2001 (9) TMI 680 - AT - Customs

Summary

Issues:
- Suspension of CHA Licence under Regulation 21(2) of CHALR 1984 without a show cause notice or enquiry
- Violation of principles of natural justice
- Interpretation of Regulation 21(2) of Custom House Agents Licencing Regulation 1984

Issue 1: Suspension of CHA Licence without Due Process
The appellant, a Custom House Agent, challenged the suspension of CHA Licence No. R-609/CHA by the Commissioner of Customs, Chennai, without being provided a show cause notice or an enquiry. The appellant contended that this suspension violated the principles of natural justice. The appellant's counsel cited precedents, including judgments in the cases of Freightwings & Travels Ltd. v. CC, Mumbai and Varun Forwarders v. CC, Mumbai, to argue that immediate suspension of a licence should only occur in cases of serious misconduct, and a personal hearing should be granted before such action. The Tribunal agreed with the appellant, emphasizing that a post-decisional hearing is essential for fairness in quasi-judicial proceedings. The Tribunal highlighted that the Commissioner should have granted a personal hearing before passing the suspension order under Regulation 21(2) of the CHALR 1984.

Issue 2: Violation of Principles of Natural Justice
The Tribunal analyzed the findings of the impugned order, which revealed that M/s. Trinity Forwarders (Madras) had allegedly misused their CHA licence and failed to comply with obligations set out in the CHALR 1984. The Tribunal noted serious misconduct on the part of M/s. Trinity Forwarders, leading to the suspension of their CHA licence under Regulation 21(2) pending investigation. However, the appellant's counsel successfully argued that the suspension lacked a basis as no show cause notice had been issued, and no enquiry had been conducted before the suspension. Citing previous judgments, the Tribunal held that the suspension order was premature and lacked sufficient material to support immediate action under Regulation 21(2). Consequently, the Tribunal set aside the suspension order, emphasizing the importance of following due process and principles of natural justice in such matters.

Issue 3: Interpretation of Regulation 21(2) of CHALR 1984
The Tribunal examined the interpretation of Regulation 21(2) of the Custom House Agents Licencing Regulation 1984 in light of the appellant's challenge to the suspension of their CHA licence. Relying on legal precedents and the requirement for a post-decisional hearing, the Tribunal concluded that the immediate suspension of a licence should only occur in cases of serious misconduct and after granting a reasonable opportunity of hearing. The Tribunal emphasized that the exercise of powers under Regulation 21(2) must be based on sufficient material and compliance with the principles of natural justice. By following the decisions of Larger Bench and co-ordinate benches, the Tribunal held that the suspension order in this case lacked a proper basis and material, leading to its setting aside and allowing the appeal.