2018 (9) TMI 1603 - AT - Customs

Prohibition order on CHA - prohibiting the appellant from working in any sections of the Chennai Customs station under the jurisdiction of Chennai Customs Zone - misuse of IE Code by third parties, without their consent or knowledge - it is also a case of appellant that prohibition order has been continued for a long time without giving a specific period of prohibition and without any SCN to initiate proceedings for revocation of licence. Held that - The prohibition order issued without mentioning any specific period cannot sustain and requires to be set aside - however the Department is at liberty to initiate proceedings under Regulation 20 of CBLR as per the provisions therein - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Misuse of IE Code by third parties
2. Show cause notice and prohibition order issued to Customs Broker
3. Validity of prohibition order and failure to initiate proceedings under CBLR

Analysis:
1. The case involved a Customs Broker who was accused of misusing the Importer Exporter Code (IE Code) of a third party without consent. A complaint was filed by the third party, leading to the issuance of a show cause notice and a subsequent prohibition order by the Customs authorities.

2. The appellant, represented by counsel, argued that the authorization letter from the third party was obtained to file the Bill of Entry. It was contended that the prohibition order lacked a specific period, essentially revoking the appellant's license indefinitely. Reference was made to the necessity of initiating proceedings under Regulation 20 of the Customs Broker Licensing Regulations (CBLR) within 90 days, which had not been done in this case. The appellant relied on legal precedents to argue against the sustained prohibition order.

3. The respondent, supporting the prohibition order, highlighted the appellant's failure to obtain proper authorization and comply with relevant regulations. It was argued that the prohibition order was justified due to violations of CBLR provisions regarding verification of client identity and documentation.

4. The Tribunal considered the arguments presented by both sides. It was noted that the prohibition order lacked a specific duration, effectively disabling the appellant from functioning as a Customs Broker indefinitely. Citing Regulation 23 of the CBLR, the Tribunal emphasized that such prohibitions should be limited to specific sections and cannot extend to all sections without due process. The Tribunal found the continued prohibition without following procedural requirements or principles of natural justice to be unjustifiable.

5. Relying on a previous decision, the Tribunal set aside the prohibition order, stating that the department could initiate proceedings under Regulation 20 of the CBLR as required. The appeal was allowed, providing consequential relief as necessary. The Tribunal emphasized the importance of following due process and principles of natural justice in such cases.