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2018 (4) TMI 685

e Statutes provide for an effective and alternative remedy, more so, in revenue matters - where hierarchy of appeals is provided by the Statute, the party must exhaust the statutory remedies before resorting to writ jurisdiction. - Suspension of CHA License - penalty - Regulation 20 of the Customs Brokers Licensing Regulations, 2013 - non-adherence of the mandatory time limit prescribed in Regulation 19(2) of the CBLR - classification of imported goods - the appellant had wrongly classified the goods in question despite the existence of order-in-appeal No.1323 of 2014, dated 30.07.2014, passed against the importer M/s.BenQ India Pvt. Ltd, by the Commissioner of Customs (Appeals), Chennai. - Held that: - Writ Court, while dismissing the writ petition, directed the appellant herein, to submit their reply, to the show cause notice, dated 03.11.2017, within a period of 30 days, from the date of receipt of a copy of the order impugned herein and upon compliance of the directions contained in paragraph 15, of the show cause notice, the respondent shall adjudicate the show cause notice and pass final orders as expeditiously as possible, preferably within a period of two months fro .....

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directly connecting to and designed for use with an automatic data processing machine (computer). The appellant, adopted the said classification on the instructions of the importer. According to the appellant, for the same importer, the appellant has filed several bills of entry for import of various goods including computer monitors for the past six years and several crores of rupees have been paid as customs duty during such period. (iv) According to the appellant, the officers of Special Investigation and Intelligence Branch (SIIB), seized the imported goods, vide three mahazars dated 30.06.2017, on the belief that the goods are not designed for use with an automatic data processing machine and that the importer had wrongly availed the benefit of Sl.No.17 of Notification No.24/2005-Cus, dated 01.03.2005. (v) Subsequently, the appellant approached this Court by way of a writ petition for provisional release of the goods and the goods were released pursuant to the directions issued in the said writ petition. (vi) Subsequently, the respondent exercising his power conferred under Regulation 19(1) of the Customs Brokers Licensing Regulations, 2013, suspended Customs Broker Licence No .....

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he 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 grounds mentioned in clauses (a) to (f) being made out. (iii) In as much as the appellant did not advice their client to comply with the provisions of the Act and failed to exercise due diligence, to ascertain the correctness of the information and even assuming, ultimately, an order has been passed, it can at best be visited with levy of penalty of not exceeding Rupees fifty thousand and it is definitely not a case, where suspension of licence is required to be made pending proceedings under Regulation 20 of Customs Brokers Licensing Regulations. (iv) It is further submitted that classification of the goods was done based upon the materials, which were given by the client and there is no bar for claiming different classification, as each bill of entry is an independent transaction. (v) That res judicata does not apply in matters pertaining to tax for different assessment years, because res judicata applies to debar Courts from entertaining issues on the same cause of action, whereas, the cause of cause for each year is dis .....

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a in tax matters and the importer is entitled to adopt different classification for each bill of entry, it is submitted that the Court should take into consideration the facts of the case, which has been dealt with by the respondent, while continuing the order of suspension and as to how the word computer was inserted in the bill of entry, thereby, failing in their obligation contemplated under Regulation 9 of the Customs Brokers Licensing Regulations. (vii) In respect of identical product, the classification adopted by the very same importer, whose import was handled by the appellant, was not accepted and the order was confirmed by the Commissioner of Appeals, dated 30.07.2017 and in spite of having knowledge of the said order, the appellant has filed the bill of entry by adding the word 'computer' with a view to avail the unintended benefit of the notification and this has resulted in passing the order continuing the suspension. On the above submissions, the learned counsel prayed for sustaining the order continuing suspension. 6. After hearing the learned counsel for the parties, the Writ Court, vide order, dated 08.12.2017, at Paragraphs 8 to 13, held as follows: " .....

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ower under Regulation 19(1), was invoked as in the opinion of the Commissioner of Customs, it was found that it is an appropriate case, where immediate action is necessary. In terms of sub-Regulation (2) of Regulation 19, opportunity of hearing was granted to the petitioner which was availed and the Commissioner has passed the impugned order continuing the suspension and stating that proceedings will be initiated under Regulation 20. In accordance with the said observations, show cause notice dated 03.11.2017 has been issued and received by the petitioner. 9. Mr.C.Natarajan submitted that it is alleged that the petitioner has contravened Regulation 11A(d)(e). Both these alleged violations cannot visit the petitioner with the penalty of revocation of licence, which is clear from reading of regulation 18. It is submitted that the grounds mentioned in clauses (a) to (f) in Regulation 18 are the grounds for revocation of licence or imposing of penalty. It is a submission that if a Customs Broker has committed violations contemplated under clauses (c) to (f), it would undoubtedly result in an order of revocation whereas, if Customs Broker contravenes clauses (a) & (b) of Regulation .....

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r and effecting clearances through Chennai Port. One such consignment covered in bill of entry dated 21.02.2011, was subject of check with regard to the classification adopted by the petitioner, the Customs Broker of the importer. As in the instant case, the classification was done as monitors of a kind solely or principally used in automatic data processing system under 8471. This classification was not accepted by the Department and an Order-in-Original, dated 18.01.2012, was passed, rejecting the petitioner's classification and classifying the goods under 85285900. The importer filed appeal before the Commissioner of Appeals, which was dismissed by order dated 30.07.2014. This order has attained a finality, as no appeal was preferred against the order within the permitted time. It appears that subsequently, the petitioner has been handling the very same consignments and effecting clearances for the very same importer through the Mumbai Port. After lapse of about two years, the present bill of entry has been filed. The petitioner does not plead ignorance or lack of knowledge of the order-in-original, dated 18.01.2012, confirmed in order-in-appeal, dated 30.07.2014, in respect .....

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nearly three months from the date of seizure of the consignment. The term immediate occurring in Regulation 19(1) should be interpreted in the context of the CBLR and therefore, there would be no room for adopting dictionary meaning for the word immediate occurring in Regulation 19(1). The bills of entry were filed by the petitioner on 17.06.2017. The goods were seized on 30.06.2017, after which statement was recorded from the Managing Director of the petitioner on 17.07.2017, statement was recorded from the authorised representative of the importer on 18.07.2017 and the order of suspension was passed on 22.09.2017, invoking regulation 19(1). Thus, this Court finds that there is no inordinate or unexplained delay warranting the case to be taken out of the purview of a case for immediate suspension. Thus, considering the conduct of the petitioner and the facts, the first respondent has exercised his powers and found the petitioner's case to be an appropriate case for immediate suspension. After the petitioner was afforded an opportunity, he was given a hearing and the order of suspension has been directed to be continued and the reasons assigned in the impugned order are just an .....

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on as a Customs Broker. The issue involved is a dispute regarding the correct classification of the goods namely whether the goods are 'computer monitors' or 'TV monitors'. Regulation 19 specifically requires that suspension can only be justified where immediate action is necessary. The respondent failed to justify the necessity to take 'immediate action' against the appellant. The continuation of suspension has not been supported by reasons. (iii) The appellant would sustain irreparable injury if the order of suspension is to continue for the reason that if and when the appellant is absolved of all charges under Customs Brokers Licensing Regulations, the appellant, cannot be compensated for the loss sustained, by him, till such time. (iv) After suspension of licence, the respondent is bound to follow the procedure set out under Regulation 20 of Customs Brokers Licensing Regulations, 2013. The said procedure mandates issuance of a show cause notice, appointment of inquiry officer, submission of report by the inquuiry officer and final decision by Commissioner. After detailed inquiry, the licensing authority may either revoke the licence or revoke the suspens .....

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ing exemption in good faith based on importer's explanation, technical specification and exemption granted by Mumbai Customs for several imports made by various parties. In such circumstances, even if it is decided that the exemption is not to be granted, the appellant cannot to be penalized as abetter. (xi) That the allegation is the result of mis-conception on the part of the Customs as to use of LCD monitors under import. The appellant states that they are all monitors for use with ADP system. In fact, it is admitted in the show cause notice issued under the Customs Act that the monitors are capable of being connected with personal computers/laptops . (xii) That the commercial understanding is that the monitors in question are all computer monitors. It is needless to say that commercial understanding has a role in the matter of classification of goods. The Hon'ble Supreme Court's observation in the matter of classification of V.P.Latex Dunlop India Ltd 1983 (13) ELT 1566 (SC) is relevant the importer said it was 'rubber' but the Government said it was 'synthetic resin'. (xiii) That the power of suspension under Regulation 19 is an exception limited to .....

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vailable, as per the decision of the Hon'ble Apex Court in U.P.State Spinning Co. Ltd. Vs. R.S.Pandey and Another (2005) 8 SCC 264, at para No.11 are as follows: "Except for a period when Article 226 was amended by the Constitution (Forty-Second Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction or discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy. If somebody approaches the High Court without availing the alternative remedy provided, the high Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction." 11.4. In United Bank of India Vs. Satyawati Tondon and Others {(2010) 8 SCC 110} .....

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4 Supreme Court Cases 337}, the Hon'ble Apex Court held that, An alternative remedy is not a bar to the entertaining of writ petition filed for the enforcement of any of the fundamental rights or where there has been a violation of the principles of natural justice or where the order under challenge is wholly without jurisdiction or the vires of the statute are under challenge. The Court has recognised some exceptions to the rule of alternative remedy. However, the high Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal or grievance still holds the field. 11.6. The Hon'ble Apex Court, after considering a catena of cases, in Shauntlabai Derkar and Another Vs. Maroti Dewaji Wadaskar {(2014) 1 Supreme Court Cases 602}, at para Nos.15 to 18, held as follows:- "15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e, where the statutory authority has not acted in accordance with the provisions of the enactment in q .....

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ices issued thereon. 18. In view of the above, we allow this appeal and set aside the judgment and order passed by the High Court in Chhabil Dass Agarwal Vs. Union of India {W.P.(c) No.44 of 2009, decided on 5/10/2010}. We grant liberty to the respondent, if he so desires, to file an appropriate petition/appeal against the orders of reassessment passed under Section 148 of the Act within four weeks' time from today. If the petition is filed before the appellate authority within the time granted by this Court, the appellate authority within the time granted by this Court, the appellate authority shall consider the petition only on merits without any reference to the period of limitation. However, it is clarified that the appellate authority shall not be influenced by any observation made by the High Court while disposing of Writ Petition (Civil) No.44 of 2009, in its judgment and order dated 5/10/2010." 11.7. After considering a plethora of judgments, in Union of India and Others Vs.Major General Shri Kant Sharma and Another {(2015) 6 SCC 773}, at para 36, the Hon'ble Apex Court held as follows:- "The aforesaid decisions rendered by this Court can be summarised as .....

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ce under Regulation 20 of the Customs Brokers Licensing Regulations, 2013, dated 03.11.2017, has been issued and the appellant on receipt of the notice, is in the process of submitting their reply, to the proceedings under Regulation 20, which itself fortifies the views of the Writ Court, that matter requires adjudication by the appropriate authority. 13. As regards the contention of the learned counsel for the appellant with regard to non-adherence of the mandatory provisions prescribed under the Customs Brokers Licensing Regulations, 2013, we deem it fit to have a cursory look of the said Regulations: 11. Obligations of Customs Broker.- A Customs Broker shall - (a) ..... (b) ..... (c) ..... (d) advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage; ........ xxx 18. Revocation of licence or imposition of penalty.- The Commissioner of Customs may, .....

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inated 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 said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner 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 the Customs Broker, for the purpose of ascertaining the correct position. (4) The Customs Broker shall be entitled to cross-examine the persons examined in support of the grounds forming the ba .....

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idering the rival submissions, Writ Court, while dismissing the writ petition, directed the appellant herein, to submit their reply, to the show cause notice, dated 03.11.2017, within a period of 30 days, from the date of receipt of a copy of the order impugned herein and upon compliance of the directions contained in paragraph 15, of the show cause notice, the respondent shall adjudicate the show cause notice and pass final orders as expeditiously as possible, preferably within a period of two months from the date on which, the case is ready for adjudication. Writ Court has also made it clear that show cause notice issued under Regulation 20, shall be adjudicated by the respondent without being in any manner influenced by the observations made in the order of the Writ Court. 15. We do not find any infirmity or illegality, in the impugned order, passed by the Writ Court, as Courts have time and again, held that where hierarchy of appeals, is provided by the Statute, the party must exhaust the statutory remedies, before resorting to writ jurisdiction. Therefore, we are in agreement, with the decision of the Writ Court, in directing the appellant herein, to work out their remedy as c .....

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