Swen Agencies Pvt. Ltd. Vs. Cc, TuticorIn and Cc, (Sea) - Court Judgment

Excerpt:
1. both the appeals have been filed by the same appellant, who is a customs house agent, one by their chennai office and the other by tuticorin branch office. vide order dated 7.1.2003, the commissioner of customs, customs house, tuticorin has suspended the licence of tuticorin branch of the cha under the provisions of regulations 21(2) of custom house agents licensing regulation, 1984 on the ground that they had filed a bill of entry dated 30.12.2002 for import of waste paper by m/s srivaikunth paper and boards pvt. ltd. without duly obtaining the authorization letter or consent of the said company.further, on examination of the container, it was noticed that 13400 cartons of 555 state cigarettes have been imported concealing them in waste paper which was seized by the customs house department. as such, the impugned order has alleged that the said cha tuticorin office has violated the obligations imposed upon them under the provisions of regulation 14 of the chalr, 1984.2. vide another order dated 20.1.2002, the commissioner of customs, chennai has suspended the cha licence of the chennai office of the said cha on the ground that in view of suspension of their branch office licence at tuticorin, the cha licence issued at chennai port is also liable for suspension.3. shri s. murugappan, learned advocate appeared on behalf of the appellant. as regards the suspension of licence at tuticorin, learned advocate submitted that there was no cause for immediate action against the appellant. the cha cannot be held liable for concealment of the cigarettes by the importer in the waste paper consignment. he submits that there is nothing on record to show that the appellant was in knowledge of the said fact or played any role for said concealing of cigarettes.4. as regards filing of a bill of entry without proper authorization, learned advocate submits that in the course of the discharge of their functions, they have to deal with huge number of imports and as such there can be possibility of some lapse on their part. in the absence of any intention to reflect upon their malafides, such a drastic action by the commissioner suspending their licence with immediate effect was not justified.5. arguing in the matter of suspension of their chennai office cha licence, learned advocate submits that there is no adverse allegation or finding by the commissioner in his impugned order suspending the licence. merely because their tuticorin branch office licence has been suspended by the jurisdictional commissioner cannot be made the basis for suspension of their licence at chennai. the appellants have been carrying on their works smoothly without any blemish and in the absence of any adverse finding against them, the suspension of the licence was not justified.6. countering the argument, learned jdr shri a.jayachandran draws our attention to the larger bench decision of the tribunal in the case of freightwings and travels ltd. v. cc, mumbai, 2001 (75) ecc 323 (t-lb) : 2001 (129) elt 226 (t-lb) wherein it was held that the commissioner has the powers to immediately suspend the licence of a customs house agent under the provisions of sub-regulation (2) of regulation 21 without following the procedure as provided under regulation 23. as such, he submits that the impugned order of suspension be upheld.7. we have considered the submissions made by both sides and have gone through the larger bench decision of the tribunal referred supra. in the said decision, it has been held that the procedure of issuance of show cause and personal hearing as provided under regulation 23 is not applicable to the proceedings under sub-regulation (2) of regulation 21. after observing so, the bench has held that after the suspension of the licence, the commissioner is required to give a post-decisional personal hearing to the cha on the question as to whether the suspension of the licence should continue or not. there can be no quarrel with the above proposition laid down by the larger bench. the commissioner is undisputedly having powers to suspend the licence under regulation 21 (2) of the chalr, 1984 but whether such a suspension order is fair or not in terms of the said regulations is required to be looked into. sub-regulation (2) of regulation 21 is to the effect that ".........notwithstanding anything contained in sub-regulation (1), the commissioner may, in appropriate cases, where immediate action is necessary, suspend the licence of custom house agent where an enquiry against the said agent is pending or contemplated". a reading of the above provision makes it clear that the powers are to be exercised under the said regulation only in appropriate cases and where an enquiry against the said agent is pending or contemplated. from the impugned order passed by the chennai commissioneratc suspending the licence issued to the appellant at chennai port, we find that there is no allegation of violation of the provisions of said regulations by the said licencee. similarly, we find that there is no enquiry either pending or being contemplated by the customs against the said chennai cha . the commissioner in his impugned order has suspended the licence on the sole ground that since their licence at tuticorin has been suspended, the licence at chennai is also required to be suspended. we are not convinced with the above reasoning of the commissioner suspending the licence at chennai, when there is no allegation of any contravention by the said licencee, thus taking his case out of the arena of an appropriate case. we are of the view that the suspension of the licence of appellant in respect of their chennai office is not justified. we accordingly set aside the order of suspension passed by the commissioner of customs, chennai.8. as regards the suspension order against the tuticorin branch office, we find that the commissioner has observed that the said appellant has violated the provisions of regulation 14 inasmuch as they filed the bill of entry without obtaining the authorization or consent of the importer. inasmuch as there are allegations and findings against the said cha and the commissioner by passing the impugned order has taken interim measures to avoid any further mischief by the said licencee, we find ourselves unable to find any fault with the impugned order.however, as laid down by the larger bench of the tribunal in the case of m/s. freight wings and travels ltd. referred supra, the appellant is required to be given a post-decisional hearing as soon as possible and to pass an appropriate speaking order on the issue of continuation of suspension. accordingly,; we direct the commissioner of customs, tuticorin to do the needful within a period of two months from the date of receipt of the said order, failing which the suspension of the licence would get revoked on expiry of the said period.9. in view of foregoing, the appeal filed by m/s.swen agencies pvt.ltd., chennai is allowed by revoking the suspension of licence and the appeal filed by m/s.swen agencies pvt. ltd., tuticorin is disposed of with directions to the commissioner to decide their case as regards the suspension of their licence within the time limit given by us in the above paragraph. both the appeals are disposed of accordingly. early hearing applications also get disposed of.

Judgment:
1. Both the appeals have been filed by the same appellant, who is a Customs House Agent, one by their Chennai office and the other by Tuticorin branch office. Vide order dated 7.1.2003, the Commissioner of Customs, Customs House, Tuticorin has suspended the licence of Tuticorin branch of the CHA under the provisions of Regulations 21(2) of Custom House Agents Licensing Regulation, 1984 on the ground that they had filed a Bill of Entry dated 30.12.2002 for import of waste paper by M/s Srivaikunth Paper and Boards Pvt. Ltd. without duly obtaining the authorization letter or consent of the said company.

Further, on examination of the container, it was noticed that 13400 cartons of 555 State Cigarettes have been imported concealing them in waste paper which was seized by the Customs House department. As such, the impugned order has alleged that the said CHA Tuticorin office has violated the obligations imposed upon them under the provisions of Regulation 14 of the CHALR, 1984.

2. Vide another order dated 20.1.2002, the Commissioner of Customs, Chennai has suspended the CHA licence of the Chennai office of the said CHA on the ground that in view of suspension of their branch office licence at Tuticorin, the CHA licence issued at Chennai Port is also liable for suspension.

3. Shri S. Murugappan, learned Advocate appeared on behalf of the appellant. As regards the suspension of licence at Tuticorin, learned Advocate submitted that there was no cause for immediate action against the appellant. The CHA cannot be held liable for concealment of the cigarettes by the importer in the waste paper consignment. He submits that there is nothing on record to show that the appellant was in knowledge of the said fact or played any role for said concealing of cigarettes.

4. As regards filing of a Bill of Entry without proper authorization, learned advocate submits that in the course of the discharge of their functions, they have to deal with huge number of imports and as such there can be possibility of some lapse on their part. In the absence of any intention to reflect upon their malafides, such a drastic action by the Commissioner suspending their licence with immediate effect was not justified.

5. Arguing in the matter of suspension of their Chennai office CHA licence, learned advocate submits that there is no adverse allegation or finding by the Commissioner in his impugned order suspending the licence. Merely because their Tuticorin branch office licence has been suspended by the jurisdictional Commissioner cannot be made the basis for suspension of their licence at Chennai. The appellants have been carrying on their works smoothly without any blemish and in the absence of any adverse finding against them, the suspension of the licence was not justified.

6. Countering the argument, learned JDR Shri A.Jayachandran draws our attention to the Larger Bench decision of the Tribunal in the case of Freightwings and Travels Ltd. v. CC, Mumbai, 2001 (75) ECC 323 (T-LB) : 2001 (129) ELT 226 (T-LB) wherein it was held that the Commissioner has the powers to immediately suspend the licence of a Customs House Agent under the provisions of Sub-regulation (2) of Regulation 21 without following the procedure as provided under Regulation 23. As such, he submits that the impugned order of suspension be upheld.7. We have considered the submissions made by both sides and have gone through the Larger Bench decision of the Tribunal referred supra. In the said decision, it has been held that the procedure of issuance of show cause and personal hearing as provided under Regulation 23 is not applicable to the proceedings under Sub-regulation (2) of Regulation 21. After observing so, the Bench has held that after the suspension of the licence, the Commissioner is required to give a post-decisional personal hearing to the CHA on the question as to whether the suspension of the licence should continue or not. There can be no quarrel with the above proposition laid down by the Larger Bench. The Commissioner is undisputedly having powers to suspend the licence under Regulation 21 (2) of the CHALR, 1984 but whether such a suspension order is fair or not in terms of the said Regulations is required to be looked into. Sub-regulation (2) of Regulation 21 is to the effect that ".........notwithstanding anything contained in Sub-regulation (1), the Commissioner may, in appropriate cases, where immediate action is necessary, suspend the licence of Custom House Agent where an enquiry against the said agent is pending or contemplated". A reading of the above provision makes it clear that the powers are to be exercised under the said regulation only in appropriate cases and where an enquiry against the said agent is pending or contemplated. From the impugned order passed by the Chennai Commissioneratc suspending the licence issued to the appellant at Chennai port, we find that there is no allegation of violation of the provisions of said Regulations by the said licencee. Similarly, we find that there is no enquiry either pending or being contemplated by the Customs against the said Chennai CHA . The Commissioner in his impugned order has suspended the licence on the sole ground that since their licence at Tuticorin has been suspended, the licence at Chennai is also required to be suspended. We are not convinced with the above reasoning of the Commissioner suspending the licence at Chennai, when there is no allegation of any contravention by the said licencee, thus taking his case out of the arena of an appropriate case. We are of the view that the suspension of the licence of appellant in respect of their Chennai office is not justified. We accordingly set aside the order of suspension passed by the Commissioner of Customs, Chennai.

8. As regards the suspension order against the Tuticorin branch office, we find that the Commissioner has observed that the said appellant has violated the provisions of Regulation 14 inasmuch as they filed the Bill of Entry without obtaining the authorization or consent of the importer. Inasmuch as there are allegations and findings against the said CHA and the Commissioner by passing the impugned order has taken interim measures to avoid any further mischief by the said licencee, we find ourselves unable to find any fault with the impugned order.

However, as laid down by the Larger Bench of the Tribunal in the case of M/s. Freight Wings and Travels Ltd. referred supra, the appellant is required to be given a post-decisional hearing as soon as possible and to pass an appropriate speaking order on the issue of continuation of suspension. Accordingly,; we direct the Commissioner of Customs, Tuticorin to do the needful within a period of two months from the date of receipt of the said order, failing which the suspension of the licence would get revoked on expiry of the said period.

9. In view of foregoing, the appeal filed by M/s.Swen Agencies Pvt.

Ltd., Chennai is allowed by revoking the suspension of licence and the appeal filed by M/s.Swen Agencies Pvt. Ltd., Tuticorin is disposed of with directions to the Commissioner to decide their case as regards the suspension of their licence within the time limit given by us in the above paragraph. Both the appeals are disposed of accordingly. Early hearing applications also get disposed of.