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The Commissioner of Customs, The Deputy Commissioner of Customs, The Commissioner of Customs, The Assistant Commissioner of Customs, The Superintendent of Customs Versus M/s. Daniel and Samuel Logistics Pvt. Ltd.

2016 (3) TMI 609 - MADRAS HIGH COURT

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 opportunity - Held that:- we are not inclined to accept the challenge made to .....

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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 Commissioner of Customs, Chennai VIII Commissionerate, Customs Broker Section, .....

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ediate 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 dated 08.04.2010. 16. This order is issued without prejudice to any oth .....

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rted 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 the correctness of the Writ Court, Mr.R.Aravindan, learned Senior Sta .....

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ted 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 learned counsel for the appellants and perused the materials available .....

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sdiction 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 justice, stating that it is without issuing a show-cause notice and holdin .....

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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 to pass fresh order in accordance with law, after giving an opportunity .....

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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 prevention of miscarriage of justice. 6. Since the order impugned is passed wi .....

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stoms 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 legal right to seek for a show-cause notice, before an adverse order is pa .....

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en 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; postpone; defer (2) to temporarily keep a person from performing a f .....

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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 time from, a function or privilege, temporary deprivation of one s off .....

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ding 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 decision in Abid Mohd. Khan v. State of M.P. reported in AIR 1958 MP .....

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overnment, 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, it seems to me that in that judgement their Lordships did not intend .....

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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 a quasi-judicial character. The order suspending a Government servant .....

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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 grounds inter alia that as to whether, it was made in contravention of Ar .....

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val 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 Civil Service of a State is 'dismissed' or 'removed' .....

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) 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 passed, cannot be insisted upon if the same is liakely to defeat the v .....

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s 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 continue in service till the hearing is contemplated which would not be in pu .....

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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, Regulations 18 to 23 are paramateria to the earlier regulations. Accepting t .....

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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 obligations, as laid down under Regulation 11, in relation to work in that secti .....

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ioner 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 these regulations, within his jurisdiction or anywhere else; (c) committ .....

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mployee 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 under sub-regulation (1), the Commissioner of Customs shall, within fiftee .....

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ng 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 him, a written statement of defense and also to specify in the said s .....

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hich 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 the Customs Broker, for the purpose of ascertaining the correct position .....

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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, within the specified period not being less than thirty days, any represen .....

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oms 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 Act to the Customs, Central Excise and Service Tax Appellate Tribunal e .....

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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 required, the Commissioner of Customs may suspend the licence, by whi .....

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ndicates 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 be prohibited from working in one of sections of the Customs Station, w .....

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ecision, 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 of Customs Brokers Licensing Regulations, 2013. The nature and extent .....

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ly 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 rules of "natural justice" are not embodied rules. Also, th .....

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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 of the duty to be performed under a statute. What particular rule of .....

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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 by necessary implication excludes the application of principles of na .....

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s 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 before an order is made, is generally read into the provisions of a st .....

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missioner 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 all sections, as the case may be, but the question that calls up for co .....

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gh 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 Precedents, across the country should maintain uniformity, and that the .....

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