following reasons: (i) Firstly, the show cause notice seeking extension of time for compliance of the requirements of Section 124 of the Act, is ante-dated. (ii) Secondly, the service of show cause notice effected on the Customs House Clearing Agent (in short the CHA), is no service in the eyes of law, being contrary to the provisions of Section 153 of the Act. 2. The aforesaid are the broad contours of the issues which arise for consideration in the present writ petition. The reason, that I have set out these broad contours, is that, there are other connected writ petitions qua which arguments have been addressed by both sides, whereupon judgement has been reserved in each of those matters. The legal submissions advanced, in these cases, by both sides are common. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentations which followed, a request in the alternative, was made, that they be released based upon provisional assessment. 3.7 In the interregnum, the petitioner obtained a report of the Textile Committee; a body set up by the Ministry of Textiles, Government of India, in respect of samples drawn from the imported consignment by one of its associate firms. The Textile Committee vide its report dated 25.08.2014 confirmed that the sample submitted to it could be classified as polyester woven printed quilt case . 3.8 By a communication dated 26.11.2014, the Deputy Commissioner of Customs ordered provisional release of goods, which were the subject matter of the two bills of entry referred to above. As per the terms fixed for release (as indicated in the said communication), the petitioner was required to submit two PD Bonds in the sum of ₹ 19,59,246/- and ₹ 28,03,294/-, and two bank guarantees, in the sum of ₹ 11,22,453/- and ₹ 16,49,178/-. 3.9 The bank guarantees, as indicated in the communication, were of a value which was equivalent to 20% of the differential duty as the goods were assessed under CTH 54077400. 4. The aforementioned communica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its limited to the alleged infraction of the provisions of Section 110 (2) and 124(a) of the Act. 5.2 Since then respondent no. 1 and 2, which are the main contesting parties, have filed their counter affidavits. A perusal of the counter affidavit would show that it deals with all submissions including the submissions made in the writ petition with regard to violation of the provisions of Section 110(2) and 124(a) of the Act. This fact is being highlighted by me, as during the course of submissions, erroneously, the counsel for respondent no. 1 and 2 had conveyed that because of the limited nature of the notice, the counter affidavits filed were confined to only aspects which related to the alleged violation of Section 110(2) and Section 124(a) of the Act. 5.3 This statement was made by the counsel for respondent no.1 and 2, when arguments were sought to be advanced by the counsel for the petitioner in relation to Section 17 and 18 of the Act. Briefly, the counsel for the petitioner had attempted to convey to the court that even though in the letter dated 26.11.2014 the respondents had ostensibly ordered provisional release of the goods, they had in fact carried out a re-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid manner, it had to be affixed on the notice board of the customs house. In other words, it was the submission of the counsel that service of the show cause notice dated 23.01.2015, on the CHA, was no service in the eyes of law. It was contended by the learned counsel that not only was the service of the show cause notice made on the last date of the expiry of the period of limitation but also purported waiver of the petitioner s valuable right to personal hearing by its CHA, was accepted without the CHA being asked to tender his authority to represent the petitioner. 8. Mr. Nijhawan, who appeared for respondent no. 1 and 2, on the other hand, submitted that the goods of the petitioner along with those of 14 others, were seized, as the DRI, had a genuine concern that goods, which were printed fabric, were being imported as made up quilt covers by having the fabric folded at mid-length with loose stitching on two sides. 8.1 It was submitted that the respondents had obtained the opinion of the Apparel Export Promotion Council (in short the AEPC), as also that of the Textile Committee. Learned counsel submitted that the AEPC had opined that the sample submitted to them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to avoid accumulation of demurrage and detention charges. 8.8 The learned counsel further submitted that order dated 23.01.2015 is an appealable order and, therefore, an alternative remedy being available to the petitioner, the instant writ petition ought not to be entertained. REASONS 9. Having perused the record and heard the learned counsels for the parties, what has emerged, is as follows: (i) The petitioner has imported goods which have been classified as quilt covers. The bill of entries were filed accordingly, and requisite duty, was deposited, as per the classification made by the petitioner. (ii) The DRI, however, detained/ seized the goods on 25.07.2014. A panchnama of even date was drawn up and samples were taken. The samples were sent by the DRI to AEPC, and the Textile Committee. While the AEPC opined that the samples could be categorized as fabric, or upholstery fabrics, the Textile Committee only opined upon the composition of the samples. (iii) On the other hand in the report dated 25.08.2014, submitted by the Textile Committee to the petitioner, the conclusion reached was that the sample could be classified as polyester woven printed quilt case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om whom they were seized. There is no ambiguity in the statute, with regard to this position. 10.2 Sub-section (2) of Section 110 is, however, impregnated with the caveat, which is provided for in the form of a proviso. The proviso to sub-section (2) of Section 110 states that the period of six (6) months provided therein, may be extended by the Commissioner of Customs, on sufficient cause being shown, by another period not exceeding six (6) months. 10.3 In the facts obtaining in this case, if the date of dispatch, by post, of the show cause notice dated 23.01.2015 is taken into account, then, clearly, on a plain reading of provisions of Section 110(2) read with Section 124(a), the respondents would have to return the goods to the petitioner. The reason for the same being, that the show cause notice dated 23.01.2015, seeking to trigger the extended period provided for in the proviso to sub-section (2) of Section 110, was dispatched only on 30.01.2015. 10.4 The respondents, however, have tried to meet this challenge by taking shelter under the factum of receipt of show cause notice by the CHA, on 23.01.2015. A careful perusal of the receipt appended with the counter affidav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s had not been received from the Textile Committee in respect of all samples sent to it save and except in two cases, one of which involved the petitioner and the reference in this regard is given to bill of entry no. 6097566 dated 15.07.2014, and the other involving an entity by the name of Balaji Handloom; concerning bill of entry no. 6209855 dated 23.07.2014. It is further stated that likewise expert opinion of AEPC had not been received save and except in the case of petitioner and the Balaji handloom. In the case of the petitioner and the Balaji Handloom, it is stated that even though the test report of the Textile Committee and expert opinion of the AEPC had not been received, since the said entities had not declared the Unit Quantity Code against each tariff item, the quantification of goods in square meters was required to be done for calculation of duty which necessitated the re-examination of the goods. 11. Though, whether this reason, would constitute a sufficient ground for extension of time appears to be weak as in the petitioner s case, the AEPC s opinion was received on 14.08.2014, while the Textile Committee report was generated on 04.09.2014 - even if one were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions of the customs authorities, unless he has been specially authorized to do so. The CHA s explicit and implied authority is confined to his acts, as an agent, qua transactions relating to business concerning entry or departure of conveyances or, import or export of goods at the custom stations. In case the importer or exporter, in this case the petitioner, were to enlarge his authority, a specific authorization in that behalf ought to have been issued in his favour. The scope of the duties of an agent, and in that sense, the authority of the CHA, is provided for in the definition of customs broker, in regulation 2(c) of the Customs Brokers Licensing Regulations, 2013 (in short the 2013 Regulations). The said definition reads as follows: ..... (c) Customs Broker means a person licensed under these regulations to act as agent for the transaction of any business relating to the entry or departure of conveyances or the import or export of goods at any Customs Station;... 11.4 In case the CHA, represents to the customs authorities that he has the authority to accept orders, notices, summons, orders or decisions, it is incumbent upon him to produce the same before the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt in respect of proceedings under Section 108 of the said Act. In the category of authorized representatives, there is a reference to a CHA, who has obtained his licence under Section 146 of the Act. The other persons, who have been included in the definition are a relative; or a regular employee, a legal practitioner, who is entitled to practice in any civil court in India; or any person who has acquired such qualifications as the Central Government may specify in the rules made in this behalf. There are other sub-sections appended to Section 146A, which I do not propose to refer to as they are not relevant for the present case. 12.3 Section 147 provides for liability of a principal and agent. Sub-section (1) of Section 147 provides, where anything under the Act is required to be done by the owner, importer or exporter of any goods, it may be done on his behalf by his agent. 12.4 Sub-section (2) provides that any act done by the agent of the owner, importer or exporter of any goods, shall unless contrary is proved, be deemed to have been an act done, with the knowledge and consent of such owner, importer or exporter, so that, in any proceedings, the owner, importer or expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority to act in the matter. That, however, will not authorise the CHA to dawn the robe of an authorized representative, as envisaged in section 146 of the Act. If that was not the position, then to my mind, there was no need for the legislature to make a provision for that purpose, and thereby, specifically, include CHA in sub-section (2), clause (b) of Section 146A of the Act. 13.2 In so far as Section 147 is concerned, it statutorily recognizes the principle of agency. Therefore, sub-section (1) of Section 147 statutorily recognizes the fact that anything which an owner, importer or exporter of goods is required to do, it can be done on his behalf by an agent. Therefore, quite logically, sub-section (2) of Section 147 provides that if, any act is done by the agent of an owner, importer or exporter of goods, then it shall be deemed to have been done with the knowledge and consent of such an owner, importer or exporter. The purpose being, that the principal can be held liable in a proceedings carried out under the Act for the acts done by his agent as if they were done with his knowledge and consent. 13.3 Sub-section (3) of Section 147 creates a deeming fiction, and in tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or authorized to appear for him before the concerned statutory authority. The amendment in that sense lends greater clarity qua the scope of the provision. 14. Thus, to my mind, the argument of Mr Nijhawan that service on the CHA of the show cause notice dated 23.01.2015, would meet the rigour of the law, is untenable in law. 15. If this argument falls, as it does in my opinion, then surely the entire edifice of the defence mounted by respondent no.1 and 2 would also fall. Consequently, the respondents, in accordance with the mandate of the law which has received judicial imprimatur, would be required to release the goods seized, to the petitioner. 16. Before, I conclude I must deal with the argument of Mr. Nijhawan that there is an alternative remedy available to the petitioner by way of an appeal, and therefore, the writ petition ought not to be entertained. According to me, this submission, will not help the cause of the respondents in this case as the entire proceedings for the reasons indicated above were beyond jurisdiction, therefore, this plea of the respondents is rejected. 17. Which brings me to a question, as to whether the confiscation proceedings can procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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