2022 (6) TMI 1377 - HC - Customs

Suspension of licence of petitioner - failure to carry out due diligence and follow KYC norms in respect of a export for which the petitioner had filed documents - in a consignment of oil tanks in respect of which the documents were filed, 2150 Kgs. of red sanders which, is prohibited for export, was found by the Directorate of Revenue Intelligence. HELD THAT - Taking note of the fact that Ext.P4 does not show any reason compelling the authority to take immediate action, it is opined that Ext.P4 can be set aside directing the respondent to reconsider the matter after affording further opportunity of hearing to the petitioner. Accordingly, Ext.P4 order is set aside. Considering the urgency expressed by the petitioner, the respondent shall pass fresh orders within a period of ten days from the date of receipt of a certified copy of this judgment. Though Ext.P4 order has been set aside, it is made clear that the suspension imposed by Ext.P4 will continue to operate till a fresh decision is taken by the respondent. Petition disposed off.

Summary

Issues:
Challenge to suspension of license under Custom House Agents Regulations due to alleged failure to carry out due diligence and follow KYC norms in an export consignment containing prohibited goods.

Analysis:
The petitioner challenged the suspension of its license under Custom House Agents Regulations due to an allegation of not following due diligence and KYC norms in an export consignment that included prohibited goods. The petitioner argued that it had complied with all requirements of the regulations and that the suspension lacked urgency. The petitioner contended that the license could only be suspended in cases of grave urgency, citing relevant case law. The respondent, on the other hand, opposed relief for the petitioner, highlighting past instances of non-compliance by the petitioner and previous legal proceedings. The respondent argued that the petitioner's approach to the court in the past had been unsuccessful. The petitioner emphasized that the suspension lacked a clear reason and urgency, citing case law to support the argument that suspension should only occur in cases of grave urgency.

The court, upon considering the arguments from both sides and noting the absence of compelling reasons for immediate action in the suspension order, set aside the order. The court directed the respondent to reconsider the matter after giving the petitioner a further opportunity to be heard. The court instructed the respondent to issue fresh orders within ten days from the date of receiving a certified copy of the judgment. Despite setting aside the original order, the court clarified that the suspension imposed by the order would remain in effect until a new decision was made by the respondent. The court also directed the respondent to consider the judgment and relevant legal principles mentioned during the reconsideration of the matter.