2011 (4) TMI 525 - HC - Customs

Customs House Agent licence - Suspension - Provisions of Regulations 13 & 20(a)(b) & (c) of the Customs House Agent Regulations, 2004 - The Commissioner while issuing the order must disclose at least the material on the date or dates on which there has been a breach based on which it has arrived at satisfaction - Apart from general observation, find that no material has been disclosed based upon which the power under Regulation 20 has been invoked - In the absence of such disclosure, the petitioner has been deprived of the opportunity of show cause or reply to that effect - Thus, the impugned order is illegal, therefore, it is quashed and set aside.

Summary

Issues:
Violation of Customs House Agent Regulations, 2004 - Prohibition of customs-related activities without proper disclosure of reasons and regulations violated - Legality of the order dated 7-12-2010 - Compliance with Regulation 21 - Power of Commissioner of Customs to prohibit a Customs House Agent - Disclosure of material for satisfaction - Opportunity of show cause.

Detailed Analysis:

1. The petitioner challenged an order dated 7-12-2010, where the respondent prohibited the petitioner from performing customs-related activities at a specific location, invoking Regulations 13, 20(a)(b) & (c) of the Customs House Agent Regulations, 2004. The petitioner contended that before such prohibition, they must be informed of the reasons and the violated regulations. The communication did not specify the regulations breached, only alleging attempted fraud and evasion of customs duty by the petitioner.

2. The Revenue argued that once the petitioner was informed of the alleged breach of Regulation 13, the petitioner could only show cause and not challenge the order in court. The High Court noted that Regulation 21 empowers the Commissioner of Customs to prohibit a Customs House Agent from working in specific sections if obligations under Regulation 13 are not fulfilled. The Court emphasized that the Commissioner must disclose the material on breached dates to justify the prohibition.

3. The Court observed that the order lacked specific disclosure of the material leading to the invocation of power under Regulation 20, depriving the petitioner of the opportunity to respond. Additionally, the order mentioned suspension without actually suspending the petitioner, indicating a lack of proper application of mind by the Commissioner. Consequently, the Court found the order illegal and quashed it, allowing the respondents to issue a fresh order after complying with Regulation 21 requirements.

4. In conclusion, the High Court disposed of the petition, emphasizing the necessity for proper disclosure of material and compliance with regulatory provisions when prohibiting a Customs House Agent from performing activities. The judgment underscored the importance of providing the affected party with an opportunity to respond and ensuring the lawful exercise of powers by the Commissioner of Customs in such instances.