2014 (9) TMI 379 - HC - Customs

Suspension of CHA licence - order has been passed in the absence of any action which is immediately necessary, as provided in sub-regulation (2) of Regulation 20 - no further action was taken under Regulation 22 of the Regulations - Held that - unfortunately, though the impugned order was passed on 16.03.2010, the Commissioner of Customs, has not passed final order under Regulation 22 for the past four years. Absolutely, no reason has been offered by way of explanation for this inaction on the part of the Commissioner in the counter. Though the counter was filed on 22.11.2010, no reason has been stated even during the course of argument by the learned counsel for the respondent as to why no order has been made under Regulation 22, so far. The conduct of the Commissioner of Customs in this matter, though the allegations against the petitioner appear to be serious, cannot be appreciated. The learned counsel for the petitioner would submit that the suspension of licence may be revoked and the Commissioner may be directed to hold an enquiry and pass appropriate orders under Regulation 22 of the Regulations. In my considered opinion, that course is not possible and the only course which could be adopted is to issue a direction to the Commissioner to hold appropriate enquiry and pass a final order under sub-regulation (7) of Regulation 22 within a period of six weeks from the date of receipt of a copy of this order. The writ petition is dismissed as not maintainable, however, with a liberty to the petitioner to file appeal before the Tribunal, if so advised - Decided against the CHA.

Issues:
1. Suspension of Customs House Licence to a partnership firm for alleged involvement in concealing Ketamine Hydrochloride in iodized salt shipment.
2. Challenge to the suspension order on grounds of lack of immediate action, violation of natural justice, and maintainability of writ petition without appeal to Tribunal.
3. Interpretation of Customs House Agents Licensing Regulations, 2004, regarding suspension and appeal procedures.
4. Failure of Commissioner of Customs to pass a final order under Regulation 22 after the suspension of the licence.
5. Direction to the Commissioner to conduct an inquiry and pass a final order within a specified timeframe.

Issue 1: Suspension of Customs House Licence
The petitioner, a partnership firm, had its Customs House Licence suspended by the Commissioner of Customs following the interception of Ketamine Hydrochloride concealed in iodized salt shipments filed by the petitioner. The value of the seized Ketamine Hydrochloride was significant at Rs. 1,50,00,000. The suspension was based on allegations of violation, leading to the petitioner challenging the order through a writ petition.

Issue 2: Challenge to Suspension Order
The petitioner contested the suspension order on the grounds that immediate action was not taken as required by Regulation 20(2), and the order was passed arbitrarily without following principles of natural justice. The respondent argued that the petitioner should have appealed to the Tribunal under Regulation 28(8) instead of filing a writ petition directly. The court found the writ petition not maintainable due to the absence of a Tribunal appeal and the lack of violation of natural justice.

Issue 3: Interpretation of Regulations
The court analyzed the amendments to the Regulations, particularly the insertion of sub-regulation (3) to Regulation 20, post the suspension order date. It clarified that the original Regulations did not mandate immediate hearings post-suspension, and the petitioner's failure to appeal to the Tribunal under Regulation 22(8) was noted. The court emphasized the importance of following the amended Regulations for appeal procedures.

Issue 4: Failure to Pass Final Order
Despite the suspension order being issued in 2010, the Commissioner of Customs did not pass a final order under Regulation 22 for four years. The court criticized this inaction and directed the Commissioner to conduct an inquiry, afford the petitioner an opportunity, and pass a final order within six weeks from the court's order receipt.

Issue 5: Direction for Inquiry and Final Order
The court dismissed the writ petition but granted the petitioner liberty to file an appeal before the Tribunal. It directed the Commissioner to conduct an inquiry, ensure due process, and issue a final order within six weeks, excluding the time spent on the writ petition from the limitation period for any appeal. No costs were awarded, and connected miscellaneous petitions were also dismissed.

This detailed analysis of the judgment covers the suspension of the Customs House Licence, challenges to the suspension order, interpretation of Regulations, failure to pass a final order, and the court's direction for an inquiry and final order issuance.

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