2019 (5) TMI 487 - AT - Customs

Forfeiture of security deposit - ban on operation as authorized courier - HELD THAT - The Regulations are not framed under any special authority or law but is a procedure notified under the general powers vested in section 157 of Customs Act, 1962; the opportunity for representing to the Chief Commissioner of Customs against any penalty does not foreclose recourse to the appellate jurisdiction in section 129 of Customs Act, 1962. The respondent has invoked the power to suspend under regulation 14 of the Courier Imports and Exports (Clearance) Regulations, 1992. Implicit in this invoking is the lack of prima facie justification for establishing one of the grounds that could lead to revocation of registration, and/or forfeiture of security, as enumerated in the said Regulation. A lack at the stage of suspension cannot be filled at the stage of notice without the inquiry mandated in the power to suspend. It can only be deduced that the notice, as well as the detriments, have been proceeded with despite this lack. Consequently, the de-registration and forfeiture lack the authority of law. Eternity is accepted only in matters of faith. No statute can, or should, arrogate such and we do not find such in the Courier Imports and Exports (Clearance) Regulations, 1998. Yet the respondent has taken it upon himself to resort to banning operation for all time to come which is not a jurisdiction that is permissible to be invoked under Regulations. It is tantamount to interference with exercise of regulation 10 of Courier Imports and Exports (Clearance) Regulation, 1988 which is not within the scope of notice issued to the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Forfeiture of security deposit and penalty imposed under section 158 of Customs Act, 1962.
2. Authority of the Tribunal to entertain the appeal.
3. Procedural requirements under regulation 14 of the Courier Imports and Exports (Clearance) Regulations, 1998.
4. Validity of suspension of authorization and subsequent actions.
5. Jurisdiction of the Tribunal in relation to Customs Act, 1962 and Regulations.

Analysis:
1. The appellant contested the forfeiture of a security deposit of ?10,00,000 and the penalty imposed under section 158 of the Customs Act, 1962, due to the discovery of gold in consignments handled by them. The appellant argued that the Tribunal had the authority to hear the appeal, citing a previous decision of the Bombay High Court. The appellant also raised concerns regarding the lack of inquiry preceding the de-registration process and the prohibition on operating as an 'authorized courier,' which they deemed beyond the scope of the show cause notice.

2. The Tribunal thoroughly examined the procedural requirements under regulation 14 of the Courier Imports and Exports (Clearance) Regulations, 1998. It was noted that revocation of registration and forfeiture of security must follow due process, including providing the courier with notice and an opportunity to defend themselves. The regulation also allows for representation to the Chief Commissioner and contemplates suspension when an inquiry is necessary. The Tribunal emphasized the importance of following these procedures before imposing detriments.

3. Regarding the suspension of authorization and subsequent actions, the Tribunal clarified that the Commissioner has the power to revoke authorization after issuing notice and allowing the courier to defend themselves. The suspension should only occur when there are grounds that require further investigation through an inquiry. Failure to conduct the mandated inquiry renders any subsequent actions invalid, as the preliminary steps are not observed as required.

4. The Tribunal affirmed its jurisdiction to entertain the appeal, emphasizing that the Regulations are established under the general powers vested in section 157 of the Customs Act, 1962. The opportunity to represent to the Chief Commissioner against penalties does not preclude recourse to the appellate jurisdiction provided by the Customs Act. The Tribunal highlighted the necessity of following proper legal procedures and respecting the rights of the parties involved.

5. Ultimately, the Tribunal found that the actions taken by the respondent lacked legal authority. The suspension of authorization lacked prima facie justification, and subsequent detriments proceeded without the necessary inquiry. The respondent's decision to ban the operation indefinitely was deemed beyond the permissible jurisdiction under the Regulations. Consequently, the impugned order was set aside, and the appeal was allowed, emphasizing the importance of upholding legal procedures and ensuring fair treatment of parties involved.