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2016 (4) TMI 180 - MADRAS HIGH COURT

2016 (4) TMI 180 - MADRAS HIGH COURT - 2016 (336) E.L.T. 524 (Mad.) - Validity of prohibition imposed - in terms of Regulation 23 of the Customs Brokers Licensing Regulations, 2013 - Appellant cleared raw materials, which are used to manufacture drugs and pharmaceuticals without proper import licence and without clearance from the Assistant Drug Controller results in prohibiting the appellant from working in any section of Chennai Customs Commissionerate and Customs Stations under the jurisdicti .....

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ppellant before the Tribunal. So long as that order remains final, the finding that there was violation, also remains. Therefore, the appellant can seek a review of an order of prohibition only if the finding recorded by the Cochin Commissionerate that there was a violation, is ultimately set aside. - Decided against the appellant - Writ Appeal No. 13 of 2016, C. M. P. No. 832 of 2016 - Dated:- 22-2-2016 - V. Ramasubramanian And N. Kirubakaran, JJ. For the Appellant : Mr. Hari Radhakrishnan For .....

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Licensed Customs Broker bearing Licence No. 102, issued by the Cochin Customs Commissionerate in terms of Regulation 9(1) of Customs House Agents Licensing Regulations, 2004. The said licence was extended to Chennai Commissionerate under Regulation 9(2) of the Regulations. 4. In July 2013, an offence report was received, alleging that a company by name M/s. Antonie and Becouerel Organic Chemical Company had filed 33 Bills of Entry. Out of them, 3 were filed by the appellant. 5. Investigation re .....

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nder the jurisdiction of Chennai Customs Zone. 7. Therefore, the appellant came up with a writ petition in W.P.No.19670 of 2013 as against the prohibition order dated 12.7.2013. The said writ petition was disposed of on 24.9.2013, giving liberty to the appellant to submit a representation against the prohibition order. It was at that stage, a show cause notice dated 24.10.2013 was issued by the Cochin Commissionerate. 8. After considering the representation of the appellant, the Chennai Commissi .....

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2014, imposing only a penalty of ₹ 10,000/-, after holding the appellant guilty of violations. 10. In the meantime, the appellant challenged the prohibition order issued by the Commissionerate of Chennai, before the Customs, Excise and Service Tax Appellate Tribunal. By the time the said appeal in Appeal No.C/ 40192/2014 came up for hearing before the CESTAT, the Cochin Commissionerate had already passed a Final Order dated 7.4.2014. Therefore, the CESTAT allowed appeal on 15.10.2014, remi .....

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fore us. 12. The main grievance of the appellant is that once the proceedings initiated by the Cochin Commissionerate had resulted only in the imposition of a penalty of ₹ 10,000/-, the order of the Chennai Commissionerate prohibiting the appellant from operating within the area of Chennai Commissionerate, cannot continue indefinitely. The Commissioner of Customs, Cochin was the Licencing Authority and once he had passed final order under Regulation 22 of the Regulations, imposing a mere p .....

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ms (G), Mumbai-I [2008 (230) E.L.T. 451] and another in ASA Enterprises v. Commissioner of Customs (General), Mumbai [2012 (286) E.L.T. 743]. 14. We have carefully considered the above submissions. 15. A careful look at the Customs Brokers Licensing Regulations, 2013 would show that no person is entitled to carry on business as a Customs Broker, relating to the entry or departure of a conveyance or the import or export of goods at any Customs Station, unless such person holds a licence granted u .....

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of the Customs Station where he intends to transact business. 16. Regulation 18 deals with the power of the Commissioner to revoke the licence or to impose penalty. Regulation 19 speaks about suspension of licence. The procedure for revoking licence or for imposing penalty is stipulated in Regulation 20. 17. Interestingly, Regulation 22 also makes a Customs Broker liable to penalty upto ₹ 50,000/-, in case he contravenes any provisions of the Regulations or fails to comply with any provis .....

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ed that any interpretation to be given to Regulation 22, should be in tune with the object sought to be achieved by having a separate provision under Regulation 18. Likewise, interpretation to be given to Regulation 23, should also be in tune with the interpretation to be given to Regulation 19. An interpretation that will eclipse Regulation 22 by telescoping the same into Regulation 18 cannot be accepted. 20. It will be useful to read at this stage Regulations 19 and 23 together: Regulation 23 .....

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nce is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs Broker: Prohibition - Notwithstanding anything contained in these regulations, 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 regulatio .....

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ny of the rights conferred upon him in the licence, once an order of suspension is passed under Regulation 19. 22. In contrast, what is sought to be prohibited under Regulation 23, is only limited in nature. An order passed under Regulation 23 will prohibit a Customs Broker only from working in one or more sections of the Customs Station. This is why Regulation 23 does not speak either about the licence or about the pendency or contemplation of an inquiry. To put it differently, the contemplatio .....

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bligations, as statutorily imposed upon a Customs Broker. Whenever there is a violation of any of these obligations, it is open to the Commissioner of Customs to invoke the power under Regulation 23, irrespective of whether an inquiry is contemplated or pending and irrespective of what happens to the licence under Regulation 20. 24. Keeping the statutory scheme in mind, if we look at the decision of the Kerala High Court, it can be seen that the learned Judge of the Kerala High Court, with great .....

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