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2016 (4) TMI 922 - CALCUTTA HIGH COURT

2016 (4) TMI 922 - CALCUTTA HIGH COURT - 2016 (337) E.L.T. 54 (Cal.) - Suspension of CHA licence - Passed within a short time of the licensing authority being made aware of the order of February 26, 2016 - Nothing contrary demonstrated by the petitioner - Held that:- if the licence had been suspended or revocation proceedings had been initiated prior to the order of February 26, 2016 (in the event the licensing authority was aware of such proceedings), there may have been some basis to the petit .....

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opportunity to explain his perceived misconduct, the invocation of this extraordinary jurisdiction cannot be seen to be on the ground of the breach of the principles of natural justice. Further, since the order impugned is founded on the basis of a previous order holding the petitioner guilty of abetting his client in an illegal import transaction, the order of suspension cannot be seen to be completely without basis that would shock the conscience of the court. - Alternate remedy of appeal .....

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n any degree of conclusivity before a subsequent order is passed after the post-decisional hearing. - The present essay of the petitioner is misconceived and ill advised. In any event, the petitioner ought to have participated at the post-decisional hearing since no order was passed on this petition preventing the petitioner from so doing or keeping the post-decisional hearing in abeyance. If the petitioner has participated in the post-decisional hearing, the concerned Principal Commissioner .....

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For the Respondents: Mr S. B. Saraf, Adv., Mr K. K. Maity, Adv JUDGMENT Sanjib Banerjee, J. : - The petitioner is a Customs broker. Customs brokers were previously known as Customs House Agents and such brokers are governed by the Customs Brokers Licensing Regulations, 2013 issued by the Central Board of Excise and Customs under Section 146(2) of the Customs Act, 1962. The matter here pertains to the suspension of the petitioner s licence as a Customs broker. The petitioner alleges that the orde .....

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id Regulations of 2013. 2. The petitioner acted as the Customs broker for one Sachar International of Delhi and filed a bill of entry dated February 9, 2015 for clearance of a consignment of automotive parts imported from the United Arab Emirates under an airway bill. According to the petitioner, the goods were inspected at the airport and cleared by the Customs authorities, but they were subsequently apprehended by officers of the Customs Preventive Commissionerate and put to check at the cargo .....

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ignment. The order recorded that since the value and description of the imported goods were misdeclared and excess goods were also discovered in the consignment, such imported goods were seized under Section 110 of the said Act on February 12, 2015 on the reasonable belief that such goods were liable for confiscation under Section 111 of the Act. 4. It appears from the aforesaid order of February 26, 2016 that the importer was summoned for appearance on several occasions with appropriate documen .....

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er s assertion that he had no knowledge of the offending goods, the facts revealed otherwise. In finding the petitioner liable to penalty under Section 112 of the Act, the order recorded that both the importer and the petitioner had played active role in mis-declaration of the quantity and brand of goods imported … The order dated February 26, 2016 also observed that the petitioner had failed to discharge their obligation in a fair and disinterested manner by not applying due diligence to .....

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e to the tune of ₹ 18,17,588/-. A penalty of ₹ 2 lakh was imposed on the petitioner for the petitioner s act of abetment. 5. On or about April 6, 2016 the petitioner received the impugned order of suspension dated April 5, 2016. Such order of suspension claimed that the order-in-original dated February 26, 2016 was forwarded to the licensing authority under cover of a letter dated March 17, 2016. The impugned order set out the facts pertaining to the import consignment of February, 2 .....

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the directions contained therein are set out: 13. Therefore, in view of the foregoing reasons, an enquiry is contemplated against the Customs Broker M/s Ranabir Enterprise under Regulation 20 of Customs Broker Licensing Regulation 2013. Pending completion of such enquiry, it appears that the continuation of business transaction by the Customs Broker, would be prejudicial to the interest of Revenue and immediate action under Regulation 19(1) of CBLR 2013 is warranted to prevent further misuse of .....

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ril 5, 2016 afforded the petitioner a postdecisional hearing on April 22, 2016, the petitioner evinced an intention to disregard the same upon instituting the present proceedings on April 12, 2016. 7. The petitioner insinuates that the licensing authority has merely paraphrased the salient parts of the order-in-original and has passed a perfunctory order of suspension without any application of mind. The petitioner asserts that the tenor of the impugned order of suspension betrays the premeditat .....

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Commissioner or 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 Principal Commissioner or Commissioner of Customs shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose licence is suspended and may pass such order as he deems fit .....

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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 statement whether the Customs Broker desires to be heard in person by the sai .....

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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. (4) The Customs Broker shall be entitled to cross-examine the persons exam .....

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hereon submit the report within a period of ninety days from the date of issue of a notice under sub-regulation (1). (6) The Principal Commissioner or 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 re .....

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oner 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 Principal Commissioner of Customs or Commissioner of Customs, as the case may be. 8. The petitioner contends that the licence of a Customs broker may be suspended only if immediate action is necessary and where an inquiry against such broker is pending or an inquiry is contemplated. According to the petitioner .....

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. The petitioner claims that since no inquiry against the petitioner was pending as on the date of the order of suspension and no notice has been issued to the petitioner for revocation of his licence under Regulation 20(1) of the said Regulations, no inquiry could be said to be in immediate contemplation. The petitioner says that since an order of suspension permits a post-decisional hearing and it is possible at such post-decisional hearing that the broker may allay the misgivings of the licen .....

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nce and such time-limit is within thirty days of the detection of an offence . The petitioner also relies on the last limb of paragraph 7.2 of the circular: 7.2. … The Licensing authority shall take necessary immediate suspension action within fifteen days of the receipt of the report of the investigating authority. A post-decisional hearing shall be granted to the party within fifteen days from the date of his suspension. The Commissioner of Customs concerned shall issue an Adjudication .....

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edy is demonstrably inefficacious; or the action challenged is palpably without jurisdiction or it is utterly baseless or in absolute breach of the principles of natural justice. When an alternative remedy is available and this extraordinary jurisdiction is invoked on the ground of lack of authority of the administrative functionary who has taken the impugned action, the quality of the challenge must be evident from the face of the action impugned. Disputed questions as to the compliance with co .....

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at present at the Customs, Central Excise and Service Tax Appellate Tribunal in the city. The petitioner seeks almost to disregard the post-decisional hearing afforded by the order impugned to be an alternative remedy as the petitioner perceives the relevant Principal Commissioner of Customs to have a closed mind and the order impugned to be without jurisdiction since the post-decisional hearing is scheduled beyond the 15-day period envisaged by Regulation 19(2) of the said Regulations. 12. Tho .....

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vision Bench judgment of this court reported at 1998 (104) ELT 11 (N. C. Singha v. Union of India). The judgment was rendered in an appeal arising out of the refusal by a single bench to pass an interim order in a petition challenging the suspension of a licence under the Customs House Agents Licensing Regulations, 1984. Regulation 21 (2) of the Regulations of 1984 appears to have been in pari materia with Regulation 19(1) of the Regulations of 2013 relevant for the present purpose. At paragraph .....

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of suspension not to indicate any reasons why it was immediately necessary to suspend the licence. In the present case, the impugned of order of suspension of April 5, 2016 refers to the order of punishment dated February 26, 2016 passed against the petitioner and the forwarding thereof under cover of a letter dated March 17, 2016 to the petitioner s licensing authority. The immediate need for suspending the petitioner s licence is evident from the order impugned: that by a reasoned order the pe .....

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ant in the context of the order of suspension impugned herein. 16. It is equally fallacious to suggest that if the post-decisional hearing is scheduled on a day or two after the 15-day period provided therefor under Regulation 19(2) of the said Regulations, the order of suspension can be seen to be non est only on such ground. There is no conclusive evidence produced by the petitioner that the impugned order was received by the petitioner on April 6, 2016, though there is an averment to such eff .....

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adhered to, or the order of suspension would dissolve thereupon. A delay of a day or two in either case may not be fatal to the order of suspension. 17. The petitioner makes much of the two limbs of the expression 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 appearing in Regulation 19(1) of the said Regulations. The petitioner suggests that there is no mandate to perceive the .....

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e under Regulation 20(2) of the said Regulations. 18. However, there is no merit in the petitioner s assertion that since the relevant Principal Commissioner contemplated that he may direct an inquiry under Regulation 20(2) of the said Regulations, the post-decisional hearing on the order of suspension under Regulation 19(2) of the said Regulations was to be an idle formality. Any authority intending to take any penal action against a perceived delinquent must believe that if the allegations, in .....

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y nature is temporary though it may be a step in the direction of revocation of the licence. 19. Every order of suspension passed under Regulation 19 of the said Regulations must be intended to lead to a possible revocation, subject to the explanation that may be furnished by the suspended broker at the post-decisional hearing qua the order of suspension. The suspension of a licence under the said Regulations is not a punishment by itself but it may be used as a first step for ultimately revokin .....

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officer entitled to exercise such authority. An order of suspension cannot be challenged in this extraordinary jurisdiction as being without jurisdiction by calling upon the court to take a different view on the ground of necessity. If the prescribed authority perceives the suspension to be necessary, it has to be accepted at face value and, though the same can be questioned in the post-decisional hearing, it cannot be subjected to a judicial review unless it is palpably absurd. 21. As to the im .....

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ve been some basis to the petitioner asserting that the licensing authority was attempting to prejudge an issue pending consideration before an appropriate authority. In this case, the order of suspension has been passed within a short time of licensing authority being made aware of the proven misconduct on the part of the petitioner as established by the order of February 26, 2016. 22. Since an order of suspension of a Customs broker licence may be passed under the said Regulations without affo .....

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