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TMI Blog2019 (12) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... e of immediate suspension. This post decision hearing is not an empty formality but the responsibility cast on the Commissioner to decide the issue of continuation of suspension in reasonable and logical manner by way of speaking order, clearly recording the reasons for suspension of licence. The reason obliviously cannot be enquiry is contemplated simplicitor. In the present case Commissioner has not recorded any reason for the cause of immediate suspension or continuation of the suspension. We do not find any merits in the impugned order to sustain the same. - the appeal is allowed - Customs Appeal No. 86454 of 2019 - A/87002/2019 - Dated:- 26-8-2019 - Hon ble Dr. D.M. Misra, Member (Judicial) And Hon ble Mr. Sanjiv Srivastava, Member (Technical) Shri Sanjay Kalra, Advocate, for the Appellant Shri Bhushan Kamble, Assistant Commissioner, Authorised Representative for the Respondent ORDER PER: SANJIV SRIVASTAVA This appeal is directed against the Order No 131/2018-19 dated 27.03.2019 of Principal Commissioner of Customs (General), Mumbai-I. By the impugned order, C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 9 and 10 of the impugned order recorded as follows, giving the reasons for immediate action and continuation of suspension of license: 9. I find that the para 4 of the said offence report dated 26.11.2018, mentions that as per the statements of M Mukesh Prabhu Desai, Director of Ratandip Shipping Pvt Ltd recorded under Section 67 of NDPS Act, 1985 on 1.11.2018 and Mr Nilesh Nimbalkar, employee of M/s Ratandip Shipping Pvt Ltd recorded on 6.11.2018, it appears that the CB has failed in fulfilling the obligations and violated the provisions of Regulations , The above omission and commission by M/s Ratandip Shipping Private Limited [Customs Broker license No AADCR1944GCH001, 11/949] appears to be in violation of Regulation 10 of the Customs Broker Licensing Regulations, 2018 (erstwhile Regulation 11 of Customs Broker Licensing Regulation, 2013) 10. From the evidence on record, prima facie, it emerges that the Customs Broker M/s Ratandip Shipping Private Limited [Customs Broker license No AADCR1944GCH001, 11/949] have violated provisions of regulation 1 of CBLR, 2018 [erstwhile Regulation 11 of Customs Broker Licensing Regulation, 2013] as di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is that investigation was pending which could be hampered and further irregularities could take place unless licence was suspended. We cannot reappreciate correctness of such assessment. Such power has to be exercised on assessment of a fact situation by the concerned authority. Such assessment can be interfered only if exercise of power was arbitrary or mala fide. It is not possible to hold that there was no reason whatsoever for taking action under Regulation 20(2) of the Regulations, so as to call for interference by this Court. 6.We also find that under Regulation 20(3) of the Regulations, opportunity of hearing is required to be given within 15 days of the order of suspension. There is no challenge to the scheme of the Regulations for not providing prior hearing. No doubt where a party is affected, normal rule of natural justice is that hearing is to be given to the affected party before passing an order, but in emergent situation, order can be permitted to be passed, subject to the hearing being given within reasonable time. The petitioners will have an opportunity to put forward her case before the concerned authority within 15 days of the passing of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to furnish his report to the Commissioner within 30 days of the detection of the offence. This appears to be an internal guideline issued by the Board. I am of the considered view that this instruction contained in the circular is not part of the Regulation made by the Board. The statute has authorized the Board to make Regulations and the Regulations so made have statutory force. The instructions issued over and above the Regulations cannot be put on the same footing as statutory regulations nor would it be proper for the Tribunal to grant relief treating the instructions to be statutory Regulations which they are not. 4. As such, when the impugned suspension order has been issued within the time-limit of 15 days prescribed under the Regulation, the required post-decisional hearing has also been granted by the Commissioner on 28-10- 2011, and necessary order for continuing the order of suspension has been passed on 11-11-2011, it is not legally possible nor it is desirable for the Tribunal to set aside the impugned suspension order. Besides, the action to suspend the CHA licence is only a preliminary and interim measure. Subsequently, the authorities are requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5%, (in addition to the 1% agency charges) of the assessable value from importers as a service charges and this extra money was collected in cash stating that it was required to distribute for hassle free clearances. Shri Vikram Jhangiani, Managing Partner of M/s. M. Dharamdas Co. in a statement recorded under Section 108 admitted that he was sharing profits with Shri Madan Lalwani and he did not know the parties who were clearing the cranes through M/s. M. Dharamdas Co. The various importers and representatives have also admitted that Shri Madan Lalwani advised them to quote certain pre-determined prices for the import of cranes rather than the actual transaction values. From the foregoing, it appeared that M/s. M. Dharamdas Co. had indulged in Customs valuation fraud and also violations of various provisions of CHALR such as violation of, - Regulation 12 of subletting of licence; Regulation 13(b) of transacting business through unauthorised persons; Regulation 13(d) for not advising the importers properly; Regulation 13(e) for not exercising due diligence in ascertaining the correct information and furnishing the same to the Customs; Regulation 13(f) for withholding informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the first suspension. It would, therefore, be reasonable to expect such confirmation order soon after the hearing, however much the delay is attributable to the broker, instead of it being much delayed even further. On ascertainment of the present status of the proceedings, Learned Authorised Representative is unable to assure us that the proceedings under regulation 19 of Customs Broker Licensing Regulation, 2018 would commence in the near future. All that is available on record is that the investigation in a major fraudulent activity is still under way. It is not the case of the respondent- Commissioner that any act on the part of the appellant has delayed the initiation of proceedings. The explanation that investigation is pending is also not readily acceptable. It would appear that either the evidence required to sustain the proceedings is not available or that the role of the customs broker may not have been so critical in the transaction to fraudulently claim the drawback. Either way, the continuation of suspension in such circumstances does not, in our opinion, appear to be in concord with the principles of accountability or of prompt response. There is no evidence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either imposing a punishment or otherwise. At this juncture, it is relevant to note that Regulation 11(1) empowers the very same Commissioner to suspend or revoke the license and the procedure to be followed for suspension or revocation of the license is contemplated under Regulation 12. Perusal of the Regulation 12 would show that before doing so, the licensee should be put on notice and he must be heard. However, Regulation 11(2) can be invoked for suspending the license only when the Commissioner of Customs feels and comes to a conclusion that immediate action is necessary to suspend the license. Thus, the materials to be relied on for initiating and taking action under Regulation 11(1) cannot be the sole basis for taking action under Regulation 11(2). On the other hand, when an action under Regulation 11(2) is contemplated, there must be other reasons available before the Authority for his consideration to the effect that unless such immediate suspension is ordered, the damage already caused would either continue or likely to continue. In other words, the suspension to be made by invoking Regulation 11(2) must be on the known principle that prevention is better than cure . Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other as to whether on the facts of the case immediate action was necessary or was not necessary because it is for the Collector to take decision in that regard. 9. In the absence of any indication that there was application of mind by the Collector on the aspect as to whether immediate action was necessary, in my opinion, the impugned order cannot be sustained. The Collector gets jurisdiction to suspend the licence in cases where immediate action is necessary. In this view I consider it just and appropriate to pass the following order :- The writ petitions allowed and the impugned order dated 26-9-1994 issued by the respondent is quashed. It is open to the respondent if so desired to exercise the power under Section 21(2) and pass appropriate orders. 11. Likewise, the Division Bench of Calcutta High Court in its decision reported [in] 1998 (104) E.L.T. 11 (Cal.) (N.C. Singha Sons v. Union of India) has considered the very same Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984, and found at paragraph Nos. 4 and 5 as follows : 4. We have heard the learned Advocates for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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