Customs penalty can bar warehouse licensing where regulation separately covers persons penalised for an offence.

Regulation 3(2)(c) of the Private Warehousing Licensing Regulations, 2016 was interpreted independently of Regulation 3(2)(b), so the phrase "penalised for an offence" could not be confined to criminal conviction alone. Reading the licensing bar as a whole, the tribunal held that a penalty under Section 114A of the Customs Act, imposed for deliberate contravention with intent to evade duty, falls within Regulation 3(2)(c). As a result, such penalty disqualifies an applicant from a private warehouse licence and from permission for manufacture and other operations under Sections 58 and 65 of the Customs Act.

---

---

Issues: Whether penalty imposed under Section 114A of the Customs Act, 1962 amounts to being "penalised for an offence" under Regulation 3(2)(c) of the Private Warehousing Licensing Regulations, 2016, so as to disentitle the applicant from a private warehouse licence under Section 58 of the Customs Act, 1962 and the permission for manufacture and other operations under Section 65 of the Customs Act, 1962.

Analysis: The licensing bar in Regulation 3(2) was read as a whole. Regulation 3(2)(b) covers conviction for an offence under any law, while Regulation 3(2)(c) uses the distinct expression "penalised for an offence" under the Customs Act, the Central Excise Act, 1944, or Chapter V of the Finance Act, 1994. The phrase could not be confined only to offences triable in criminal proceedings under Chapter XVI of the Customs Act, because that construction would make Regulation 3(2)(c) redundant in light of Regulation 3(2)(b). The Court relied on the scheme of the Customs Act, the distinction between conviction and penalty, and the principle that no statutory provision should be rendered otiose. It also held that penalty under Section 114A, being imposed for deliberate contravention with intent to evade duty, falls within the scope of being penalised for an offence for the purpose of Regulation 3(2)(c).

Conclusion: Penalty under Section 114A of the Customs Act, 1962 does attract Regulation 3(2)(c) of the Private Warehousing Licensing Regulations, 2016, and the applicant was not entitled to the licence or the associated permission.

Final Conclusion: The appeals failed, and the rejection of the application for private warehouse licence and manufacture-related permission was sustained.

Ratio Decidendi: In a licensing regime, where one clause bars persons convicted of an offence and another bars persons penalised for an offence, the latter must be given an independent meaning and may include civil customs penalties imposed for contravention under the Customs Act, 1962.

---