2018 (2) TMI 1621 - HC - Customs

Customs Broker - Prohibition imposed on petitioner M/s. Cargomar from operating within the jurisdiction of Bangalore Customs Division, with immediate effect - appeal to Appellate Tribunal - case of petitioner is that the same has been passed without giving any prior opportunity of hearing to the petitioner and it has virtually deprived the petitioner assessee of its source of livelihood by prohibiting it from operating in the jurisdiction of Respondent Commissioner of Customs, Bangalore Division - mis-declaration of goods - maintainability of petition. Held that - This Court dealing with a similar impugned order under Regulation 23 in the case of M/s. Capricorn Logistics Pvt. Ltd. 2017 (12) TMI 1040 - KARNATAKA HIGH COURT had held that such orders under Regulation 23 of the Regulations of 2013 would be appealable before the Appellate Tribunal under Section 129-A of the Act. The contention raised by the learned counsel for the petitioner that Regulation 21 provides for an appeal to the Customs Broker only in the limited contingency of suspension and cancellation of licence and not under any other contingencies based on the reading of Section 146 (2)(g) of the Act is rather misconceived and does not deserve to be accepted. The power to frame Rules given to the Board in the various fields enumerated in Clauses (a) to (g) of sub-Section (2) of Section 146 of the Act are not restrictive in any manner, but they provide for different fields for which Regulations can provide for. Even the orders passed under Regulation 23 of Regulations of 2013 are appealable under Section 129- A of the Act read with Regulation 21 of the 2013 Regulations. Departmental Authorities including the Appellate Authorities and also the CESTAT under Section 129-A of the Act are better equipped and manned with experts in the field to measure the pros and cons of the cases arising under the Customs Act, 1962 and therefore they are better disposed of to deal with the situations arising under the said Regulations of 2013 namely prohibitions under Regulation 23, suspension of licence under Regulation 19, cancellation of licence under Regulation 18 and imposition of penalty under Regulation 20. As far as exercise of jurisdiction under Article 226 of the Constitution is concerned, it is well settled that the Rule of alternative remedy is not a Rule of bar of jurisdiction of this Court under Article 226 of the Constitution of India, but a Rule of discretion invoked by the Court in its extra-ordinary jurisdiction and this Court would be slow in invoking the extra-ordinary jurisdiction under Article 226 of the Constitution of India, if the order impugned before it have not passed through the Forums of appellate remedies provided under the relevant statutes - the present writ petition is disposed of as not maintainable with a liberty to the petitioner assessee to avail the remedy by way of an appeal under Section 129-A of the Act read with Regulation 21 before the Tribunal, if so advised in accordance with law. Petition disposed off.

Issues Involved:
1. Legality of the prohibition order under Regulation 23 without prior hearing.
2. Mis-declaration allegations and their impact on the petitioner.
3. Applicability of Section 122-A adjudication procedure.
4. Availability of alternative remedy under Section 129-A.
5. Interpretation of Regulations 18, 19, 20, 21, and 23 of the Customs Brokers Licensing Regulations, 2013.
6. Jurisdiction of the High Court under Article 226 in the presence of an alternative remedy.

Issue-Wise Detailed Analysis:

1. Legality of the Prohibition Order under Regulation 23 Without Prior Hearing:
The petitioner argued that the prohibition order under Regulation 23 of the Customs Brokers Licensing Regulations, 2013 was issued without any prior notice or opportunity of hearing, violating principles of natural justice. The petitioner claimed this deprived them of their livelihood. The court, however, noted that Regulation 23, being a non-obstante provision, allows immediate prohibition by the Commissioner of Customs if the Customs Broker fails to fulfill obligations under Regulation 11. The court emphasized the necessity of such immediate action to prevent ongoing illegal activities and did not find the absence of prior notice and hearing to be unjustified in this context.

2. Mis-declaration Allegations and Their Impact on the Petitioner:
The petitioner contended that the mis-declaration of goods was made by the importer, not by the Customs Broker, and thus no offense was committed by the petitioner to warrant prohibition under Regulation 23. The court observed that under Regulation 11(e), the Customs Broker is obligated to exercise due diligence to ascertain the correctness of any information related to the clearance of cargo. Therefore, the Customs Broker cannot completely distance themselves from the mis-declaration made by the importer.

3. Applicability of Section 122-A Adjudication Procedure:
The petitioner argued that Section 122-A of the Customs Act, which mandates an opportunity of hearing in adjudication proceedings, should apply to the prohibition order under Regulation 23. The court clarified that Section 122-A, contained in Chapter XIV dealing with the confiscation of goods and imposition of penalties, does not extend to the prohibition under Regulation 23. The court highlighted that Regulation 23's non-obstante clause allows for immediate action without prior notice or hearing.

4. Availability of Alternative Remedy under Section 129-A:
The petitioner claimed that an appeal under Section 129-A of the Customs Act was not available for the prohibition order under Regulation 23, as it was not an adjudication order. The court disagreed, citing previous judgments, including M/s. Capricorn Logistics Pvt. Ltd., which held that orders under Regulation 23 are appealable before the CESTAT under Section 129-A. The court emphasized that Regulation 21 allows a Customs Broker to appeal any order passed by the Commissioner of Customs under the Regulations, including prohibition orders under Regulation 23.

5. Interpretation of Regulations 18, 19, 20, 21, and 23 of the Customs Brokers Licensing Regulations, 2013:
The court examined the various regulations, noting that:
- Regulation 18 deals with revocation of license or imposition of penalty.
- Regulation 19 addresses suspension of license.
- Regulation 20 outlines the procedure for revoking a license or imposing a penalty.
- Regulation 21 provides for appeals by Customs Brokers against any order by the Commissioner of Customs.
- Regulation 23 allows for immediate prohibition of a Customs Broker from working in certain sections if obligations under Regulation 11 are not fulfilled.
The court concluded that the broad language of Regulation 21 encompasses appeals against prohibition orders under Regulation 23.

6. Jurisdiction of the High Court under Article 226 in the Presence of an Alternative Remedy:
The court reiterated the principle that the availability of an alternative remedy does not bar the jurisdiction of the High Court under Article 226 but is a rule of discretion. The court emphasized that issues should ideally be resolved through the statutory appellate mechanisms before invoking the extraordinary jurisdiction of the High Court. Given the availability of an appeal under Section 129-A, the court found it appropriate to direct the petitioner to pursue this remedy.

Conclusion:
The writ petition was dismissed as not maintainable, with the court directing the petitioner to avail the alternative remedy by filing an appeal under Section 129-A of the Customs Act. The court granted the petitioner four weeks to file the appeal and requested the Tribunal to consider the appeal on merits without raising objections on the ground of limitation.

← Previous Next →