2011 (12) TMI 18 - HC - Customs

Whether candidate upon passing the examination held under the 1984 Regulations, had a vested right to obtain a licence under Custom House Clearing Agent(CHAS) even though as a matter of fact no licence was issued or granted until the new regulations came into force in 2004 - Held That - In view of C.V. Karunakaran v. Chairman, Central Board of Excise and Customs (2009 -TMI - 76163 - HIGH COURT OF MADRAS) held that an applicant who had passed the examination held under the regulations of 1984 had no vested right to obtain a licence. Such an applicant had at best an opportunity to apply for licences which could not be treated as a vested right.Upon the enforcement of the regulations of 2004 every applicant for the grant of a new licence must comply with the regulations which were made in the exercise of the statutory power conferred by Section 146(2). The requirement of passing an examination in additional subjects is based on an intelligible consideration which is to upgrade the skills and competencies of persons who seek to apply for a licence as CHAS. A person who seeks a licence after the enforcement of the Regulation of 2004 must therefore comply with the requirements of the new regulations.Decided against assessee.

Issues Involved:
1. Constitutional validity of Regulations 8 and 15 of the Customs House Agents Licensing Regulations 2004.
2. Validity of the notification dated 8 April 2010 issued by the First Respondent.
3. Validity of the public notice issued on 15 June 2011 by the Commissioner of Customs.
4. Requirement for candidates who passed the examination under Regulation 9 of the 1984 Regulations to appear for additional subjects under the 2004 Regulations.

Detailed Analysis:

1. Constitutional Validity of Regulations 8 and 15 of the Customs House Agents Licensing Regulations 2004:
The Petitioners challenged the constitutional validity of Regulations 8 and 15 of the Customs House Agents Licensing Regulations 2004, arguing that candidates who passed the examination under the 1984 Regulations had a vested right to obtain a license without needing to pass additional subjects under the new regulations. The court held that the mere passing of an examination under the 1984 regulations did not confer a vested right to obtain a license. The new regulations, framed following the recommendations of the Kelkar Committee, aimed to upgrade the skills and competencies of Customs House Agents (CHAs). The requirement to pass additional subjects under the 2004 Regulations was deemed reasonable and not arbitrary, as it ensured that CHAs possessed the necessary competence and knowledge.

2. Validity of the Notification Dated 8 April 2010:
The notification dated 8 April 2010 amended Regulation 8 to include clause (9), which required candidates who passed the examination under the 1984 Regulations but had not yet been granted a license to pass an examination in additional subjects to be deemed to have passed the examination under Regulation 8 of the 2004 Regulations. The court upheld this notification, stating that it granted a concession to those who had passed the earlier examination by only requiring them to pass additional subjects, thereby ensuring the same competence and knowledge levels among successful applicants under both sets of regulations.

3. Validity of the Public Notice Issued on 15 June 2011:
The public notice issued on 15 June 2011 by the Commissioner of Customs invited applications for new CHA licenses under the 2004 regulations, stipulating that applicants must pass the examination under Regulation 8. The court found no fault with this requirement, stating that it was consistent with the objective of ensuring that CHAs possessed the necessary competencies and knowledge.

4. Requirement for Candidates Who Passed the Examination Under Regulation 9 of the 1984 Regulations to Appear for Additional Subjects:
The Petitioners argued that candidates who passed the examination under Regulation 9 of the 1984 Regulations had a vested right to obtain a license without needing to pass additional subjects under the 2004 Regulations. The court rejected this argument, stating that passing the examination under the 1984 regulations did not confer a vested right to obtain a license. The requirement to pass additional subjects under the 2004 Regulations was deemed reasonable and necessary to ensure that CHAs possessed the required competencies and knowledge. The court noted that the new regulations were framed to upgrade the skills and competencies of CHAs, and the requirement to pass additional subjects was consistent with this objective.

Conclusion:
The court dismissed the petition, upholding the constitutional validity of Regulations 8 and 15 of the Customs House Agents Licensing Regulations 2004, the notification dated 8 April 2010, and the public notice issued on 15 June 2011. The court found that the requirement for candidates who passed the examination under Regulation 9 of the 1984 Regulations to pass additional subjects under the 2004 Regulations was reasonable and necessary to ensure that CHAs possessed the required competencies and knowledge.

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