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of <h1>Only Parent Commissionerate Can Suspend Customs Broker Licences; Non-Parent May Impose One-Month Prohibition Under Regulation 15, Not Regulation 16</h1> <h3>M/s. Sasha Shipping Pvt. Ltd. Versus The Commissioner of Customs, Tuticorin</h3> Madras HC held that only the Parent Commissionerate (license-granting authority) may suspend a Customs Broker license; a Non-Parent Commissioner may ... Jurisdiction - power of Parent Commissionerate to suspend Customs Broker License - commission of irregularity in the matter of import of certain consignments - HELD THAT:- Section 146 of the Customs Act, 1962, mandates that no person shall carry on business as a Customs Broker unless he holds a license granted in accordance with the Regulations. Pursuant to the regulation making power under Section 146(2) of the Act, the Customs Brokers Licensing Regulations, 2018 were made. It was issued in supersession of the 2013 Regulations. Earlier Customs House Agents Licensing Regulations, 2004 was in operation. The power to suspend lies only with the Parent Commissionerate. It is not as if the Central Board of Indirect Taxes and Customs was unaware of the situations projected by the Standing counsel. If the licensee fails to fulfill the obligations expected of him, and such lapses occur within the jurisdiction of a Non-Parent Commissionerate, the Principal Commissioner or Commissioner concerned has the power to prohibit the erring licensee from working in one or more sections of that Customs Station. But the prohibitory order will not be in force beyond one month from the date of such prohibition - Regulation 15 as already mentioned, empowers the Principal Commissioner or Commissioner of Customs(Non-Parent Commissioners) to prohibit the licensee from working in one or more sections of the Customs Station. License is issued by the Parent Commissionerate in Form B1 or Form B2. It is signed by the Principal Commissioner of Customs / Commissioner of Customs. The license granting authority authorises the licensee to transact business as Customs Broker all over India subject to conditions. Form C is a mere intimation. The licensee is not operating his business with the leave of the Non-Parent Commissioner. When the Non-Parent Commissioner has not issued the license, he obviously cannot suspend the same. The Regulations have taken care to deal with the situation when the Non-Parent Commissioner comes across any actionable lapse on the part of the licensee under Regulation 15. Regulation 21 of the 2004 Regulations is in pari materia with Regulation 15 of the current Regulations. The authorities are continuing to rely on the aforesaid circular till date. That apart, Section 24 of the General Clauses Act provides for continuation of orders, schemes, rules, forms, bye laws issued under repealed enactments provided there is no inconsistency with the repealing regime and till they are superseded formally - The same principle can be applied in the present case also. The circular issued when 2004 Regulations were holding the field is not in any way inconsistent with the current regime. It has also not been superseded or withdrawn. Therefore, the aforesaid circular issued by the Board is applicable to the case on hand. Viewed in that light, it has to be held that the Commissioner of Customs, Tuticorin who is not the license granting authority cannot pass an order of suspension. When the Regulations speak of prohibition and suspension, and the impugned order is an order of suspension traceable to Regulation 16, it has to necessarily hold that the respondent who is a Non-Parent Commissioner cannot exercise the power under Regulation 16 which is available only to a Parent Commissioner. The orders impugned in the writ petitions are set aside as bereft of jurisdiction - Petition allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether a Principal Commissioner or Commissioner of Customs, other than the authority that granted a Customs Broker License (hereinafter 'Non-Parent Commissioner'), has power under Regulation 16 of the Customs Brokers Licensing Regulations, 2018 to suspend a Customs Broker License issued by the Parent Commissionerate. 2. Whether a prohibitory order under Regulation 15 issued by a Non-Parent Commissioner can have extraterritorial effect beyond the Customs House/Customs Station where the lapse is observed, and how Regulations 15, 16 and 17 must be read together in relation to Form C intimation. 3. Whether administrative guidance in the form of an earlier Board circular issued under antecedent regulations (regarding suspension/revocation of license of CHAs operating on Form C intimation basis) remains applicable to the 2018 Regulations and can be relied upon to interpret the scope of powers of Parent and Non-Parent Commissioners. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Power to suspend: Whether Regulation 16 permits a Non-Parent Commissioner to suspend a Customs Broker License issued by another Commissionerate Legal framework: Section 146 Customs Act, 1962 empowers licensing by regulations. Regulations 7, 15, 16 and 17 of the Customs Brokers Licensing Regulations, 2018 govern grant, prohibition, suspension and revocation of license. Regulation 7 contemplates Form C intimation enabling a licensee to transact business at other Customs Stations. Regulation 15 grants prohibition powers to Principal Commissioner/Commissioner 'other than those referred to in Regulation 7' (i.e., Non-Parent Commissioners). Regulation 16 provides power of suspension to the 'Principal Commissioner or Commissioner of Customs' without the express restrictive clause present in Regulation 15, and Regulation 17 prescribes post-suspension procedure. Precedent Treatment: Administrative Board Circular (No.9/2010-CUS dated 08.04.2010), issued under prior CHALR regime, treats suspension action as ordinarily within the competence of the Commissioner who issued the license (Parent Commissionerate), while permitting station-level prohibitory action by the Commissioner where the violation is noticed and requiring communication to the Parent Commissioner for further action. Interpretation and reasoning: A textual and contextual construction of Regulations shows a clear statutory scheme distinguishing Parent and Non-Parent Commissioners. Regulation 15 expressly limits substantive suspension-type power to the Parent Commissioner by providing a mechanism of prohibition (limited to one month) to the Non-Parent Commissioner and mandating communication to the Parent Commissioner for further action. The licence itself is issued by the Parent Commissionerate (Form B1/B2) and authorises operation subject to conditions; Form C is a mere intimation. Section 21 of the General Clauses Act (power to add/amend/vary/rescind) supports that the authority which issued the license retains powers to suspend or rescind it. Reading Regulations 15, 16 and 17 together produces a coherent scheme where immediate, limited prohibitory measures may be taken by Non-Parent Commissioners but formal suspension of the license under Regulation 16 is the preserve of the Parent Commissioner. Ratio vs. Obiter: Ratio - Regulation 16 suspension power is available only to the Parent Commissioner (the authority that issued the licence). Obiter - Analogical illustrations (e.g., comparison to debarment of advocates) used by respondent's counsel are persuasive policy arguments but not determinative of statutory construction. Conclusion: The power to suspend a Customs Broker License under Regulation 16 lies with the Parent Commissionerate (the licence-granting authority); a Non-Parent Commissioner cannot validly exercise Regulation 16 to suspend a license issued by another Commissionerate. Issue 2 - Territorial effect of prohibition under Regulation 15 and the interplay of Regulations 15-17 with Form C intimation Legal framework: Regulation 15 authorises prohibition by the Principal Commissioner or Commissioner of Customs other than those referred to in Regulation 7 (Non-Parent Commissioners) from working in one or more sections of the Customs Station, with provisos limiting the period of prohibition to not exceed one month and linking to Regulation 16 where suspension results. Regulation 7(3)-(4) establishes Form C intimation and conditions for operating at other Customs Stations. Precedent Treatment: The Board circular interprets analogous earlier provisions as permitting local prohibitory action by the station where violation was noticed and calling for communication to the Parent Commissioner for commencement of suspension or revocation proceedings. Interpretation and reasoning: The statutory language connotes that a Customs Station contains multiple 'sections' and that Regulation 15 permits the Non-Parent Commissioner to prohibit work in one or more sections of that Customs Station. The first proviso limiting the prohibitory order to one month cannot be construed to enlarge the scope of the main provision to permit extra-territorial prohibition beyond the issuing Customs House; a proviso cannot override the main clause. The composite reading of Regulations 15-17 indicates an intended mechanism: Non-Parent Commissioners may take immediate, short-term prohibitory measures locally (to meet exigencies), but sustained sanctions like suspension or revocation are to be effected by the Parent Commissioner following the procedure in Regulation 17. Form C is an intimation; it does not vest the Non-Parent Commissioner with licence-granting authority or the power to suspend a licence issued elsewhere. Ratio vs. Obiter: Ratio - Prohibitory orders under Regulation 15 by Non-Parent Commissioners are confined to the Customs Station/sections where the Non-Parent Commissioner exercises jurisdiction and cannot lawfully extend beyond that Customs House; sustained suspension/removal requires Parent Commissioner action under Regulation 16/17. Obiter - The Court's observation that the word 'sections' might be a typographical omission in a proviso is an interpretive remark ancillary to the primary ratio. Conclusion: A Non-Parent Commissioner's prohibitory order under Regulation 15 is territorial to the Customs House/sections where the breach occurred and cannot validly have extraterritorial effect; longer-term suspension must be undertaken by the Parent Commissioner following prescribed procedure. Issue 3 - Continued applicability of earlier Board circular and interplay with repealing regime Legal framework: Pre-existing Board Circular issued under CHALR 2004 (and CHALR 1984) addressed suspension/revocation of CHAs operating on Form C intimation basis. Section 24 of the General Clauses Act permits continuation of orders, schemes, rules and forms made under repealed enactments unless inconsistent with the new regime and until formally superseded. Precedent Treatment: The Board circular explicitly provided that suspension action should be taken by the Commissioner who issued the license and that the Commissioner at the station where violation was noticed should inform the Parent Commissioner to initiate suspension/revocation. The circular also allowed the local Commissioner to take immediate prohibitory action in deserving cases. Interpretation and reasoning: The current 2018 Regulations are in pari materia with prior provisions (Regulation 21 of 2004 Regulations and Regulation 15 of 2018 perform analogous functions). The circular is not inconsistent with the 2018 Regulations, has not been withdrawn or superseded, and continues to reflect the administrative understanding of the statutory scheme. Therefore, it is a relevant and persuasive interpretive aid that corroborates the textual construction that suspension is primarily the Parent Commissioner's domain while local prohibitory measures are available to Non-Parent Commissioners. Ratio vs. Obiter: Ratio - The Board circular issued under the prior regime is applicable insofar as it is consistent with the 2018 Regulations and supports the conclusion that suspension must be undertaken by the licence-granting authority. Obiter - Reliance on historical administrative practice is supportive but the dispositive ground remains statutory construction. Conclusion: The earlier Board circular continues to be applicable and supports the division of responsibilities between Parent and Non-Parent Commissioners; it reinforces that the Non-Parent Commissioner cannot suspend a licence issued by another Commissionerate. Final Disposition (as derived from issues above) The Court concludes that the impugned suspension(s) issued by a Non-Parent Commissioner under Regulation 16 are beyond jurisdiction; the statutory scheme confines suspension of a Customs Broker License to the Parent Commissioner (the licence-issuing authority), with Regulation 15 permitting only limited, temporary prohibition by Non-Parent Commissioners confined to their Customs Station/sections and requiring communication to the Parent Commissioner for further action. The impugned orders of suspension are therefore set aside as bereft of jurisdiction.
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