2014 (11) TMI 695 - AT - Customs

Customs House Agent license suspension overturned due to procedural flaws under CHALR, 2004

Eltece Associates Versus Commissioner of Customs (Port-Import) Chennai

The Tribunal set aside the suspension of the Customs House Agent (CHA) license, ruling that the procedural requirements under CHALR, 2004 were not met. ... Suspension of license of the CHA - Regulation 20 (2) of CHALR 2004 - Non issuance of SCN - Held that:- offence report was filed on 18.10.2012. After the receipt of the offence report, the only course to be adopted by the first respondent is to issue a show cause notice within 90 days to the petitioner. Unfortunately in the present case, although 41 days had lapsed till the filing of the writ petition, the first respondent has not come forward to issue the show case notice to comply with the mandatory conditions adumbrated under Regulation 22(1) of the Regulations. Therefore, in the present case, as rightly indicated by the learned counsel for the petitioner with the help of the precedent order passed by High Court, where this Court was inclined to quash a similar proceeding finding fault with the respondent that there was a delay of seven days in issuing the show cause notice, this Court has no hesitation to interfere with the impugned proceedings, for the simple reason that in this case, there was no show cause notice issued till now - Decided in favour of appellant. Issues Involved:1. Whether the suspension of the Customs House Agent (CHA) license under Regulation 20 (2) and its continuation under Regulation 20 (3) of CHALR, 2004 was justified.2. Whether the suspension order could be treated as a show cause notice under Regulation 22 (1) of CHALR, 2004.3. Compliance with the procedural requirements under CHALR, 2004, specifically regarding the issuance of a show cause notice within the stipulated time frame.Detailed Analysis:1. Justification of Suspension under Regulation 20 (2) and Continuation under Regulation 20 (3):The appellant, a holder of a Regular Custom House Agents License, had their license suspended by the Commissioner of Customs (Imports), Chennai, initially under Regulation 20 (2) on 21.1.2013 and subsequently continued under Regulation 20 (3) on 15.2.2013. The suspension was based on allegations that the appellant misdeclared goods to evade anti-dumping duty and failed to verify the antecedents and credentials of the importers. The appellant contended that the suspension was issued beyond the 15-day period from the receipt of the offence report and that the allegations were of a technical nature.2. Suspension Order as Show Cause Notice:The appellant argued that no show cause notice was issued as required under Regulation 22 (1) and that the suspension order could not be treated as a show cause notice. The Enquiry Officer later informed the appellant that the suspension order would be treated as a show cause notice, which the appellant claimed was a violation of Regulation 22. The Tribunal referenced the case of Manjunatha Shipping Services, which established that a show cause notice must be issued to commence an enquiry under Regulation 22 (1), separate from the investigative process.3. Compliance with Procedural Requirements:The Tribunal noted that Regulation 22 (1) mandates the issuance of a show cause notice within 90 days from the date of receipt of the offence report. In this case, the show cause notice was not issued within the required timeframe, and the Enquiry Officer's letter treating the suspension order as a show cause notice was contrary to the provisions of Regulation 22 (1). The Tribunal cited the decision of the Hon'ble Madras High Court in the case of Shri R. Sandosh Kumar, which emphasized the necessity of issuing a show cause notice within the stipulated period.Conclusion:The Tribunal found that the procedural requirements under CHALR, 2004, were not followed, specifically the failure to issue a show cause notice within the stipulated 90 days. Consequently, the suspension orders were set aside, and the appeals were allowed. The Tribunal clarified that this decision would not prejudice any future enquiry by the Department.