9911796707
TMI Blog2015 (8) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be invalid and ultra vires when Board was invested with powers to make regulations generally for purpose of regulating license of CHA. Impugned order was challenged only on ground that before passing prohibitory order, opportunity of hearing was not given to petitioner – On consideration, impugned order cannot be sustained as said order was final – Well-settled law that even administrative orders which affects rights of party can be passed only by following principles of natural justice – Order under Regulation 21 was passed in violation of principles of natural justice on face of it was arbitrary and thus not sustainable in law – Petition allowed – Impugned order set aside – Decided in favour of Petitioners. - D.B. Civil Writ Petition Nos. 7266, 7896 and 7345 of 2013 - - - Dated:- 29-11-2013 - Dinesh Maheshwari and Narendra Kumar Jain-II, JJ. Shri S.S. Hora and Sunil Kumar Singh, for the Petitioner. Shri Anil Mehta and Ajay Shukla, for the Respondent. ORDER Preliminary : These three writ petitions, filed on similar nature grievance of the respective petitioners and founded essentially on similar grounds, have been considered together; and are taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been cleared for export as Polished Marble Slabs from ICD, Thar Dry Port, Jodhpur under shipping bill Nos.15885541 1585524 both dated 3-9-2012 and had begun sailing to the destined port, which were called back to Mundra Port and seized. According to the department, the preliminary inquiry revealed that the said shipping bills were filed by the representative of the petitioner Shri Ajay Vyas on behalf of M/s. Ritu Corporation, the exporter; but then, the PAN card and the IEC of the exporter M/s. Ritu Corporation, had been obtained by providing fictitious names and addresses. It is alleged that per Regulation 13(o) of the Regulations, a Customs House Agent is required to verify the antecedents, correctness of Importer Exporter Code (IEC) Number, identity and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information but the petitioner failed to fulfill its obligation and facilitated unauthorized transport of prohibited goods by replacement of cargo. 6. The grievance of the petitioner is that without any show cause notice or calling for any explanation, it has directly been prohibited to transact business in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this count alone. CWP No. 7896/2013 10. In CWP No. 7896/2013, the petitioner is another CHA who is aggrieved of another prohibition order dated 11-4-2013 (Annex. 20) which came to be passed by the Commissioner of Customs, Jodhpur (Headquarters Jaipur) prohibiting his transacting business in the jurisdiction of Commissionerate of Customs (Preventive), Jodhpur on the allegations that he, acting as CHA under licence No. 2/CHA/R/92, failed to comply with Regulation 13(d), (e) and (o) of the Regulations of 2004 while acting on behalf of the importer M/s. Ketki International and while filing the bill of entry No. 698 dated 4-5-2011 for 468 Kg of Glass Chatons Grade B. 11. It has been alleged that Glass Chatons Grade B were misdirected as Grade B and the actual value was not reflected in the invoice. According to the department, from the investigation of the DRI, it was found that one Shri Sri Krishna Tambi and his son Shri Sachin Tambi, in active assistance of Shri Anoop Khandelwal and Shri Saurabh Khandelwal, hatched a conspiracy for defrauding the government revenue by floating a fraudulent firm in the name of M/s Ketki International and strategically proceeded by openin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the same has been issued without application of mind and in violation of the principles of natural justice. CWP No. 7345/2013 17. This petition has been filed by Shri Kailash Solanki. said to be the Director of PAP-Fast Movers (I) Ltd., stating grievance against similar nature prohibitory order issued on 17-4-2013 (Annex. 1) by the Commissioner of Customs, Jodhpur, against the said company having CHA Licence No. 1/CHAL/R/92, for failing to comply with Regulation 13(d), (e) and (o) of the Regulations of 2004 where for smuggling of Red Sanders Logs could be attempted by the alleged exporters. 18. It had been the allegation that under a Shipping Bill No 1293 dated 26-9-2011 declaring description of goods as Indian Wooden Furniture Goods Hand Painted/Decorated Items and country of destination as Jebel Ali (UAE), the export goods were stuffed in a container No. CLHU 3378378 at ICD RAJSICO Jodhpur The consignment was called back from Jebel Ali Port on the basis of the information that the same contained prohibited goods viz. Red Sanders Logs. After examination of the said container by DRI, Gandhidham, 606 logs of Red Sanders weighing 15.585 Mts were recovered and seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for transacting the business with immediate effect as provided under Regulation 21 of the CHALR, 2004. Thus, according to the petitioner, the Board has travelled beyond the powers conferred under Section 146(2) in framing Regulation 21 of CHALR, 2004. Rival contentions : 22. Putting a scathing attack on the orders of prohibition passed under Regulation 21 of the Regulations of 2004, the learned counsel appearing for the petitioners have contended that such orders of prohibition, which entail drastic civil and evil consequences for the petitioners, have been passed rather in colourable exercise of powers and deserve to be quashed. It is submitted that in relation to the allegations, which are either of uncertain nature or have been made without proper appreciation of the record, the authorities could not have put a blanket ban on the working of the petitioners in the name of prohibition orders. The learned counsel contended that the orders have, admittedly, been passed without extending any opportunity of hearing to the respective petitioners, and once such an order of prohibition is passed, the suggested opportunity of post-decisional hearing would only be a formality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 have been made by the Central Board of Excise Customs [ the Board ] in exercise of the powers conferred by Section 146(2) of the Customs Act, 1962. The provisions of Section 146 read as under:- 146. Customs house agents to be licensed. - (1) No person shall carry on business as an agent relating to the entry or departure of a conveyance or the import or export of goods at any customs station unless such person holds a licence granted in this behalf in accordance with the regulations. (2) The Board may make regulations for the purpose of carrying out the provisions of this section and in particular, such regulation may provide for - (a) the authority by which a licence may be granted under this section and the period of validity of any such licence; (b) the form of the licence and the fee payable therefor; (c) the qualifications of persons who may apply for a licence and the qualifications of persons to be employed by a licensee to assist him in his work as an agent; (d) the restrictions and conditions (including the furnishing of security by the licensee) subject to which a licence may be granted; (e) the circumstances in which a licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs House Agent, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs House Agent, for the purpose of ascertaining the correct position. (4) The Customs House Agent shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers regarding period of validity of license, its form, fee payable therefor, the qualification of the concerned person, and restrictions conditions for granting of license. Obviously, when a power to grant license in such a regulatory provision is given, the Board has also been invested with the powers to provide for the circumstances in which the license could be suspended or revoked as also for appeal against such suspension or revocation. 31. A glance at the Regulations of 2004 gives out that elaborate provisions have been made for the purpose of grant and regulation of such licenses to the Customs House Agents. Amongst others, Regulation 13 therein specifically spells out the obligations of the Customs House Agents, which are essentially the conditions subject to which a licence is granted, per clause (d) of sub-section (2) of Section 146 of the Act. Under Regulation 20(1), the Commissioner of Customs has been authorized, subject to Regulation 22, to revoke the license of a CHA on any of the grounds stated therein, viz., failure of CHA to comply with the conditions of bond; failure of CHA to comply with any of the provisions of the Regulations; or any misconduct on his par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, as are available with the Commissioner of Customs, in order to achieve the object for which the Regulations have been framed. 35. Noticeable it is that even the preventive measures powers appear to be of 2 modes; one as seen in Regulation 20(2), of immediate suspension of license even in cases where inquiry is contemplated; and the other one in Regulation 21, which is obviously of a degree lesser than that of Regulation 20(2). In Regulation 21, the Commissioner of Customs is empowered to order prohibition of working of CHA only in one or more sections of the Customs Station, upon his satisfaction that CHA has not fulfilled his obligations under Regulation 13 in relation to the work in that section or sections. 36. On the basic principles dealing with the law of Statutes, the presumption is always in favour of validity and legality of a statute or its provisions. Then, interpretation of a provision or statute is not a mere exercise in semantics but is an attempt to find out the meaning from the words used and to understand the context and the purpose of the expression used; and ultimately to construe the expression sensibly [Vide the principles in Ajay Kumar Benarji : (198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, courts will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing, shorn of all its formal trappings and dilatory features at the pre-decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. 40. The learned counsel for the petitioners have forcefully argued that it is the pre-decisional hearing that conforms to the requirements of principles of natural justice and the post-decisional one, if suggested, remains rather a formality and in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 6-9-2012 passed by the Commissioner of Customs, Customs House, Tuticorin. 2. The Regulation 21 of the Customs House Licence reads as under: Regulation 21. Prohibition. - Notwithstanding anything contained in regulation 22, the Commissioner of Customs may prohibit any Customs House Agent from working in one or more Sections of the Customs Station, if he is satisfied that such Customs House Agent has not fulfilled his obligations as laid down under regulation 13 in relation to work in that Section or Sections. 3. The impugned order is challenged only on the ground that before passing the prohibitory order against the petitioner, an opportunity of hearing was not given to the petitioner. 4. On notice, the Writ Petition is opposed by the learned counsel for the respondent on the ground that the order under Regulation 21 is in the nature of interlocutory order for want of jurisdiction of the authorities to pass order of revocation or suspension therefore no show cause notice is required to be issued. 5. On consideration, I find that the impugned order cannot be sustained. The order of prohibition is a final order passed by the authority not vested any power to exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le under 20(2) of the regulations the same authority may in appropriate cases where immediate action is necessary suspend the license of the agent where enquiry against such agent is pending or contemplated. The emphasis is on the expression immediate action is necessary and enquiry against such agent is pending or contemplated . Furthermore, this regulation opens with non-obstante expression notwithstanding anything contained in sub-regulation (1) Thus, provisions of sub-regulation (2) would take precedence and recourse thereto can be taken despite the pendency of proceedings for revocation of license. In normal course, the procedure prescribed under Regulation 22 has to be followed by the authorities. In a case where immediate or emergent circumstances do not exist, notice should be issued to the agent, before authorities could pass an order in exercise of their powers under Rule 20(1) or 21. However, this may not be quite true in an emergent situation. Where the authorities are of the considered view that the facts and circumstances disclose sufficient grounds for invoking emergent provisions and it is absolutely essential to suspend the license of the agent, in public inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved. 11. The exclusion of principles of natural justice by specific legislative provision is not unknown to law. Such exclusion would either be specifically provided or would be imperative consequence of language of the provision. Instead of making a final order without hearing, a temporary action may be necessary without a full hearing. In such cases, due process is specified by offering a full hearing before the final order is made. Of course, such legislation may be struck down as offending due process, if no safeguard is provided against arbitrary action. It is equally settled principle that in cases of urgency, a post-decisional hearing would satisfy the principles of natural justice. Reference can be made to the case of Maneka v. Union of India (1978) 1 SCC 248 and State of Punjab v. Gurdayal AIR 1980 SC 319. 46. In S.R. Sale Co. v. Union of India Ors : Writ Petition (L) No. 1102/2013 decided on 9-5-2013 [2013 (296) E.L.T. 289 (Bom.)], the Hon ble Bombay High Court has specifically considered the question in relation to an order passed under Regulation 21 and has observed as under : 3 Regulation 21 does not exclude the requirement of complying with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after offering the person to present his case and after passing a reasoned order; and made the recommendation that the provisions be made more explicit in the Regulation itself. The Bombay High Court noted that Regulation 21 has, however, not been amended thereafter. Taking all the internal and external aids for the purpose of interpretation, the Hon ble Bombay High Court has said,- ..... As a matter of first principle, whereas in the present case, the subordinate legislation is silent in regard to compliance with the principles of natural justice, the requirement of compliance with those principles has to be read into the provision. However, in a situation where urgent or immediate action is necessary, and waiting for the outcome of a pre-decisional hearing will defeat the public interest and obstruct or impede the proper functioning of a Customs Station, it would be open to the Commissioner under Regulation 21 to pass an immediate prohibitory order for a limited period and to afford to the CHA, in the meantime, an opportunity of being heard. Pursuant to that opportunity, it is open to the CHA to place facts on record in support of the plea that the prohibitory order ought no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic interest or impede the proper function of the Customs Station, it would be open for the Commissioner to pass an immediate prohibitory order for a limited period and to afford the CHA an opportunity of being heard, which would obviously be in the balance of the principles of natural justice and necessity of protecting public interest in appropriate cases. 53. In the present matters, it is not in dispute that the orders of prohibition have been passed without extending opportunity of hearing to the petitioners. Having regard to the circumstances, we are not dealing with and pronouncing on the merits of these cases but then, the petitioners have indicated several aspects on merits which do require consideration by the authorities concerned so as to decide as to whether the order of prohibition ought to be continued or not. Therefore, it does appear in the interest of justice that while limiting the operation of the order of prohibition, if continuing yet, to a period of four weeks from the date of this order, the Commissioner concerned be directed to pass an appropriate speaking order in these matters after extending an adequate opportunity of hearing to the respective parties ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
