2016 (4) TMI 925 - AT - Customs

Validity of Prohibition order - Import of various high value cars - Stoppage of the business operations of the applicant - Appellant prohibited from working as Customs Broker at New Delhi Customs stations - Held that - no evidence has come on record that the appellant authorized Mr. G S Prince expressly or impliedly. We note that the impugned order also held the appellant responsible for the acts of Mr. G S Prince, G card holder at New Delhi office. As already recorded, no investigation was made or statement recorded from the Directors / partners of the appellant to bring out their role or the connection with the importer who were found to have violated the provisions of Customs Act. It is also noted that CHA license is issued at Nagpur. There is nothing on record to inform whether any action has been initiated till date against the appellant by the original licensing authority at Nagpur customs. The impugned order is passed without following the principle of natural justice and without due process of inquiry. The order was issued after almost 7 years of purported misdemeanor. Thus the prohibition order fails due to lack of due process, inordinate delay and on prima facie merit. Therefore, order of prohibition is not legally sustainable and accordingly set aside. - Decided in favour of appellant

Summary

Issues:
Challenge to order prohibiting applicant from working as Customs Broker at Delhi Customs Stations under Regulation 23 of Customs Broker Licensing Regulation 2013 without notice or hearing, justification for drastic action, liability for acts of employee, lack of opportunity to explain, legality of prohibition order based on recommendation, violation of principle of natural justice, inordinate delay in issuing order.

Analysis:

1. Prohibition Order Challenge: The judgment deals with the challenge against an order prohibiting the applicant from working as a Customs Broker at Delhi Customs Stations under Regulation 23 of the Customs Broker Licensing Regulation 2013. The order was issued without prior notice or hearing, raising concerns about the lack of due process and violation of the principles of natural justice.

2. Justification for Drastic Action: The grounds for challenging the prohibition order included the lack of justification for such drastic action regarding an import incident from 2008, especially when no penalties were imposed on the appellant under the Customs Act. The issue of whether the acts or omissions of an employee can lead to adverse actions against the applicant without direct involvement was also raised.

3. Liability for Acts of Employee: The judgment discusses the argument regarding the liability of the appellant for the actions of their employee, emphasizing the need for tangible evidence to attribute knowledge of illegal acts to the appellant. The lack of investigation or statements from the directors/partners of the appellant to establish their connection with the importer in violation of customs provisions was highlighted.

4. Violation of Principle of Natural Justice: The Tribunal found that the impugned order was passed without following the principle of natural justice and due process of inquiry. The delay of almost 7 years in issuing the prohibition order, lack of opportunity for the appellant to explain their position, and the absence of a proper inquiry were key factors leading to the decision to set aside the prohibition order.

5. Legal Sustainability of Prohibition Order: The judgment concludes that the prohibition order was not legally sustainable due to the lack of due process, inordinate delay, and prima facie merit. As a result, the appeal was allowed, and the stay petition was disposed of, indicating a clear rejection of the prohibition order based on the recommendation without proper inquiry or opportunity for the appellant to present their case.

By thoroughly analyzing the issues raised in the judgment, it is evident that the decision was based on upholding the principles of natural justice, ensuring due process, and addressing concerns regarding liability for the acts of employees without proper evidence or opportunity for explanation.