2018 (12) TMI 1047 - HC - Customs

Suspension of empanelment as an approved RFID E-Seal vendor - case of petitioner is that the suspension howsoever temporary has brought about devastation of its commercial reputation besides resulting in a virtual blacklisting - RFID E-Seals were directed to be fixed on self-stuffed containers by exporters - Held that - This Court is of the considered view that the action taken by the respondent is rather precipitate. What ought to have been done was that to supply whatever adverse material the respondent had considered, which led them to issue the impugned letters, including technical specifications which the petitioner was alleged to have violated, to it (the petitioner) - the most appropriate course would be to direct the respondents to furnish the relevant materials including test report and the other standards/technical specification, which required that the e-seal ought not to be readable in the unlocked position - petition disposed off.

Summary

Issues:
1. Suspension of empanelment as an approved RFID E-Seal vendor by Customs Authority.

Analysis:
The petitioner's grievance in this case is against the directions issued by the Customs Authority suspending their empanelment as an approved RFID E-Seal vendor. The petitioner was directed to cease supplying the seals to exporters and recall seals already supplied/sold, which they argue has damaged their commercial reputation and effectively blacklisted them. The Customs Authority's action was based on consultations and joint inspections which revealed that the seal could be read in its disengaged position, contrary to the intended use. However, the petitioner argued that the technical specifications provided did not prohibit the reading of the seal in the unlocked position by an electronic key device.

The Court found that the Customs Authority's actions were hasty and should have provided the petitioner with the relevant adverse material and technical specifications they allegedly violated before taking such drastic steps. The Court directed the Customs Authority to furnish the petitioner with the necessary materials, including test reports and other standards/technical specifications that required the e-seal not to be readable in the unlocked position. The Customs Authority was given a deadline of 5 days to provide this information to the petitioner, who would then have the opportunity to submit a proper representation. Once the representation is received, the Customs Authority was instructed to pass a suitable order within a week thereafter.

In conclusion, the writ petition was disposed of with the above directions, emphasizing the importance of providing relevant materials to the affected party before taking punitive actions. Both parties were to receive a copy of the order promptly for their records.