2018 (3) TMI 1559 - HC - Customs

Suspension of CHA License - time limitation of proceedings - Regulation 19 of Regulations, 2013 - Held that - by virtue of the non-obstante clause contained under Regulation 19, the proceedings under Regulations 18 and 19 will have to be treated separately and distinctly. However, the proviso to Regulation 19(2) makes it clear that, whenever the Commissioner of Customs passes an order for continuing the suspension, the further procedure thereafter shall be as provided in Regulation 20. The proceedings initiated and completed by respondent under Regulation 19 cannot be said to be bad or illegal. The allegation with respect to limitation to proceed under Regulation 20 is premature at this stage of the proceedings. Petition dismissed - decided against petitioner.

Summary

Issues:
Challenge to suspension of Customs Broker license under Customs Brokers Licensing Regulations, 2013.

Analysis:
The petitioner, a Customs Broker, sought to quash orders suspending and affirming the suspension of their license due to alleged non-compliance with "Know Your Client" norms. The petitioner extended their activities to multiple locations with due permission. The suspension was based on allegations of lapses in verifying client credentials and authorization, leading to misuse by exporters. The petitioner argued innocence and lack of immediate action necessity for suspension.

The respondent denied the allegations and stated the suspension was due to grave lapses by the petitioner, emphasizing the need for verification under Regulations. The respondent contended that the petitioner had an appeal remedy under Regulation 21 and challenged the jurisdiction of the court for judicial review. The respondent highlighted the necessity of verifying client credentials and the absence of limitation under Regulation 20.

The court examined Regulation 19, which allows suspension of a license where immediate action is necessary. The court noted the distinction between Regulations 18 and 19, emphasizing the separate treatment of revocation and suspension. The court found the respondent's actions under Regulation 19 to be lawful and not premature regarding the limitation under Regulation 20. The court emphasized the procedural opportunities available to the petitioner under Regulation 20 and dismissed the writ petition for lack of legal infirmities.

The court directed the respondent to expedite proceedings under Regulations and ensure participation of the petitioner within three months. The judgment upheld the suspension but emphasized the need for timely completion of further proceedings.