2017 (7) TMI 151 - AT - Customs

Tribunal Upholds Forfeiture of Security Deposit for Customs Violation

The Tribunal upheld the forfeiture of a security deposit imposed on a customs house agent for facilitating the clearance of illegally imported goods. It ... Power of Committee of Chief Commissioners to review orders of Commissioner of Customs - prevail of specific power over general power - Clearance of ‘unaccompanied baggage’ - two wooden crates of goods - baggage rules - regulation no.22(8) of Custom House Agents Licensing Regulations, 2004 - Held that: - Tribunal has, while disposing of the dispute in Commissioner of Customs (General), Mumbai v. Mukadam Freight Systems Pvt Ltd [2017 (5) TMI 798 - CESTAT MUMBAI], held that the licensing authority is not vested with the privilege of filing an appeal against its own order and that the Committee of Chief Commissioners is not vested with the power to review orders issued in exercise of powers under the Custom House Agents Licensing Regulations, 2004/Customs Brokers Licensing Regulations, 2007. The institution of ‘custom house agents’ is a characteristic of the customs regulatory mechanism; at the same time, it is not unique to this country but is universally recognised as a facilitation catalyst for clearance of cargo. The geographical distance between the entry/exit hubs and the location of the importer/exporter, as well the complexities of procedures, warrants professional representation that may not be available in-house. Consequently, in a statute that is essentially concerned with the power to levy tax, with procedure for recovery of tax and with enumeration of offences and penalties, special provision have been enacted to accord legal status, and thereby to exercise statutory control on certain institution. It is inconceivable that the licensing authority is so base as to forfeit the high reputation of the organisation that is presided over warranting intervention by another authority howsoever eminent. It, therefore, does not behove upon a collegial body/individual, not acknowledged in the Regulations, to take upon itself the mantle of supervision and thus insinuate itself into a process not contemplated either in section 146 of Customs Act, 1962 or by the Regulations framed thereunder. For us to permit recourse to the general provision in section 129D of Customs Act, 1962 merely because of the absence of such a remedy in the Regulations and for convenience of some executive authority would be tantamount to proclaiming that our perspicacity is superior to that of the sovereign legislative organ - an overreach that we will not even deign to consider. A licensing system, concerned with the functioning of a facilitation mechanism is, not to be equated with the power to collect tax - the provisions of section 129E is not intended to apply to the appellant-Commissioner. Appeal dismissed - decided against appellant. Issues Involved:1. Legality and propriety of the forfeiture of the security deposit.2. Whether the failure to revoke the customs house agent license was legal, correct, and proper.3. The authority of the Committee of Chief Commissioners to review orders under the Customs House Agents Licensing Regulations, 2004.4. The applicability of general provisions of the Customs Act, 1962 to the specific regulatory framework for customs house agents.Detailed Analysis:1. Legality and Propriety of the Forfeiture of the Security Deposit:The customs house agent, M/s MD Sadrani, was penalized with the forfeiture of a security deposit of Rs. 10,000/- for failing to act in accordance with its obligations under the Customs House Agents Licensing Regulations, 2004. This penalty was imposed after an inquiry found that two employees of the agent had facilitated the clearance of illegally imported goods. The Tribunal found no reason to interfere with the penalty imposed, as the role of the employees in the clearance of ineligible goods was sufficiently established.2. Whether the Failure to Revoke the License was Legal, Correct, and Proper:The Committee of Chief Commissioners directed the Commissioner of Customs (General), Mumbai-I to appeal the decision of not revoking the agent's license. The Tribunal noted that the proceedings concluded in June 2006, and the agent had continued to operate since then. Imposing the extreme penalty of license revocation after seventeen years would be inconsistent with the principle of prompt punishment for transgressions. The Tribunal dismissed the appeal, considering it an exercise in futility due to the lack of chronological proximity between the incident and the proposed revocation.3. Authority of the Committee of Chief Commissioners to Review Orders:The Tribunal reiterated its previous decision in Commissioner of Customs (General), Mumbai v. Mukadam Freight Systems Pvt Ltd, stating that the licensing authority is not vested with the privilege of filing an appeal against its own order. The Committee of Chief Commissioners does not have the power to review orders issued under the Customs House Agents Licensing Regulations, 2004/Customs Brokers Licensing Regulations, 2007. The Tribunal emphasized that no provision exists in the Regulations for an appeal by the other side, and the challenge was outside the ambit of the Regulations.4. Applicability of General Provisions of the Customs Act, 1962:The Tribunal addressed the question of whether the general mandate of the Customs Act, 1962 could be resorted to in the absence of a special provision. It concluded that the deliberate exclusion of an appellate remedy in the specific provision should erase the scope for recourse to the general provision. The Tribunal cited the Supreme Court's decision in Jagir Singh v. Ranbir Singh & Another, which held that what may not be done directly cannot be allowed to be done indirectly. The Tribunal emphasized that the power to terminate a license lies solely with the Commissioner of Customs, and no other authority can usurp this prerogative.Conclusion:The Tribunal dismissed both the appeal of the agent and the appeal of the licensing-Commissioner against its own order of imposition of penalty. The decision highlighted the importance of adhering to the specific regulatory framework for customs house agents and the limitations on the authority to review and appeal decisions within that framework.