2018 (8) TMI 48 - HC - Customs

Suspension of CHA License - Jurisdiction to order suspension - power of Commissioner to order suspension of a licence - power was exercised only after the receipt of the offence report dated 27.02.2018and there was no immediate action - Regulation 19(1) of the CBLR - Held that - When a licence is suspended under Regulation 19(1) of the CBLR the Principal Commissioner or Commissioner of Customs shall within fifteen days from the date of suspension give an opportunity of hearing to the Customs Broker whose licence is suspended and may pass an order either revoking the order of suspension or continuing it as the case may be - The proviso states that in case the Principal Commissioner or Commissioner continues the suspension the further procedure thereafter shall be as provided under Regulation 20 of the CBLR. The investigation which has proceeded since March 2017 appears to have opened a can of worms . The consignment which was in transit handled by the petitioner was brought back. On examining of the cargo CLRI certified that it does not confirm to the prescribed standard. On further investigation it appears that several such similar consignments handled by the petitioner have come under scrutiny. The Department conducted search operations in the premises of the petitioner after obtaining warrant documents have been recovered statements have been recorded from several persons including the officers of the petitioner and the writ petitioner themselves would admit that for several months statements have been recorded from various persons - the auction initiated by the respondent in invoking such Regulation 19(1) of the CBLR by passing an order on 14.03.2018 on receipt of the offence report on 27.02.2018 cannot be stated to be barred by limitation or an exercise which is uncalled for. Thus the petitioner has to necessarily fail on this issue. The impugned order of suspension passed under Regulation 19(2) of the Regulations cannot be held to be invalid merely because the power was exercised only after the receipt of the offence report dated 27.02.2018 and the Court is convinced that the exercise of power cannot be faulted as not being the one where immediate exercise was done - petition dismissed - decided against petitioner.

Issues Involved:
1. Jurisdiction for invoking power under Regulation 19(1) of the Customs Brokers Licensing Regulations, 2013 (CBLR).
2. Validity of the suspension order under Regulation 19(2) of the CBLR.
3. Delay in initiating action and its impact on the necessity of immediate suspension.
4. Relevance of Board Circular No. 9/2010-Cus.
5. Examination of the decision-making process and potential arbitrary exercise of power.

Issue-Wise Detailed Analysis:

1. Jurisdiction for invoking power under Regulation 19(1) of the CBLR:
The petitioner challenged the jurisdiction of the respondent to invoke Regulation 19(1) of the CBLR, arguing that the power to suspend a license should be exercised only in cases where immediate action is necessary and an enquiry is pending or contemplated. The petitioner contended that the alleged misdeclaration was detected on 01.03.2017, but the suspension order was issued on 14.03.2018, indicating no immediate necessity. The court examined Regulation 19(1) and concluded that the Commissioner must form an opinion that immediate action is necessary and an enquiry is pending or contemplated. The court found that the respondent's action was justified as the offence report was received on 27.02.2018, and the suspension order followed promptly on 14.03.2018.

2. Validity of the suspension order under Regulation 19(2) of the CBLR:
The petitioner argued that the suspension order under Regulation 19(2) was a verbatim reproduction of the initial suspension order under Regulation 19(1) and did not consider the detailed submissions made during the personal hearing. The court noted that the petitioner had the opportunity to present their case during the personal hearing on 27.03.2018, and the order was issued on 06.04.2018. However, the court held that examining the factual accuracy of the order's content was beyond the scope of the writ petition and should be addressed by the Tribunal.

3. Delay in initiating action and its impact on the necessity of immediate suspension:
The petitioner contended that the delay of one year between the detection of the alleged misdeclaration and the suspension order indicated that immediate suspension was not warranted. The court reviewed the timeline of events, noting that the investigation involved multiple consignments and extensive scrutiny. The court concluded that given the complexity of the investigation, the delay was not unreasonable and did not invalidate the necessity for immediate suspension. The court emphasized that there is no fixed formula for determining the timeliness of such actions.

4. Relevance of Board Circular No. 9/2010-Cus:
The petitioner referred to Board Circular No. 9/2010-Cus, arguing that the timelines prescribed therein were violated. The court clarified that circulars are internal guidelines for the Department and cannot override statutory regulations. The court held that the circular's timelines were not applicable to the case at hand, as the CBLR's provisions governed the suspension process.

5. Examination of the decision-making process and potential arbitrary exercise of power:
The court examined whether the decision-making process was arbitrary or if the petitioner had a reasonable opportunity to present their case. The court found no error in the decision-making process, as the petitioner was granted a personal hearing and had submitted written objections. The court concluded that the respondent's exercise of power was not arbitrary, and the suspension order was justified based on the facts and circumstances of the case.

Conclusion:
The court dismissed the writ petition, upholding the suspension order under Regulation 19(2) of the CBLR. The court held that the invocation of power under Regulation 19(1) was appropriate and not barred by limitation. The petitioner was granted liberty to file an appeal before the CESTAT, with the period from 13.04.2018 to the receipt of the certified copy of the order excluded from the limitation period. No costs were awarded, and the connected miscellaneous petition was closed.

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