2001 (4) TMI 100 - HC - Customs

Court upholds CONCOR monopoly, dismisses petition challenging public notice. Customs House Agent roles clarified.

The court dismissed the writ petition, finding the public notice valid and legal, within the Commissioner's authority. The alleged monopoly on CONCOR was ... Scope and obligations of a Customs House Agent (CHA) - power of the Commissioner to notify customs procedure and appoint custodians - custodian responsibility for movement of customs-sealed containers - judicial review of policy decisions - fundamental right under Article 19(1)(g) and non-entitlement to state contract or licence - no-arbitrary or discriminatory action under Article 14Scope and obligations of a Customs House Agent (CHA) - Whether the role and obligations of a CHA include a right or statutory entitlement to carry on transportation of export/import goods beyond the customs station - HELD THAT: - The Court analysed the Customs Act and the Customs House Agents Licensing Regulations, 1984, noting the statutory definition of CHA and the obligations enumerated in Regulation 14. Regulation 9(3)'s examination syllabus contains no transport-related questions and Regulation 10(2)(b)'s requirement of ability to provide warehousing and transport facilities is limited to the place of clearance of goods and to demonstrating financial soundness and facilities at that customs station. The Court accepted the reasoning in D. Sengupta that a clearing agent's agency normally ceases once goods are cleared from the customs station. The petitioner's reliance on having a multimodal transport licence was held to be irrelevant to obligations under the Customs Act and the Regulations. [Paras 10, 11, 12]The CHA's statutory role does not confer a right or entitlement to perform or insist on transportation of goods beyond the customs station; transport capability requirement under Regulation 10(2)(b) is limited to assisting at the place of clearance.Power of the Commissioner to notify customs procedure and appoint custodians - custodian responsibility for movement of customs-sealed containers - Whether the impugned Public Notice prescribing CONCOR as custodian responsible for movement of export containers from ICD, Reddipalem to gateway ports was beyond the Commissioner's powers or ultra vires - HELD THAT: - The Court examined the statutory scheme, the Board's Circulars and Ministry of Finance/DOR instructions (including Circulars dated 30-6-1995, 14-12-1995 and 4-8-1998). Those circulars set out guidelines for appointment of custodians, obligations to be undertaken by custodians (including security, bonding and responsibility for movement of goods) and specifically envisaged custodians moving goods by road or rail up to gateway ports. The Court held that the Commissioner's public notice prescribing procedure at the ICD and vesting custodial responsibility for movement of customs-sealed containers in the appointed custodian was in conformity with those instructions and within the authority under Section 45 framework and the delegated regulatory scheme. [Paras 13, 14, 15, 16]The public notice was intra vires; the Commissioner was within power to prescribe the procedure and to appoint a custodian responsible for transporting customs-sealed containers to gateway ports.Judicial review of policy decisions - fundamental right under Article 19(1)(g) and non-entitlement to state contract or licence - no-arbitrary or discriminatory action under Article 14 - Whether the impugned public notice unlawfully infringed the petitioner's Article 19(1)(g) rights or was arbitrary/discriminatory so as to merit interference with the administrative policy decision - HELD THAT: - The Court applied settled principles that policy decisions are ordinarily not interfered with unless capricious, arbitrary or violative of mandatory law. It held that Article 19(1)(g) does not confer a right to insist that the Government or its agencies contract or deal with a particular person; a licence or contractual opportunity does not create a fundamental right to insist on continuance of business with the authority. The record showed the appointment of CONCOR was pursuant to policy guidelines intended to protect exporters and revenue, and the Ministry's circulars permitted custodianship arrangements. Evidence of private-sector ICDs elsewhere and the availability of procedure for others to meet custodian criteria negated an impermissible discriminatory policy. [Paras 16, 17, 18, 19]The public notice did not infringe Article 19(1)(g) or Article 14; the policy decision to appoint CONCOR as custodian and vest movement responsibility was not shown to be arbitrary or unlawful.Maintainability of writ petition by an aggrieved person - Whether the petitioner was an aggrieved person entitled to maintain the writ petition challenging the public notice - HELD THAT: - Having considered the statutory role of CHAs, the nature of the impugned public notice and the policy basis for appointing a custodian, the Court concluded that the petitioner had not established any legal right or interest adversely affected by the notice. The petitioner's CHA licence and its multimodal transport licence did not confer a right to challenge the custodial appointment as an aggrieved person. [Paras 19]The petitioner is not an aggrieved person and the writ petition is not maintainable; alternatively, no case on merits warranted interference.Final Conclusion: The writ petition challenging Public Notice No. 9/2001-Customs is dismissed: the impugned notice was held intra vires and in conformity with Board/Ministry guidelines, the statutory role of a CHA does not entitle the petitioner to insist on carriage rights beyond the customs station, and the petitioner was not an aggrieved person entitled to maintain the petition. Issues Involved:1. Validity and legality of Public Notice No. 9/2001-Customs.2. Authority of the Commissioner to issue the public notice.3. Alleged monopoly conferred on CONCOR.4. Petitioner's right under Article 19(1)(g) of the Constitution.5. Role and obligations of a Customs House Agent (CHA).Issue-wise Detailed Analysis:1. Validity and Legality of Public Notice No. 9/2001-Customs:The petitioner challenged the public notice issued by the Commissioner of Central Excise and Customs, Guntur, arguing that it conferred a monopoly on CONCOR for the transportation of goods, thereby ousting the petitioner from the business. The court examined the public notice and found it to be in conformity with the Rules framed by the Board and the Circulars issued by the Ministry of Finance, particularly the Circulars dated 30-6-1995, 14-12-1995, and 4-8-1998. These circulars clearly established that the procedure prescribed under the impugned public notice was consistent with the instructions issued by the competent authority.2. Authority of the Commissioner to Issue the Public Notice:The petitioner contended that the Commissioner lacked the authority to issue the impugned public notice. However, the court held that the Commissioner was well within his powers to prescribe procedures to ensure compliance with the provisions of the Customs Act, the Rules, and the Regulations framed thereunder. The court emphasized that the Commissioner's actions were in line with the guidelines provided by the Ministry of Finance and the Central Board of Excise and Customs.3. Alleged Monopoly Conferred on CONCOR:The petitioner argued that the public notice created a monopoly in favor of CONCOR, violating the petitioner's right to carry on trade or business. The court found no merit in this contention, stating that the impugned action was a measure to protect the revenue of the Government of India and in the public interest. The court referenced several judgments, including those from the Supreme Court, to support the view that there is no fundamental right to insist upon the Government or governmental authorities to do business with any particular individual or entity. The court also noted that similar facilities could be created in Guntur if the petitioner fulfilled the requirements.4. Petitioner's Right under Article 19(1)(g) of the Constitution:The petitioner claimed that the public notice violated their right under Article 19(1)(g) of the Constitution to carry on any trade or business of their choice. The court rejected this argument, stating that the right guaranteed by Article 19(1)(g) does not extend to insisting that the Government or governmental authorities must do business with the petitioner. The court reiterated that the policy decision to confer monopoly on CONCOR was neither capricious, arbitrary, nor whimsical, and thus did not violate the postulates of Article 14 of the Constitution.5. Role and Obligations of a Customs House Agent (CHA):The petitioner contended that transportation of goods was a major activity of any CHA and that the Customs House Agents Licensing Rules, 1984, recognized this role. The court disagreed, clarifying that the role of a CHA is limited to the obligations laid down in Regulation 14, which do not include transportation of goods. The court referred to the definition of a CHA and various regulations to conclude that the CHA's responsibilities are confined to the customs station and the clearance of goods. The court also cited the judgment of the Calcutta High Court in D. Sengupta v. Collector of Customs, which supported the view that the CHA's role ceases once the goods are cleared from the customs station.Conclusion:The court dismissed the writ petition, holding that the petitioner company could not be considered an aggrieved person and that the petitioner had not made out any case on merits warranting the court's interference. The public notice was found to be valid, legal, and within the authority of the Commissioner, and the alleged monopoly conferred on CONCOR was justified as a policy decision in the public interest.