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TMI Blog2023 (9) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... livelihood of the person and his employees needs to be exercised with caution and in accordance with the inbuilt safeguards, to prevent the arbitrary and reckless use of the power - in the present case, Commissioner has not recorded any reason for the cause of immediate suspension. Infact, there is no cogent reason or finding recorded by the Commissioner to suspend the license of the appellant two years after the date of export. The present impugned order passed under Regulation 16 is without there being any finding as to why immediate action is necessary to suspend the license - Appeal allowed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Present for the Appellant : Shri Priyadarshi Manish, Advocate Present for the Respondent :Shri M R Dhania, Authorised Representative ORDER The present appeal is filed against the suspension order dated 02.03.2023 vide which the license of the Custom Broker (CB) was suspended with immediate effect. It has been alleged that the Appellant CB had filed the shipping bills during the period of 27.02.2021 to 15.05.2021 on behalf of an exporter whose first GSTIN was Suo-moto cancelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He also submitted that the appellant has not cleared any consignment of said exporter after 15.05.2021 and till that date, the exporter was in existence at their registered Delhi premises. The learned Counsel further submitted that the Commissioner has ignored the fact that verification report is not in consonance with the fact that the exporter, alleged to be non-existent, was very much in existence at the time of exports. He contended that the exporter had also participated in the investigation as well as the adjudication conducted by the Preventative Customs formation. He emphasised that the statement of the exporter recorded under Section 108 of the Customs Act, 1962 provided various details viz., Aadhar number, address of premises, residential address of partner of exporting firm etc. which makes it apparent at the time of export, the exporting firm was very much in existence. 4. The learned Counsel stated that even the cancellation of GST registration retrospectively of the exporter after the export does not support the case of respondent. The Commissioner has passed the suspension order dated 13.02.2023 erroneously, harping on the point that the exporter has two GSTIN a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry report is itself made the prima facie case in favour of the custom broker/and provided sufficient ground for revocation of the suspension. He submitted that the Commissioner in his impugned order in paragraph 13 has categorically mentioned that due to limited time window available, it is not possible at this stage to go into expensive detail or nitty-gritty of KYC document or other compliances required of the custom broker also about document are valid /not valid/not forged etc. and as whether the CB was in breach/not breach of any regulatory compliance can be established valid through the medium of enquiry. The said enquiry had not only been conducted but that appellant had been exonerated. Therefore, the continuance of the suspension has no reason to stay and the same should be set-aside. 4.1 Finally, the learned Counsel submitted that that the impugned order had affected the livelihood of not only the Customs broker but the other employees of the Customs Broker. He prayed that in the present facts and circumstances, the impugned order should be set-aside. 5. The learned Authorised Representative reiterated the discussions and findings given in the impugned order. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Customs may deem fit for reasons to be recorded in writing, he may suspend the license for a specified number of Customs Stations. (2) Where a license is suspended under sub-regulation (1), the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose license is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs Broker : Provided that in case the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, passes an order for continuing the suspension, further procedure thereafter shall be as provided in regulation 17. (Emphasis supplied) 8. We note that in the present case, the cause of action i.e., filing the Shipping Bill was in May 2021, whereas the suspension has been ordered in March, 2023. Therefore, there is no proximity in time between these two events, to establish any emergent need for suspension of Custom Broker license. Further, the Commissioner in the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, without which an atmosphere of lack of accountability would pervade the entire exercise. 6. In the present instance, it is seen that the gap between the original order of suspension on 12th July, 2018 and confirmation of the said suspension is close to two months. The Regulations prescribe that the offer and completion, of post decisional process be limited to 15 days from the date 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 Regulations, 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . Therefore, it is not only necessary to state the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary 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 license 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. Similar findings were recorded by the the Calcutta High Court in its decision N.C. Singha Sons v. Union of India (Cal.) (1998 (104) E.L.T. 11) wherein the very same Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984, was considered. Paragraph Nos. 4 and 5 are reproduced as follows : 4. We have heard the Learned Advocates for the parties and considered the rival contentions. Regulation 21(2) of 1984 Regulations read thus: 21(2). Notwithstanding anything contained in sub-regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has concluded as follows:- 12. The Regulation 10(n) states that the CB should verify correctness of IEC number, GSTIN, identity of his client and functioning of Skype that the declared address by using reliable, independent, authentic documents, data or information. I find that CB has submitted KYC documents pertaining to the exporter. The CB has also submitted that has taken reasonable steps to verify the working of the exporter. It can be said that the documents submitted is not time sensitive as it does not disclose whether the KYC documents were taken for the exporter after the export but it is the CB s defence that KYC documents were taken before the consignment was exported. This defence of the CB ought to be accepted as there is no evidence on record which suggests anything contrary to the stand taken by the CB. 13. In view of above analysis and asked findings of the Commissioner of Customs (Airport General) recorded in para 11- para 15 of Order-in- Original 18/ ZR /Suspension/ Confirmation/Policy/2023 dated 02.03.23, it does not appear to be me that M/s Shakti Cargo Movers, the CB has violated the provisions of Regulation 10(d), Regulation 10(e) and Regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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