2013 (12) TMI 37 - AT - Customs

Appellate Court Overturns Customs Agent License Suspension for Regulatory Violation

The appellate court set aside the Commissioner of Customs, Hyderabad's suspension order of the Customs House Agent (CHA) license due to failure to comply ... Suspension of license - Ex part order passed - Held that:- It is also not in dispute that a post-decisional hearing of the CHA was held on 24-10-2011 within the prescribed time. On that date, the learned Commissioner also took note of a representation filed by the CHA. However, no decision was taken in the matter. As per Regulation 20(3) of the CHALR, 2004, the Commissioner ought to have passed an order within 15 days from the date of post-decisional hearing - the Circular, by adding the clause “where it is possible to do so”, liberalised the sub-regulation with a departmental bias. The time limit of fifteen days has to be considered as mandatory as per Regulation 20(3). Therefore we hold that the non-passing of order by the learned Commissioner of Customs, Hyderabad within 15 days from the post-decisional hearing dated 24-10-2011 is in clear violation of the mandatory provision of Regulation 20(3) which, as rightly pointed out by the learned counsel, vitiated the ex parte suspension order passed by the Commissioner. From the report received from the respondent’s side today, it appears that it is not the case of the respondent that non-passing of the order was due to any omission or fault or mistake of the appellant - Decided in favour of Appellant. Issues:1. Suspension of Customs House Agent (CHA) license by Commissioner of Customs, Hyderabad.2. Violation of Regulation 20(3) of the Customs House Agents Licensing Regulations, 2004 (CHALR, 2004).3. Non-compliance with Board's Circular No. 9/2010-Cus.4. Failure to pass an order within the prescribed time frame after a post-decisional hearing.Detailed Analysis:1. The appeal was filed by a CHA challenging the suspension of their license by the Commissioner of Customs, Hyderabad. The suspension was based on an investigation report regarding an import made by a trading corporation in Mumbai. The Commissioner's order was passed ex parte, followed by a post-decisional hearing where no further action was taken. The appellant argued that the suspension order violated Regulation 20(3) of CHALR, 2004.2. After reviewing a report submitted by the department, it was revealed that no show cause notice (SCN) had been issued under the Customs Act, 1962, against the appellant CHA. Additionally, no proceedings had been initiated against the CHA as per Regulation 22 of CHALR, 2004, or under Regulation 20(3) of the same regulations. The appellant's counsel highlighted the violation of Regulation 20(3) and the failure to follow Board's Circular No. 9/2010-Cus, emphasizing the need for a timely decision after the post-decisional hearing.3. The judges noted that the Commissioner's failure to pass an order within 15 days from the post-decisional hearing was a clear violation of Regulation 20(3). They referenced the Circular's requirement for immediate suspension actions and post-decisional hearings within specific time frames. The judges emphasized the mandatory nature of the 15-day limit for passing an order after a hearing, stating that the non-compliance vitiated the ex parte suspension order.4. Consequently, the judges set aside the Commissioner's order, allowing the appeal. They clarified that their decision did not prevent lawful proceedings under Regulation 22 of CHALR, 2004. The judgment highlighted the importance of adhering to procedural regulations and time limits in matters of license suspension and disciplinary actions against CHAs.