2014 (12) TMI 987 - HC - Customs

Validity of Regulation 13(h) of the Courier Regulations 1998 - Requirement of qualified employees - Under Regulation 13(h), Authorized Couriers are required to file declarations for clearance of imported or export goods through a person who has passed the examination referred to in Regulation 8/19 of the CHALR, 2004 (now corresponding to Regulation 6/17 respectively of the CBLR, 2013) and who are duly authorized under section 146 of the Customs Act, 1962 - Held that - rationale behind the requirement under the Courier Regulations, 1998, as amended, of making/filing declarations by a person who has qualified the examination referred to under Regulations 8/19 of CHALR, 2004 (corresponding to Regulation 6/17 of CBLR, 2013) is that the said persons have adequate knowledge of overall customs clearance process. The syllabus of the examination comprises of a set of subjects required for adequacy of knowledge of Customs clearance process. The clearance through the Courier mode is part of overall clearance process and the provisions of Customs Act, 1962 are applicable in similar manner as is applicable for clearance from other modes. The object underlying the requirement of passing the examination under Regulations 8/19 of CHALR, 2004 (now Regulation 6/17 of CBLR, 2013) is to ensure that such person has the basic level of competency and knowledge. Hence, when the Courier Regulations, 1998 as amended, stipulates that such persons filing declarations for clearance of imported and export goods under the Courier mode must have qualified at the examination as mandated under Regulation 8/19 of CHALR 2004 (now Regulation 6/17 of CBLR 2013), there is nothing arbitrary in imposing such a requirement. The requirement has a reasonable nexus with the object which is sought to be achieved viz. to ensure that the Authorized Couriers/ employees fulfill the requirement of competency, knowledge and skills. Even otherwise, the requirement under the amended Courier Regulations, 1998, that the Authorized Courier shall file declarations for clearance of imported or export goods through a person who has passed the said examination and who is duly authorized under section 146 of the Customs Act, is entirely a matter of policy and it would be impermissible for this Court in the exercise of its limited jurisdiction under Article 226 in interfering with such policy matters. It is required to be noted that the Petitioner has not challenged the amendment to the Courier Regulations, 1998 as being ultra-vires the Customs Act, 1962 or Article 14 and 19(1)(g) of the Constitution of India. Authorized Courier may utilize services of a person who has qualified the examination under Regulations 8/19 of the CHALR, 2004, in case he or his employee has not qualified the examination for filing declarations under the Courier Regulations, 1998. In the Reply, it has been also averred that there are about 52 Authorized Couriers companies at Courier Terminal Sahar, Mumbai and almost all of the above have hired the services of persons who have passed the examination referred to in Regulation 6/17 of the CBLR, 2013 (erstwhile Regulation 8/19 of the CHALR, 2004) and clearance of courier consignments is being handled smoothly and expeditiously by Courier companies in compliance with the Regulations. This position has not been disputed by the Petitioner in their Affidavit-in-Rejoinder, except to contend that that has been done under duress and under threat of stoppage of work. Thus, the right of the Authorized Courier companies to carry on business has not been abrogated in any manner. - Decided against Petitioner.

Summary

Issues Involved:
1. Validity of the Office Note dated 28.07.2014 issued by Commissioner of Customs.
2. Adequacy and fairness of the Courier Regulations, 1998 as amended in 2010.
3. Competence and knowledge of courier company employees regarding customs clearance.
4. Dependency of Courier Regulations on CHALR 2004 and CBLR 2013.
5. Arbitrary imposition of requirements on courier companies operating at Mumbai Airport.

Detailed Analysis:

1. Validity of the Office Note dated 28.07.2014:
The Petitioner challenged the Office Note dated 28.07.2014, which required courier companies to engage employees with "F" or "G" cards issued under CHALR 2004, failing which no clearance would be permitted after 15 August 2014. The Court noted that the requirement for employees to pass the examination under CHALR 2004 (now CBLR 2013) is to ensure adequate knowledge of customs clearance processes. The Court found nothing arbitrary in this requirement, as it has a reasonable nexus with ensuring competency and knowledge for customs clearance.

2. Adequacy and fairness of the Courier Regulations, 1998 as amended in 2010:
The Petitioner argued that the amended Courier Regulations 1998 are deficient because they do not provide multiple opportunities for courier company employees to pass the required examination, unlike CHA employees who are granted four attempts. The Court observed that the transition period was extended multiple times to facilitate compliance. The Court held that the requirement for passing the examination is a matter of policy and does not warrant interference under Article 226.

3. Competence and knowledge of courier company employees regarding customs clearance:
The Petitioner contended that their employees have adequate knowledge of customs rules but have not passed the examination meant for CHA employees. The Court highlighted that the examination ensures a basic level of competency and knowledge necessary for customs clearance. The Court found the requirement for passing the examination reasonable and not arbitrary.

4. Dependency of Courier Regulations on CHALR 2004 and CBLR 2013:
The Petitioner sought amendments to make the Courier Regulations self-contained and free from CHALR 2004 or CBLR 2013 provisions. The Court noted that the Courier Regulations, 1998, framed under Section 157 of the Customs Act 1962, apply to low-value consignments and are designed to ensure competency in customs clearance. The Court held that the requirement for passing the examination under CHALR 2004 (now CBLR 2013) is reasonable and within policy discretion.

5. Arbitrary imposition of requirements on courier companies operating at Mumbai Airport:
The Petitioner claimed that the Office Note dated 28.07.2014 arbitrarily subjected courier companies to new requirements. The Court found that the regulations aim to ensure that declarations for customs clearance are made by qualified individuals. The Court noted that the Petitioner did not challenge the amendment as ultra vires the Customs Act or the Constitution. The Court also observed that the petitioner's apprehensions about loss of business and livelihood were allayed by the Respondents' affidavit, which stated that courier companies could hire qualified persons or use CHA services for compliance.

Conclusion:
The Court dismissed the petition, holding that the requirement for courier company employees to pass the examination under CHALR 2004 (now CBLR 2013) is reasonable and aimed at ensuring competency in customs clearance. The Court found no basis for interference under Article 226 and dismissed the petition with no order as to costs.