2017 (5) TMI 1283 - HC - Customs

Suspension of CHA licence - misdeclaration - suspension on the ground that branded glass chatons were being imported under the guise of artificial stones or imitation stones , by misdeclaring the description as also the value of the imported items - penalty u/s 112 and 114AA of the CA, 1962 - Held that - Power of suspension under Regulation 20(2) of the 2004 Regulations is to be exercised by the Commissioner of Customs within fifteen days from the date of receipt of report from the investigating authority. Power under Sub-Clause (3) of the same provision could be exercised in cases where suspension has been effected under the circumstances contemplated in Sub-Clause (2). As per Regulation 19(1) of the 2013 Regulations, however, the timeframe of 15 days has not been stipulated, within which emergency power for suspension is to be exercised. The authorities, however, shall be entitled to take a fresh decision on the question of suspension of the appellant s licence or revocation of the same upon giving opportunity to hearing to the appellant on the limitation issue raised by the appellant. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Legality of the suspension order of the appellant's Customs Broker License.
2. Applicability of the Customs House Agents Licensing Regulations, 2004 versus the Customs Brokers Licensing Regulations, 2013.
3. Jurisdictional issue concerning the timeframe for the suspension order under the applicable regulations.
4. Adequacy of the show-cause notice and its receipt by the concerned authority.
5. Availability and appropriateness of alternative statutory remedies.

Detailed Analysis:

1. Legality of the Suspension Order:
The appellant's license was suspended initially on 30th December 2016 and confirmed on 27th January 2017. The appellant challenged the suspension order, arguing it was passed beyond the permissible statutory period. The High Court found that the statutory authority did not properly address the jurisdictional issue of the suspension proceeding being time-barred, as contended by the appellant. The Court directed that the suspension order and the revocation proceedings initiated should not be given effect, and the authorities must take a fresh decision on the suspension after giving the appellant an opportunity to be heard on the limitation issue.

2. Applicability of the 2004 Regulations versus the 2013 Regulations:
The appellant's license was initially issued under the Customs House Agents Licensing Regulations, 2004, which were superseded by the Customs Brokers Licensing Regulations, 2013. The High Court noted that the learned Single Judge had proceeded based on the 2004 Regulations. However, the Customs Authorities argued that the 2013 Regulations should apply. The Court observed that the 2004 Regulations applied when the goods were imported and that the suspension order was issued under the 2004 Regulations. The Court found that the authorities had adhered to the 2004 Regulations.

3. Jurisdictional Issue Concerning the Timeframe:
The appellant argued that the suspension order could not have been passed beyond fifteen days from the date of receipt of the show-cause notice by the authority concerned. The High Court found that the statutory authority did not consider the limitation point in detail. The Court noted that the timeframe of 15 days stipulated in Regulation 20(2) of the 2004 Regulations was not adequately addressed by the authorities. The Court directed the authorities to re-examine the limitation issue and take a fresh decision on the suspension.

4. Adequacy of the Show-Cause Notice:
The appellant contended that the show-cause notice issued on 25th November 2014 should constitute the "offence report" and that the suspension order was issued much beyond the three months' timeframe stipulated in the 2013 Regulations. The High Court found that the show-cause notice was marked to the Principal Commissioner of Customs, Kolkata, but the statutory authority observed that the notice was never received. The Court held that there is a presumption that an official act would be done in due course and that the statutory authority did not properly address whether the show-cause notice was received.

5. Availability and Appropriateness of Alternative Statutory Remedies:
The learned Single Judge dismissed the appellant's writ petition on the grounds that an efficacious alternative remedy was available. The High Court noted that the limitation question is a jurisdictional issue and well within the power of the Writ Court to examine, even if an alternative remedy is available. The Court found that the learned Single Judge had not addressed the limitation issue in detail and that the statutory authority had not properly considered the jurisdictional issue of the suspension proceeding being time-barred.

Conclusion:
The High Court set aside the judgment of the learned Single Judge and the orders of suspension, subject to the authorities re-examining the limitation issue and giving the appellant an opportunity to be heard. The Court directed that the appellant be allowed to carry on its business under its subsisting license until a fresh decision is made by the concerned authority. The Court did not determine whether the order of the adjudicating authority constituted a report of an investigating body, leaving this question to be decided by the adjudicating authority. The appeal was disposed of in these terms, and no costs were awarded.