2024 (11) TMI 137 - AT - Customs

Immediate suspension of the appellant Customs Broker s license under Regulations 16(1) of CBLR, 2018 and the continuation of such suspension - whether the impugned order has correctly held that it is covered under the category of appropriate cases where immediate action is necessary pending enquiry proceedings against alleged violations of Regulations 10(d), 10(e), 10(m) and 10(n) ibid? HELD THAT - On careful perusal of the B/E No. 8766607 dated 14.11.2023, more particularly at column H providing details of Processing Details , it is mentioned that the said B/E was submitted by the appellants before the customs authorities on 14.11.2023 at 21.06 Hrs.; thereafter, the said B/E was assessed on 15.11.2023 at 11.13 Hrs.; and the goods were examined on 18.11.2023 for which the examination report was made at 18.58 Hrs. and the imported goods were given Out-Of-Charge (OOC) by the customs officers performing their duties at the MoD CFS at 19.01 Hrs. on 18.11.2023. Even though it may be a fact that the container was not allowed to be moved out from the MOD CFS by the Customs officer posted at the gate office of said MOD CFS, the facts as indicated above in the B/E, do not support the allegations against the appellants CB, that they had indulged in illegal activities of removing the Container and taking it back to the examination area. On examination of the imported goods and giving permission for moving out of the CFS, are part of the duties of the customs officers posted at the MOD CFS and the responsibilities of the custodian of MOD CFS. Therefore, any illegality therein cannot be blamed against the appellants CB. We do not find that in terms of instructions of CBEC, any clear-cut findings, reasons were given by the learned Principal Commissioner in the impugned order for immediate suspension and/or its continuation, and therefore we have no hesitation to hold that the instructions laid down by CBIC had not been followed in this case. From the above discussion and analysis, we are of the considered view, that there is no sufficient and reasonable grounds made out in the impugned order, in respect of charges framed against the appellants CB, and therefore, the impugned order for continuing suspension of the CB license of the appellants cannot be sustained on merits. As in the case of N.C. Singha 1998 (6) TMI 91 - HIGH COURT OF JUDICATURE AT CALCUTTA had decided on the issue of immediate suspension specified in the CBLR, 2018 by holding that the basic requirements having not been fulfilled, as it did not spell out that such immediate suspension was required. The impugned order providing for continuation of the suspension of the appellants CB license does not survive the legal scrutiny. We accordingly modify the impugned Order by setting aside the suspension of the CB license of the appellants only, as indicated in paragraph 15.1 of the impugned order. The other part of the impugned order at paragraph 16, relating to proceeding to be initiated under Regulation 17 of CBLR, 2018 shall continue in accordance with law. The Principal Commissioner of Customs (General), NCH, Mumbai Zone-I shall issue necessary order immediately allowing operation of the CB license of the appellants.

Summary

Issues Involved:

1. Legality of the immediate suspension of the Customs Broker's license under Regulation 16(1) of the Customs Brokers Licensing Regulations (CBLR), 2018.
2. Alleged violations of Regulations 10(d), 10(e), 10(m), and 10(n) of CBLR, 2018 by the Customs Broker.
3. Compliance with the principles of natural justice and adherence to CBIC instructions regarding the suspension of licenses.

Issue-wise Detailed Analysis:

1. Legality of Immediate Suspension under Regulation 16(1) of CBLR, 2018:

The primary issue before the Tribunal was whether the immediate suspension of the Customs Broker's license was legally sustainable. The Tribunal noted that the Principal Commissioner of Customs (General) justified the suspension based on the CIU's report, which alleged that the Customs Broker attempted to clear mis-declared goods. However, the Tribunal found discrepancies in the evidence, notably in the panchanama proceedings, which reported conflicting details about the number of packages outside the container. The Tribunal emphasized that the suspension must be based on clear and immediate necessity, as outlined in the CBIC instructions. The Tribunal concluded that the suspension was not justified as the Principal Commissioner failed to provide sufficient grounds or reasons for immediate action, thus failing the legal scrutiny.

2. Alleged Violations of Regulations 10(d), 10(e), 10(m), and 10(n) of CBLR, 2018:

The Tribunal observed that the Principal Commissioner did not discuss the specific allegations of violations of these sub-regulations in detail. The Tribunal clarified that the appeal did not address whether the Customs Broker violated these sub-regulations, as separate inquiry proceedings under Regulation 17 were to be initiated. The Tribunal highlighted that the factual details concerning the alleged violations were not thoroughly verified or recorded, undermining the justification for the suspension.

3. Compliance with Principles of Natural Justice and CBIC Instructions:

The Tribunal found that the suspension order was issued in violation of the principles of natural justice and disregarded CBIC instructions, which mandate that suspensions should not be routine or mechanical and must be accompanied by reasons for immediate necessity. The Tribunal referenced several judicial precedents underscoring the need for caution and immediate necessity in suspension cases. The Tribunal determined that the Principal Commissioner did not adequately apply these principles or instructions, rendering the suspension order unsustainable.

Conclusion:

The Tribunal allowed the appeal, modifying the impugned order by setting aside the suspension of the Customs Broker's license. The Tribunal directed that the inquiry proceedings under Regulation 17 should continue, but the suspension should not. The Principal Commissioner was instructed to issue an order allowing the operation of the Customs Broker's license. The appeal was thus allowed, with the suspension order being partly set aside.