2017 (10) TMI 1505 - HC - Customs

Court suspends customs broker without required enquiry, stays order pending show cause notice adjudication.

M/s. Sea Queen Shipping Services Pvt. Ltd. Versus The Commissioner of Customs, Chennai

The High Court found that the suspension order of a licensed customs broker lacked a necessary enquiry under the Customs Broker Licence Regulation. ... Suspension of CHA License - SCN pending adjudication before the Customs Authority - Regulation 19 (1) of CBLR - HELD THAT:- The respondent has invoked Regulation 19(1). This Regulation commences with a non-obstante clause and states that, notwithstanding anyting contained in Regulation 18, the Commissioner Customs may, in appropriate cases, where, immediate action is necessary, suspend the licence of a customs broker, where, an enquiry against such agent is pending or contemplated. Thus, to invoke the power under Regulation 19(1), the Commissioner of Customs should be satisfied that, immediate action is necessary to suspend the customs broker licence, and such powerr is exercisable, where, an enquiry against the Agent (petitioner in this case) is pending or contemplated. The enquiry should be conducted under the provisions of CBLR, and the respondent cannot fallback upon the show cause notice, which has been issued to the petitioner, under the Customs Act. This is more so, because, the licence has been granted, in terms of CBLR, and enquiry ought to have been commenced against the customs broker, for violation of the licence conditions, and for such other matters, as provided under the Regulations, and in particular, Regulation 18 - On a reading of the impugned order of suspension, it is seen that there is no enquiry, either pending, or contemplated against the petitioner, under the CBLR. Therefore, the power under Regulation 19 (1) of the CBLR could not have been invoked. Furthermore, there was no necessity to suspend the petitioner’s customs broker licence, as the consignment was detained on 01.04.2016. The importer had requested the petitioner to amend the Bill of Entry, by adding invoice No.YF2-2016, dated 15.03.2016, and changing the description of the goods, quantity and value, as per the second invoice, and such a request was made on 04.04.2016. There is no immediate necessity for suspending the licence issued to the petitioner - in the absence of contemplation of enquiry, or pending enquiry, suspension order cannot be passed by invoking the power vested with the Commissioner under Regulation 19(1) of CBLR. The order of suspension shall remain stayed till the adjudication of the show cause notice issued under the Regulation 20 (1) of the CBLR - By virtue of this order, the petitioner would be entitled to carry on their activities as a licensed customs broker. Issues:Challenge to order of suspension under Regulation 19 of Customs Broker Licence Regulation, 2013 (CBLR) in W.P.No.20994 of 2017. Challenge to show cause notice dated 06.09.2017 under Regulation 20(1) of CBLR in W.P.No.26820 of 2017.Analysis:In W.P.No.20994 of 2017, the petitioner contested the suspension order under Regulation 19 of CBLR. The petitioner, a licensed customs broker, was involved in importing goods from China. A show cause notice was issued proposing confiscation and penalties. The petitioner replied, and the suspension order was passed pending adjudication. The High Court examined the legality of the suspension under Regulation 19(1) of CBLR, emphasizing the need for an enquiry under CBLR for license suspension.The Court noted that the suspension lacked an ongoing or contemplated enquiry under CBLR. Referring to a previous judgment, the Court highlighted the necessity of an enquiry before suspension. The judgment emphasized that immediate suspension wasn't warranted when the consignment was detained earlier. The Court cited a case where suspension was deemed improper without a pending enquiry, applying the same reasoning to the present case.Consequently, the Court stayed the suspension order until adjudication of the show cause notice under Regulation 20(1) of CBLR. The petitioner was permitted to continue as a licensed customs broker. The Court allowed withdrawal of the challenge to the show cause notice in W.P.No.26820 of 2017. W.P.No.20994 of 2017 was disposed of, and W.P.No.26820 of 2017 was dismissed as withdrawn. No costs were awarded, and related petitions were closed, concluding the matter.