2004 (1) TMI 499 - AT - Customs

Tribunal overturns CHA license suspension, emphasizes fair process for Customs agents

MD SADRANI Versus COMMISSIONER OF CUSTOMS (GENERAL), MUMBAI

The Tribunal allowed the appeal by M/s. M.D. Sadrani, a Customs House Agent (CHA), challenging the suspension of their CHA license under Regulation 21(2) ... Custom House Agents licence - Suspension of - Natural justice - Violation of Issues:Suspension of CHA license under Regulation 21(2) of CHA Licensing Regulation, 1984 without offering a hearing to the appellants.Analysis:The case involved an application by M/s. M.D. Sadrani, a Customs House Agent (CHA), against the order of the Commissioner of Customs suspending their CHA license under Regulation 21(2) of the CHA Licensing Regulation, 1984. The suspension was pending an enquiry under Regulation 23. The main contention raised in the appeal was that immediate action was not necessary as the adjudication proceedings against the exporters were still pending. The show cause notice to the exporter was issued late, and the offence was yet to be established. The appellant argued that the ex parte order suspending the license was not sustainable under Regulation 21 of the CHA Regulation.The facts of the case included the receipt of a letter from the Addl. Director General, Directorate General of Central Excise Intelligence, enclosing a show cause notice-cum-Demand Notice dated 2-7-2003 against M/s. Swami Fashions Pvt. Ltd. and M/s. Skyline Marketing of Mumbai, implicating the role of M/s. M.D. Sadrani, CHA No. 11/337 in the evasion of Customs duties through the processing and issuance of forged shipping bills.Upon hearing both sides, the Tribunal noted that while the Commissioner had the power to suspend the license under Regulation 21(2) pending enquiry, the continued suspension without hearing the appellants was unjustified. It was observed that the allegations against the exporter were yet to be proven, and the Customs authorities should suspend the license only after conducting a proper enquiry. Consequently, the Tribunal held that the continued suspension of the license as per the impugned order was not sustainable.In the final judgment, the appeal was allowed, and the impugned order was set aside. However, it was clarified that the department could take appropriate action against the CHA license through a regular enquiry if deemed necessary for any alleged misconduct in accordance with the CHA Regulations. The appeal was allowed accordingly.