2014 (11) TMI 992 - HC - Customs

Suspension of license - Customs Brokers Licensing Regulation, 2013 - Export of prohibited items - allegation that that Red Sanders, which is a prohibited goods was attempted to be exported to United Arab Emirates in the guise of High Alumina Refractories Fire Bricks - Held that - The present regulation that is Customs Brokers Licensing Regulation, 2013, makes a difference between revocation and suspension as both the eventualities are jotted down in different and separate regulations. Regulation 18 relates to the revocation of licence and procedure has been provided in Regulation 20. Regulation 19 is an independent provision containing the eventuality of suspension of licence and therefore, is not regulated and/or controlled by Regulation 20 thereof. Furthermore, proviso is inserted to sub-regulation (2) of Regulation 19 which was absent in the repealed regulation providing a further action to be taken in the event the Commission of Customs allowed the order of suspension to continue. Therefore, it cannot be said that the order of suspension passed by the Commissioner of Customs is permanent in nature. - No interim order.

Summary

Issues:
Challenge to suspension of licence under Regulation 19 and vires of sub-regulation (2) as unconstitutional.

Analysis:
1. The petitioner challenges the suspension of the licence under sub-regulation (1) of Regulation 19 as well as the constitutionality of sub-regulation (2) of the same regulation. The suspension order was based on an attempt to export prohibited goods to the United Arab Emirates disguised as a different product. The authority found violations of Customs Brokers Licensing Regulation, 2013, leading to the suspension of the petitioner's licence.

2. The petitioner argues that the suspension order lacks a recording of reasonable satisfaction as required by sub-regulation (1) of Regulation 19. They contend that since the enquiry has concluded, the suspension should not continue indefinitely. Reference is made to a previous case to support the argument that immediate suspension without a hearing is against natural justice principles.

3. Citing another judgment, the petitioner emphasizes that the circumstances necessitating immediate suspension must be recorded to justify such action. Without proper documentation of the reasons for immediate suspension, the order may not be sustained.

4. Regulation 19 empowers the Commissioner of Customs to suspend a Customs Broker's licence where immediate action is deemed necessary due to a pending or contemplated enquiry. Sub-regulation (2) requires a hearing for the Customs Broker before deciding to revoke or continue the suspension, with provisions for further action under Regulation 20.

5. The distinction between suspension and revocation is highlighted, with specific procedures outlined for each in the regulations. The Commissioner's power to suspend is contingent on immediate action being necessary and an ongoing or anticipated enquiry. The order of suspension in question is criticized for non-compliance with statutory obligations and procedural deficiencies.

6. The judgment clarifies that the purpose of immediate suspension is to address urgent situations, not as a punitive measure. The lack of recording immediate action satisfaction in the suspension order is noted, emphasizing the need for proper justification in such cases.

7. Previous case law is examined to understand the context of immediate suspension orders. It is emphasized that immediate suspension should address exigent circumstances, and the absence of recorded satisfaction for immediate action may render the order invalid.

8. The court finds that the circumstances in the present case necessitated immediate action due to statutory non-compliance and the need to prevent further misuse of the Customs Broker licence. The petitioner's reliance on previous judgments is deemed unhelpful in this specific case.

9. A comparison is drawn with a previous case involving Customs House Agent Licence Regulations to illustrate the procedural requirements for suspension and revocation. The regulations under consideration distinguish between suspension and revocation, each with its own set of rules and procedures.

10. The differences between revocation and suspension under the Customs Brokers Licensing Regulation, 2013, are highlighted, emphasizing separate regulations governing each scenario. The presence of a proviso in sub-regulation (2) of Regulation 19 indicates further action in case of continued suspension, dispelling the notion of permanent suspension.

11. The court directs the respondent to file an affidavit-in-opposition within a specified timeframe, indicating that no interim order is granted at this stage. The matter is scheduled for a hearing after the submission of responses by the parties involved.

12. The court clarifies that the findings regarding the interim order are tentative and limited to the current petition's scope.

13. Instructions are given to serve the writ petition on the Director General of India promptly to adhere to the affidavit filing timelines.

14. The pendency of the writ petition does not hinder post-decisional hearings, and authorities are expected to conclude the process within a specified timeframe from the date of the court's order.