2012 (8) TMI 760 - HC - Customs

Order of suspension of the appellant s CHA license - Held that - A close reading of the provisions of Regulation 20 (2) of the Customs House Agents Licensing Regulations, 2004 ( CHALR ) disclose that the power to direct immediate action is confined to taking it within 15 days from the date of receipt of a report from the investigating authority whereas in this case the report of the investigating agency was received on 09.03.2011 concededly the Commissioner did not seek recourse to the power under Regulation 20 (2). The immediacy or urgency of the situation was allowed to lapse and eventually the Commissioner issued the suspension order on 10.10.2011. The net result is that where immediate suspension is called for, the Commissioner has to take swift action and cannot wait and if he does so suspension can be made only after the full inquiry is held as provided by Regulation 22. In this case the final report of the inquiry was made on 07.05.2012 and the appellant was issued with a show-cause notice on 05.06.2012 - the suspension order impugned in this case cannot be sustained and the authorities are, however, at liberty to proceed with the inquiry and pass any order in accordance with law - in favour of assessee by way of remand.

Summary

Issues:
1. Whether the suspension of the CHA license was contrary to the Customs House Agents Licensing Regulations, 2004.

Analysis:

Issue 1: Suspension of CHA License

The appeal challenged the suspension of the CHA license by the Commissioner of Customs, based on alleged malpractices by the appellant. The appellant argued that the suspension order violated the CHALR, specifically Regulation 20(2), as it was issued without a show-cause or hearing within the prescribed time limits. The respondent contended that since no final order had been issued, the appellant could not claim to be aggrieved. The respondent cited a previous court order to support the argument that the time limits in the regulations are not rigid. The Court noted that the suspension order was passed without prior notice or opportunity for the appellant to respond, contrary to the procedures outlined in Regulations 20, 21, and 22 of the CHALR.

Issue 2: Interpretation of Regulations

Regulation 20 empowers the Commissioner of Customs to suspend or revoke a CHA license, with Regulation 20(2) providing for emergency suspension without prior show-cause or hearing in certain cases. Regulation 22 outlines the procedure for suspension or revocation of a license, emphasizing the importance of conducting an inquiry. The Court highlighted that the power for immediate suspension under Regulation 20(2) must be exercised within 15 days of receiving a report, which was not done in this case. The Court emphasized that if immediate suspension is necessary, swift action must be taken, and a full inquiry must follow, as per Regulation 22. In this case, the suspension order was found to be contrary to the CHALR, leading to its setting aside. The authorities were directed to proceed with the inquiry following due process.

In conclusion, the Court ruled in favor of the appellant, setting aside the suspension order and directing the authorities to conduct the inquiry in accordance with the law and prescribed procedures. The judgment emphasized the importance of adhering to the regulations governing the suspension or revocation of CHA licenses to ensure procedural fairness and legal compliance.