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2016 (3) TMI 609 - MADRAS HIGH COURT

2016 (3) TMI 609 - MADRAS HIGH COURT - 2016 (336) E.L.T. 437 (Mad.) - Violation of principles of natural justice - Contravention of Regulations 11 and 18 of Customs Brokers Licensing Regulations, 2013 - Whether Commissioner of Customs in exercise of the powers conferred under Regulation 23 prohibited respondent from working in any section or sections of the Customs Commissionerate and Customs station, under the jurisdiction of Chennai Customs Zone, with immediate effect without giving an opportu .....

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against the appellant - W. A. (MD) No. 359 of 2016, C. M. P. (MD) No. 2269 of 2016 - Dated:- 3-3-2016 - S. Manikumar And C. T. Selvam, JJ. For the Appellants : Mr. R. Aravindan Senior Panel Counsel for Central Government For the Respondent : Mr. N. Dilip Kumar JUDGMENT ( Judgment of the Court was made by Hon'ble Mr. Justice S. Manikumar ) Material on record discloses that in exercise of the powers conferred under Regulation 23 of the Customs Brokers Licensing Regulations, 2013, the Commissi .....

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stoms station under the jurisdiction of Chennai Customs Zone, with immediate effect. However, all documents already filed prior to this order will be allowed to be completed. 15. Since the Customs Broker Licence was issued to M/s Daniel & Samuel Logistics Pvt Ltd., by Tuticorin Commissionerate, the further course of action will be initiated by them under Customs Broker Licencing Regulation, 2013, as per the instructions contained in para (iii) 5.2 of Board's Circular No.09/2010 Customs d .....

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ourt in A.M.Ahamed and Co .vs. Commissioner of Customs, Tuticorin reported in 2013 (288) ELT 497 (Madras) and of the decision of Calcutta High Court in Shipping and Clearing (Agents)Private Limited .vs. Union of India reported in 2014 (308) ELT 45 (Cal), a Learned Single Judge has quashed the order, dated 30.03.2015, in proceeding No.F.No.S2/24/2010-CHA, and remanded the matter back to the respondents, to consider the matter afresh, after giving show- cause notice to the respondent. 3. Assailing .....

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t Jaipur in Pinkcity Logistics Ltd., Vs. Commissioner of Customs reported in 2015 (320 ELT 241 (Raj) wherein, the decision of this Court reported in 2013 (288) ELT 497 (Madras) (cited supra) has been considered. It is the submission of learned counsel for the appellants that, when Regulation 23 of the Customs Brokers Licensing Regulations, 2013, does not contemplate a pre- decisional opportunity, prohibition can be made, if there are serious violations of the Licensing Regulations, 2013. Heard l .....

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ion of the Customs Commissionerate and Customs station, under the jurisdiction of Chennai Customs Zone, with immediate effect. It is also stated that further course of action could be initiated under the Customs Brokers Licensing Regulations, 2013, as per the instructions contained, in para (iii) 5.2 of Board's Circular No.09/2010 Customs, dated 08.04.2010. 5. When the impugned order was tested before the Writ Court, on the ground inter alia that it is violative of principles of natural just .....

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ny power to exercise of jurisdiction under Regulation 22. 6. It is now well-settled law that even administrative orders which affects the rights of a party can be passed only by following the principles of natural justice. That order under Regulation 21 was passed in violation of principles of natural justice on the face of it is arbitrary and thus not sustainable in law. 7. The Writ Petition accordingly is allowed. The impugned order is set aside. However, liberty is granted to the respondent t .....

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ience. The party should be made aware of the allegations made against him which may result into a penal order and any infraction shall entail the action liable to be struck down for violation of principles of natural justice. It would be apt to quote paragraph 19 of the said judgement:- ''19.Natural justice is the essence of fair adjudication, deeply rooted in tradition and conscience, to be ranked as fundamental. The purpose of following the principles of natural justice is the preventi .....

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(203) E.L.T 549(Mad), suspension of the operation of licence of the customs or agent under the then Customs House Agents Licensing Regulations, 2004, now Customs Brokers Licensing Regulations, 2013, was challenged, on the grounds inter alia that there was no prior show-cause notice. Adverting to the above contention and after considering the relevant Regulations 20 to 23 of the Customs House General Licensing Rule, 1984 and the decision of Hon'ble Apex Court, as to when there would be a lega .....

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lso a censure on ecclesiastical persons, during which they are forbidden to exercise their office or take the profits of their benefices. (ii) Suspension' means, "action of debarring or state of being debarred, especially, for a time, from a function or privilege; temporary deprivation of one's office or position, or again, state of being temporarily kept from doing or deprived of something. (iii) Suspension as per Black's Law Dictionary: 7th Edn. Pg.1460 means, (1) to interrupt .....

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(as) office, work or labour. (v) The act of debarring for a time from a function or privilege . It means a temporary deprivation of once office or position. The suspended officer does not cease to be a public servant, he is only prevented from discharging the duties of his office for the time being. [K.J. Aiyar s Judicial Dictionary, 14th Edn.] (vi) Suspension, according to Oxford Dictionary, means, The action of suspending or condition of being suspended, the action debarring especially for a .....

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t a person while holding an office and performing its functions of holding a position or privilege should be interrupted in doing so and debarred for the time being from further functioning in the office or holding the position and privilege. He is intercepted in the exercise of his functions of his employment of the privilege and put aside, as it were, for a time, excluded during the period from his functions or privileges. Such is the concept of a suspension order. Reference can be made to the .....

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issenting with the views expressed by the Nagpur Bench in Provincial Government, C.P., and Berar v. Syed Shamshul Hussain reported in AIR 1949 Nag. 118 (C), at Paragraph 5, held that, "Therefore under Art. 311, Cl.(2), the penalties contemplated there, for which a statutory safeguard of a reasonable opportunity of showing cause against the action proposed to be taken in regard to him is provided, are dismissal, removal or reduction in rank. On a reading of the decision of the Supreme Court, .....

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ld not be suspended." (ii) Explaining the nature of the order of suspension, as to whether it is administrative or quasi-judicial, and whether a government servant should be given an opportunity, before suspending him from service, the Hon'ble Supreme Court in Pratap Singh v. State of Punjab reported in AIR 1964 SC 72, held that it cannot be said suspension of a Government servant, without calling him to explain the charges first, was bad, as the proceedings to suspend him, were not of .....

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efore suspending a Government servant pending enquiry. Such orders of suspension, can be passed, if the authority concerned, on getting a complaint of misconduct, considers that the alleged charge, does not appear to be groundless, that it requires enquiry and that it is necessary to suspend the Government servant pending enquiry. (iii) In State of Orissa v. Shiva Parashad Das reported in 1985 (2) SCC 65, the Hon'ble Supreme Court tested the correctness of the order of suspension, on the gro .....

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t pending disciplinary enquiry is neither one of dismissal nor of removal from service within Article 311 of the Constitution. This position was clearly laid down by a Constitution Bench of this Court in Mohammad Ghouse v. State of Andra [1957 SCR 414]. It is unfortunate that this decision was not brought to the notice of the learned Judges of the High Court. Clause (1) of Article 311 will get attracted only when a person who is a member of Civil Service of the Union or an All India Service or a .....

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gainst the respondent on the ground that it was violative of clause (1) of Article 311 of the Constitution." (iv) The Hon'ble Division of Gujarat High Court in Vagadia Parambhai Bhurabhai v. T.J.Trivedi reported in 1987 (1) SLR 648, while dealing with the similar question, at Paragraph 6, held as follows: "The above observation makes it abundantly clear that the application of the rule of natural justice of being heard before any administrative order having civil consquences of is .....

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quired to be taken with promptitude, having regard to the circumstances of the case on hand. Inflexible and rigid application of the rule of audit alteram partem to R.5 of the rules would have the effect of setting at naught the very object or purpose of placing a civil servant under suspension. If a civil servant charged of committing an act involving moral turpitude cannot be placed under suspension unless he is given an opportunity of showing cause against the proposed order, he would continu .....

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e, therefore, do not think that R.5 is ultra vires the Constitution on the plea that the procedure prescribed thereunder is in violation of the principles of natural justice." 10. Mr.R.Aravindan, learned Senior Panel Counsel for Central GovernmentLearned Senior Standing Counsel appearing for the appellants fairly admitted that though the nomenclature of Customs House Agents Licensing Regulations, 2004, has been changed in the year 2013, as Customs Brokers Licensing Regulations, 2013, Regula .....

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rohibit any customs Broker from working in one or more sections of the Customs Station, if he is satisfied that such Customs Broker has not fulfilled his obligations as laid down under regulation 11 in relation to work in that section or sections. 12. Reading of the said Regulation makes it clear that the Commissioner of Customs may prohibit any customs Broker from working in one or more sections of the Customs Station, if he is satisfied that such Customs Broker has not fulfilled his obligation .....

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;'18. Revocation of licence or imposition of penalty.- The Commissioner of Customs may, subject to the provisions of regulation 20, revoke the licence of a Customs Broker and order for forfeiture of part or whole of security, or impose penalty not exceeding fifty thousand rupees on a Customs Broker on any of the following grounds, namely : (a) failure of to comply with any of the conditions of the bond executed by him under regulation 8; (b) failure to comply with any of the provisions of th .....

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ce to the action that may be taken against the Customs Broker or his employee under the provisions of the Customs Act, 1962 (52 of 1962) or any other law for the time being in force. 19. Suspension of licence.- (1) Notwithstanding anything contained in regulation 18, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending or contemplated. (2) Where a licence is suspended unde .....

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eafter shall be as provided in regulation 20. 20. Procedure for revoking licence or imposing penalty. (1) The Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, 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 .....

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issioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall, in the course of inquiry, consider such documentary 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 th .....

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oner of Customs or Assistant Commissioner of Customs, as the case may be, shall prepare a report of the inquiry and after recording his findings thereon submit the report within a period of ninety days from the date of issue of a notice under sub- regulation (1). (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, wit .....

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he date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5) : Provided that no order for revoking the license shall be passed unless an opportunity is given to the Customs Broker to be heard in person by the Commissioner of Customs. 21. Appeal by Customs Broker.- A Customs Broker, who is aggrieved by any order passed by the Commissioner of Customs under these regulations, may prefer an appeal under section 129A of the A .....

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ustoms Broker and order for an enquiry. By following the procedure set out in Regulation 20, he can revoke the licence. Instead of suspending or revoking the licence, under Regulation 23, the Commissioner of Customs can also prohibit any Customs Broker from working in one or more sections of the Customs Station, if he is satisfied that such Customs Broker has not fulfilled his obligations as laid down under Regulation 11, in relation to work in that section or sections. Where immediate action is .....

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dicate a post decisional opportunity. But, reading of Regulation 21, indicates that a Customs Broker, who is aggrieved by any order of the Commissioner of Customs under the Regulations, may prefer an appeal, under Section 129 of the Act, to Customs, Excise and Service Tax Appellate Tribunal established under Sub Section 1 of Section 129 of the Act. Although it could be contended that an order under Regulation 23 can also be appealed to the Tribunal, the question is whether a Customs Broker can b .....

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remedy is indicated. In such a situation, it is against a unilateral decision, without any opportunity, the aggrieved party may have to file only an appeal, against the decision prohibiting him from working in a section or sections of the customs station. 14. Principles of natural justice is not a strait jacket formula. Needless to state that, if an order adverse to a person is passed, he should be provided with an opportunity. Principles of natural justice has not been excluded in Regulation 23 .....

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tion between quasi-judicial and administrative decision was perceptively mitigated and it was held that even an administrative order or decision in matters involving civil consequences, has to be made consistently with the rules of natural justice. Since then the concept of natural justice has made great strides and is invariably read into administrative actions involving civil consequences, unless the statute, conferring power, excludes its application by express language. (ii) It is trite that .....

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justice. These rules can operate only in areas not covered by any law validly made. They do not supplant the law but supplement it. (iii) In Canara Bank Vs. V.K. Awasthy, reported in 2005 (6) SCC 321 - AIR 2005 SC 2090 - 2005 (3) SCR 81, it has been held as follows:- "Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature .....

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sion 'civil consequences' encompasses infraction of not merely property or personal rights but of civil 'liberties, material deprivations, and non pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life." (iv) In M/s. Sahara India (Firm), Lucknow vs Commissioner Of Income, reported in 2008 (14) SCC 151, the Hon'ble Supreme Court held as follows:- ''15. Thus, it is trite that unless a statutory provision either specifically or .....

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ative or quasi-judicial.'' (v) In Automotive Tyre Manufacturers Assn. v. Designated Authority, reported in (2011) 2 SCC 258, the Hon'ble Supreme Court held as follows:- ''80. It is thus, well settled that unless a statutory provision, either specifically or by necessary implication excludes the application of principles of natural justice, because in that event the court would not ignore the legislative mandate, the requirement of giving reasonable opportunity of being heard .....

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ule of universal application.'' 15. In a case on hand, the Commissioner of Customs, in exercise of power under Section 23 of the Customs Brokers Licensing Regulations, 2013, has issued a total prohibition order prohibiting M/s Daniel & Samuel Logistics Pvt Ltd., from working in any section of the Customs Commissionerate and Customs station under the jurisdiction of Chennai Customs Zone, with immediate effect. He has no power to prohibit a Customs Broker from working in a section or a .....

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ourts, have decided and for that matter, the decisions of the other High Courts, may have a persuasive value and they do not a binding precedent. It is true that there must be certain degree of certainty in the law, to be interpreted and applied to all the persons, to which, the Constitution of India, extends, but that principle, does not mean that a High Court is bound by the decision of another High Court, whether it is of the same strength or of a higher composition. 195. No doubt, Judicial P .....

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