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2013 (11) TMI 1045 - AT - CustomsSuspension of the Customs House Licence under Regulation 20(3) of the CHALR, 2004 - Non compliance of procedure of Regulation 22(2) - Held that - CHAs handling UB Bills of different passengers through Chennai Aircargo Complex. It has been alleged that there are some falsifications in the documents produced by the CHA for baggage clearance during the period June to October 2009. The statements were recorded only in October 2011. After receipt of the offence report, the Commissioner immediately issued suspension order under Regulation 20(2) of the CHALR, 2004. The Commissioner after complying with the procedure insofar as personal hearing was granted and the appellants filed representation and thereafter the impugned orders were passed directing continuation of the suspension of the CHAs under Regulation 20(3) of the CHALR, 2004. There is no dispute that Regulation 20(2) of the CHALR would apply in respect of suspension of licence of CHA in appropriate cases where immediate action is necessary and where an enquiry against such agent is pending or contemplated. Thereafter, the Commissioner of Customs, in terms of Regulation 20(3) after hearing the CHA may pass such order either revoking the suspension or continuing it. In the present cases, by the impugned orders all dated 23.5.2012 issued under Regulation 20(3), the Commissioner of Customs directed continuation of suspension. Commissioner of Customs upon receipt of the reply to notice issued under sub-Regulation (1) of Regulation 22, would direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire The learned Advocate rightly submitted that sub-Regulation (2) of Regulation 22 is linked with sub-Regulation (1) of Regulation 22 - investigation to unearth evidence required to issue SCN and inquiry as envisaged in Regulation 22(1) are two distinct processes. Investigation is to be done by Revenue using its powers to unearth documents and to record statements which process apparently has been done in this case substantially even before the suspension order was passed and investigating authority had given report and on that basis suspension order was passed. Now, the next stage is the enquiry as envisaged in Regulation 22 (1). This can commence only after issue of a Show Cause Notice, as envisaged in Regulation 22(1), which has not been done in this case so far. Where the immediate suspension has been ordered under the provisions Regulation 20(2) and thereafter the procedure would follow procedure for enquiry under Regulation 22(1), which starts from the issue of notice, has to be followed - Procedure of Regulation 22(2) was not followed insofar as no notice was issued till date as stated above and therefore continuation of suspension orders by the impugned orders dated 23.5.2012 under Regulation 20(3) of the CHALR, 2004 are not justified and the impugned orders are set aside - Decided in favour of appellant.
Issues Involved:
1. Mis-declaration of baggage by Customs House Agents (CHAs). 2. Continuation of suspension of Customs House Licence under Regulation 20(3) of CHALR, 2004. 3. Compliance with procedural requirements under Regulation 22 of CHALR, 2004. Detailed Analysis: Mis-declaration of Baggage: The appellants, who are Customs House Agents (CHAs), were alleged to have mis-declared the baggage of different passengers during the period from June to October 2009. Statements from the appellants were recorded in October 2011, and suspension orders were issued on 25.4.2012 under Regulation 20(2) of CHALR, 2004. These suspensions were confirmed by orders dated 23.5.2012 under Regulation 20(3) of CHALR, 2004. Continuation of Suspension: The Commissioner of Customs (Seaport-Import), Chennai, ordered the continuation of the suspension of the Customs House Licence under Regulation 20(3) of CHALR, 2004. The appellants challenged these suspension orders, arguing that the allegations pertained to events that occurred between June and October 2009, and the suspension was only issued in April 2012, indicating no immediate necessity for such action. The Tribunal noted that Regulation 20(2) applies to cases requiring immediate action, but in this instance, the delay undermined the justification for invoking this regulation. Compliance with Procedural Requirements: The appellants contended that despite the Hon'ble Single Judge of the Madras High Court's order dated 2.7.2012 directing the authorities to follow the procedures under Regulation 22(2) of CHALR, 2004, no notice was issued to them. Regulation 22(1) requires the Commissioner to issue a notice within ninety days from the receipt of the offence report, which was not done in this case. The Tribunal emphasized that Regulation 22(2) is linked with Regulation 22(1), and the lack of a notice violated procedural requirements. Tribunal's Findings: 1. Regulation 20(2) and 20(3): The Tribunal found that the suspension orders under Regulation 20(2) and 20(3) were issued in the context of an enquiry pending or contemplated against the CHAs. However, the procedural requirements under Regulation 22 were not followed, as no notice was issued despite the High Court's directive. 2. Case Law References: The Tribunal referenced the case of Manjunatha Shipping Services Ltd., where it was held that a show-cause notice is necessary for the enquiry under Regulation 22. The Tribunal also noted the decision in Falcon Air Cargo, which highlighted the impact of suspension on the right to carry on trade or profession under Article 19(1)(g) of the Constitution. 3. Delay in Issuing Notice: The Tribunal observed that despite the High Court's order, no notice was issued to the appellants, which was a significant procedural lapse. The Tribunal set aside the suspension orders due to this non-compliance. 4. Enquiry Proceedings: The Tribunal clarified that its order would not affect any ongoing enquiry proceedings, which could continue as provided under the law. Conclusion: The Tribunal allowed the appeals filed by the appellants, setting aside the suspension orders dated 23.5.2012 under Regulation 20(3) of CHALR, 2004, due to the failure to follow the procedural requirements under Regulation 22. The Tribunal emphasized the necessity of issuing a show-cause notice as part of the enquiry process and acknowledged the appellants' right to carry on their profession without undue suspension.
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