2022 (2) TMI 155 - HC - Customs

Custom Broker's License Suspension Order Invalidated for Procedural Non-Compliance

The Court held that the suspension order issued under the Custom Broker Licensing Regulation, 2013 had expired due to non-compliance with the prescribed ... Suspension of Custom Broker License - forging the signature and fabricating the documents by misusing the license of the petitioner - alleged infraction of Custom Broker Licensing Regulation, 2013 - HELD THAT:- If the respondent Customs Department wanted to revoke the license, the respondent ought to have issued notice under Regulation 20 of the aforesaid Regulations - Since the impugned suspension order dated 15.06.2018 has not culminated in the order either revoking the order of suspension or continuing with the order of suspension followed by a proceeding under Regulation 20 of the aforesaid Regulations which has been extracted, it is deemed fit to hold that the suspension order has outlived its period of validity. The impugned suspension order is no longer in force. At the same time, liberty is given to the respondent to examine whether, on merits, the proceedings can be initiated under Regulation 20 of the aforesaid Regulations, in accordance with the well settled principles of law which has been repeatedly followed by this Court including the case of SANTON SHIPPING SERVICES VERSUS THE COMMISSIONER OF CUSTOMS, THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL [2017 (10) TMI 621 - MADRAS HIGH COURT]. Petition disposed off. Issues:Challenge to suspension order under Custom Broker Licensing Regulation, 2013 for alleged infractions, failure to follow prescribed procedures for suspension continuation, and the necessity of revoking or continuing suspension.Analysis:The petitioner challenged the suspension order dated 15.06.2018, alleging infractions of the Custom Broker Licensing Regulation, 2013 due to certain Bill of Entries filed for an importer. The petitioner claimed that employees colluded to file entries by misusing the petitioner's license, leading to a complaint being lodged. The suspension order was contested on the grounds of non-compliance with the scheme of the Regulations in force during the relevant period.The petitioner argued that the suspension order could not continue as per Regulation 19, which mandates a hearing and a subsequent order within 15 days. Despite a hearing on 28.06.2018, no orders were issued, and the prescribed procedure for revoking the license or imposing penalties was not followed, resulting in the license lapsing for no fault of the petitioner.Citing precedents like East West Freight Carriers (P) Ltd., the petitioner emphasized the necessity of immediate action for suspension and the requirement for the Collector to apply their mind before suspending a license. The petitioner also referred to other decisions to support their case against the suspension continuation at a belated stage.In response, the Senior Panel Counsel for the respondents argued that a show cause notice had been issued to the petitioner, indicating ongoing proceedings that might impact the suspension order's revocation. The Court considered arguments from both parties and highlighted the requirement for the respondent to make a decision regarding the suspension continuation or dropping the proceedings under Regulation 19(2) of the Regulations.The Court noted that the petitioner had been issued a show cause notice under the Customs Act, 1962, for alleged violations, but the respondent failed to follow the prescribed procedure under Regulation 20 for revoking the license. Consequently, the Court held that the suspension order had outlived its validity period and was no longer in force, granting liberty to the respondent to initiate proceedings under Regulation 20 if deemed necessary.The judgment concluded by disposing of the Writ Petition with observations on the suspension order's status, emphasizing that the order did not prejudice the ongoing proceedings initiated against the petitioner and others involved in the import that led to the suspension of the license.