2015 (11) TMI 199 - HC - Customs

Suspension of CHA License - Appointment of enquiry officer - Appellant contends that without even issuing show cause notice, within the period of limitation, an enquiry officer had, straightway, been appointed - Held that - The objection of the order of suspension is completely different from the object of issuance of the show cause notice. The Regulations in this regard are very clear. Under the sub-regulation (2) of Regulation 20, a time limit of 15 days is fixed for suspending the licence from the date of receipt of a report. Under sub-regulation (3), an opportunity of hearing should be granted to the licensee within 15 days from the date of suspension. This opportunity is only in respect of suspension. The Regulation 20 also deals only with suspension. - Department appears to have taken advantage of the expressions suspension appearing under Regulation 20 as well as Regulation 22. The power to order suspension under Regulation 20 is in cases where further proceedings are sought to be initiated. The suspension contemplated under Regulation 22 is by way of penalty after the enquiry. The distinction between two Regulations is that one is a suspension pending enquiry and the other is a suspension by way of penalty. - Decided against Revenue.

Summary

Issues:
Validity of the order of suspension challenged on grounds of non-compliance with show cause notice issuance within the prescribed period and appointment of enquiry officer beyond the limitation period.

Analysis:
The case involved an appeal by the Revenue under Section 130 of the Customs Act, 1962, against the setting aside of the suspension of a Customs House Agent (CHA) Licence by the CESTAT. The respondent operated under a CHA licence issued as per the Customs House Agents Licence Regulations 2004. The Commissioner of Customs suspended the licence on receiving an offence report, leading to subsequent legal proceedings. The respondent challenged the appointment of an enquiry officer without prior show cause notice issuance, which was upheld by a learned Judge. The Revenue appealed this decision, and a Division Bench granted a stay. Meanwhile, the CESTAT allowed the respondent's appeal against the suspension order, citing irregularities in the appointment of the enquiry officer. The Revenue's appeal against the CESTAT's decision focused on the validity of the suspension order, particularly the lack of show cause notice within the prescribed time frame and the appointment of the enquiry officer beyond the limitation period.

The Division Bench clarified the distinction between Regulations 20 and 22 of the CHALR, 2004, regarding suspension and revocation procedures. Regulation 20 deals with suspension pending enquiry, requiring a show cause notice within 15 days of suspension, while Regulation 22 outlines the process for revoking the licence, mandating a notice within 90 days of receiving an offence report. The Department's attempt to conflate the two regulations was deemed inappropriate, as each serves a distinct purpose: one for temporary suspension pending enquiry and the other for suspension as a penalty post-enquiry. The Tribunal's decision to uphold the respondent's appeal based on this legal interpretation was deemed correct. The Court rejected the Revenue's argument that the show cause notice was implied in the suspension order, emphasizing the clear procedural requirements outlined in the regulations.

In conclusion, the Court dismissed the civil miscellaneous appeal by the Revenue, affirming the CESTAT's decision to set aside the suspension order. The judgment highlighted the importance of procedural compliance in matters of licence suspension and emphasized the distinct procedures outlined in the relevant regulations. The case serves as a precedent for interpreting and applying the CHALR, 2004, in matters concerning CHA licence suspension and revocation.