2020 (7) TMI 387 - AT - Customs

Principles of Natural Justice - Suspension and denial of renewal of CHA licence - no opportunity was given to the appellant of being heard - allegation against the appellant is that they have contravened the Regulations 10(d), 10(n) and 13(7) of CBLR 2018 - HELD THAT - The order dt. 21/04/2020 whereby the renewal of Customs Broker licence has been denied by the Commissioner was passed without following the principles of natural justice and without affording an opportunity of hearing to the appellant which is clear violation of principles of natural justice especially when his application for renewal of licence is already pending. Further, it is found that once the Customs Broker licence of the appellant has already expired on 13/04/2020, there was no need to pass an order of suspension because after 13/04/2020, the Bills of Entry filed by the appellant were not processed by the Customs. Therefore, the suspension order dt. 21/04/2020 is premature. Further, while passing the impugned order, the Commissioner has not considered the various judgments relied upon by the appellant wherein the High Court as well as the Tribunal from time to time has held that the Customs Broker is not supposed to physically visit the premises of the importer/exporter and if he verifies the documents on the basis of the official records, then he cannot be alleged to have violated the regulations of CBLR. Further, it is found that after the impugned order dt. 19/05/2020 was passed upholding the denial of renewal as well as suspension of licence, an inquiry was ordered by the Commissioner, under Regulation 17 of CBLR 2018, which is still pending and has not been completed. Since the enquiry is pending, the finding of the Commissioner in the impugned order that the appellant has violated Regulations 10(d), 10(n) and 13(7) of CBLR 2018 is without any basis because the appellant has submitted that he has not violated the regulations on the basis of the decisions rendered by the Tribunal and the High Court. The show-cause notice issued to the appellant by Trichy Commissionerate is pending before the High Court of Madras (Madurai Bench). In view of the above, during the pendency of the enquiry ordered by the Commissioner of Customs, the Commissioner should not have denied the renewal, more so, when there are extra ordinary circumstances prevailing in the country on account of spread of pandemic Covid19 during which the appellant is supposed to pay the wages to its employees as per the instruction issued by the Government of India. Keeping in view the livelihood of the appellant and the fact that enquiry is still pending regarding the violation of regulations against the appellant, the impugned order is not sustainable in law and therefore we set aside the same and direct the Commissioner of Customs to allow the appellant to carry on his business of CHA during the pendency of enquiry except at Trichy Commissionerate where the alleged violation took place. Appeal disposed off.

Summary

Issues Involved:
1. Suspension and denial of renewal of Customs Broker Licence.
2. Compliance with principles of natural justice.
3. Alleged violations of CBLR 2018 regulations.
4. Impact of pending inquiry and show-cause notice.
5. Consideration of precedents and legal standards.

Detailed Analysis:

1. Suspension and Denial of Renewal of Customs Broker Licence:
The appellant, a customs broker, held a valid Customs Broker Licence until 13/04/2020. However, the Commissioner of Customs denied the renewal of the licence and suspended it based on an Order-in-Original dated 16/03/2020 from the Commissioner of Customs (Preventive), Trichy, citing violations of Regulations 10(d), 10(n), and 13(7) of CBLR 2018. The appellant argued that the suspension and denial were premature and illegal, especially since the licence had already expired.

2. Compliance with Principles of Natural Justice:
The appellant contended that the denial of renewal and suspension were issued without affording an opportunity of personal hearing, violating the principles of natural justice. The Tribunal agreed, noting that the Commissioner of Customs passed the order without following due process, particularly since the renewal application was pending.

3. Alleged Violations of CBLR 2018 Regulations:
The Commissioner alleged that the appellant contravened Regulations 10(d), 10(n), and 13(7) of CBLR 2018 by filing shipping bills for M/s. Swiss Global without proper verification. The appellant countered that all necessary documents were verified according to official records and relied on judicial precedents stating that a customs broker is not required to physically verify the premises of the importer/exporter.

4. Impact of Pending Inquiry and Show-Cause Notice:
An inquiry under Regulation 17 of CBLR 2018 was ordered and is still pending. The Tribunal found that the Commissioner's findings of violations were premature as the inquiry had not concluded. Furthermore, a show-cause notice issued by the Trichy Commissionerate is pending before the High Court of Madras (Madurai Bench).

5. Consideration of Precedents and Legal Standards:
The Tribunal noted that the Commissioner did not consider relevant judicial decisions which clarify that a customs broker is not liable for misdeclaration by the exporter if due diligence based on documents is conducted. The Tribunal cited several cases, including Kunal Travels (Cargo) Vs. CC and KVS Cargo Vs. CC(General), which support the appellant's stance.

Conclusion:
The Tribunal concluded that the denial of renewal and suspension of the appellant's licence were not sustainable in law. It emphasized the need for adherence to principles of natural justice and due process. The Tribunal set aside the impugned order and directed the Commissioner of Customs to allow the appellant to continue business operations, except in the Trichy Commissionerate, during the pendency of the inquiry. The Tribunal also urged the Inquiry Officer to expedite the inquiry and consider relevant judicial precedents.

(Order pronounced in Open Court on 14/07/2020)