2018 (9) TMI 45 - AT - Customs

Revocation of registration of appellant as a Courier Agency - Forfeiture of Security deposit - imports alleged to contain concealed contraband in the form of gold - Smuggling in Gold - misusing of authorization for clearing consignments - competence of the Commissioner to suspend the licence - Regulation 14 of Courier Imports and Exports (Clearance) Regulations 1998 (as amended) - Initiation of revocation proceedings without any inquiry. Held that - Regulation 14 empowers the competent authority to direct forfeiture of security deposit for failure to comply with the conditions of registration under Regulations or of the Act. The first step to revocation is the placing of authorized courier on notice of the grounds on which such eventuality is proposed and to be given an opportunity of making a representation in writing and a further opportunity of being heard in their defence. In the present case, instead of a mere order of suspension, it was with the stated purpose of conducting an inquiry before taking up the process of revocation of registration. In view of the expressed intention to conduct an enquiry for which powers conferred under regulation 14 was invoked and, in the circumstances where the grounds against the authorized courier are not established prima facie, it is obvious that enquiry that was to be conducted was not brought to its logical conclusion as mandated in the proviso, i.e. to proceeding with the revocation or restoration of the licence. There is no record of the outcome of the enquiry either in the order of deregistration or in the show cause notice proposing deregistration Thus, the proceedings had commenced with show cause notice without reference to the grounds contemplated by the Principal Commissioner for suspension - The revocation proceedings were initiated for the very same incident upon which no inquiry has been conducted. Without such inquiry, the initiation of proceedings is itself in jeopardy. For these reasons, the revocation is set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Revocation of registration under Courier Imports and Exports Regulations, 1998.
2. Allegations of misutilization of authorization and smuggling of contraband.
3. Lack of proper enquiry before revocation.
4. Compliance with procedures under Regulation 14 for revocation.
5. Legality of suspension and revocation process.
6. Finality of proceedings pending before the Tribunal.

Analysis:
1. The appellant, M/s Poonam Courier Pvt Ltd, appealed against the revocation of their registration under Courier Imports and Exports Regulations, 1998, along with the forfeiture of security deposit and imposition of a penalty. The revocation was based on the discovery of concealed contraband in imports filed by the appellant, leading to a show cause notice under the Customs Act, 1962. The appellant contended that the revocation lacked proper enquiry and that one incident was still under appeal before the Tribunal.

2. The show cause notice accused the appellant of allowing another entity to misuse their authorization for clearing consignments and aiding in contraband smuggling. The appellant argued that they had only outsourced the "last mile delivery" to the other entity and had sought permission for the same, which was not responded to. They also cited a previous Tribunal decision to support their position that post-clearance activities fall outside the scope of the Regulations.

3. The authorized representative highlighted the relationship between the appellant and the other entity, emphasizing the smuggling of contraband in consignments. The necessity of an enquiry was stressed, drawing from a High Court decision, to ensure due process was followed before revocation.

4. The Tribunal noted that the charges were related to instances of smuggling but did not directly implicate the appellant. As the proceedings were still pending before the Tribunal, the focus was on adherence to the procedures outlined in the Regulation rather than determining guilt.

5. The Regulations mandate a specific process for revocation, including notice, representation, and enquiry before taking such action. The Tribunal found that the suspension and subsequent revocation did not follow this prescribed process, especially regarding the lack of a conclusive enquiry before deregistration. The decision also clarified the distinction between suspension and revocation, emphasizing the need for due process.

6. Ultimately, the Tribunal ruled in favor of the appellant, setting aside the revocation and deregistration due to non-compliance with the procedural requirements under Regulation 14. The decision underscored the importance of following legal procedures and conducting proper enquiries before taking punitive actions.