2014 (3) TMI 981 - HC - Customs

Court upholds suspension of courier license under 1998 Regulations despite lack of notice and procedural fairness.

DHL EXPRESS INDIA PVT. LTD. Versus UNION OF INDIA

DHL EXPRESS INDIA PVT. LTD. Versus UNION OF INDIA - 2015 (316) E.L.T. 651 (Kar.) Issues Involved:1. Legality of the suspension order.2. Obligations and responsibilities of the petitioner under the Courier Imports and Exports (Clearance) Regulations, 1998.3. Procedural compliance by the Customs Department before suspending the licence.4. Availability of alternate remedies for the petitioner against the suspension order.5. Impact of the suspension on the petitioner's business and consignees.Detailed Analysis:1. Legality of the Suspension Order:The petitioner challenged the order dated 14-3-2014 suspending its licence under the Courier Imports and Exports (Clearance) Regulations, 1998. The petitioner argued that the suspension was arbitrary, unjust, and unwarranted as no prior notice or opportunity was given before passing the order. The petitioner contended that the Regulations do not confer power on the respondent to suspend the courier registration without prior notice and an opportunity to be heard.2. Obligations and Responsibilities of the Petitioner:The petitioner, a licenced courier, was found to have received a consignment containing 7 kgs of gold bars valued at Rs. 2,14,27,000/-, which was not declared and was liable for confiscation under the Customs Act, 1962. The Customs officers opined that the petitioner failed to comply with Regulation 13(a), which mandates obtaining authorization from consignees and verifying their antecedents, IEC number, and address. The petitioner argued that it was merely a courier and could not be attributed with knowledge of the contents of the consignment.3. Procedural Compliance by the Customs Department:The petitioner argued that the suspension order was passed without prior notice and an opportunity to be heard, violating procedural fairness. The Customs Department, however, justified the suspension under Regulation 14(1), which allows for suspension pending enquiry if the grounds for revocation cannot be established without an enquiry. The Court noted that the impugned order was in exercise of the second proviso to Regulation 14(1), which permits suspension pending enquiry.4. Availability of Alternate Remedies:The petitioner contended that there was no statutory remedy against the suspension order and sought the Court's intervention. However, the Court disagreed, noting that the second part of the proviso to Regulation 14(1) provides a remedy for the aggrieved party to represent to the Chief Commissioner of Customs within sixty days. The Court held that this constituted an efficacious remedy against the suspension of the licence.5. Impact of the Suspension on the Petitioner's Business and Consignees:The petitioner argued that the suspension had brought its business to a standstill, affecting employees and consignees, including those awaiting delivery of essential items like medicines. The Customs Department expressed willingness to permit the petitioner to clear consignments received as of the date of suspension, as evidenced by a communication from the Joint Commissioner of Customs dated 19-3-2014.Conclusion:The Court rejected the writ petition, upholding the suspension order. However, it directed the Customs Department to permit the petitioner to clear pending consignments in compliance with the letter dated 19-3-2014. The Court emphasized that the petitioner had an alternate remedy to challenge the suspension before the Chief Commissioner of Customs.