2016 (10) TMI 643 - HC - Customs

Court quashes license rejection, citing double jeopardy, orders fresh review.

M/s. D. Thimmeswara Rao, M/s. Setwin Shipping Agency Versus The Commissioner of Customs

The court quashed the rejection of Customs Broker License renewal applications, emphasizing that unsubstantiated allegations from previous suspension ... Renewal of Customs Broker Licence under Regulation 7(1) of the Customs Broker Licence Regulation 2013 - the order of suspension and continuation of suspension were set aside by the Tribunal, and affirmed by the Hon'ble Division Bench and for the same set of reasons, the petitioners' applications for renewal of customs broker licence was rejected - whether the petitioners can be penalised twice for the same reason? - Held that: - The respondents had complied with the procedure under Regulation 22(1) and placed the petitioners' licences under suspension with immediate effect. When these orders of immediate suspension was put to challenge by filing Writ Petitions, the Court directed the respondent to follow the procedure under Regulation 22(2). This was not followed resultantly the orders of continuation of suspension dated 23.05.2012 were quashed by the CESTAT. Thus, the allegations, which were the basis for suspending the licence continuous to remain as an allegation and has not been substantiated by the Department by conducting an enquiry as required to be done under the Regulations by following the procedure contemplated under Regulation 22(2) to 22(7). The CESTAT, rightly set aside the order of suspension and such orders were confirmed by the Hon'ble Division Bench of this Court. Therefore, it would be wholly untenable on the part of the respondent to state that they will once again rely on the unsubstantiated allegations for refusing to renew the petitioner's licence. No person can be vexed twice on the same set of facts, which remain unsubstantiated. Therefore, on the allegations set out in the impugned order, the petitioners' applications for renewal of licence could not have been rejected. However, it is a different matter, if there are any other allegations duly substantiated, then the authority while considering the applications for renewal can exercise jurisdiction and while doing so, should strictly adhere to the procedure under CBLR. Petition allowed - matter remanded to the respondent for fresh consideration with a direction to consider the petitioners' applications for renewal of customs broker licence - decided in favor of petitioner. Issues:Challenge to rejection of Customs Broker License renewal under CBLR.Detailed Analysis:1. The petitioners challenged the rejection of their applications for renewal of Customs Broker License under Regulation 7(1) of the Customs Broker License Regulation 2013 (CBLR).2. The factual aspects of both petitions were similar, and after previous litigation, the petitions were heard together.3. The petitioners' licenses were initially suspended under the Customs House Agents Licensing Regulation, 2004 (CHALR), and subsequent legal proceedings led to the suspension orders being set aside.4. The respondents argued that the suspension proceedings should not impact the renewal applications, as the suspension was set aside on procedural grounds.5. The CESTAT and the High Court had previously set aside the suspension orders due to procedural lapses in issuing notices under Regulation 22(2) of CHALR.6. The CESTAT highlighted the necessity of following the prescribed procedure for suspension or revocation of licenses under Regulation 20 and Regulation 22.7. The CESTAT's decisions were upheld by the High Court, emphasizing that the allegations leading to suspension were not substantiated through a proper inquiry.8. The court ruled that the respondents could not rely on unsubstantiated allegations from the previous suspension orders to reject the renewal applications.9. The court emphasized that no person should be penalized twice for the same unsubstantiated allegations and directed the respondent to reconsider the renewal applications without reference to those allegations.10. The court allowed the writ petitions, quashed the impugned orders, and remanded the matter to the respondent for fresh consideration within eight weeks, adhering strictly to the CBLR provisions.This detailed analysis of the judgment highlights the legal issues, previous litigation history, procedural lapses, and the court's decision to quash the rejection of license renewal applications based on unsubstantiated allegations.