TaxTMI 
TaxTMI 
2014 (7) TMI 671
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....ppeal is filed. 3. The second respondent is a licenced Customs House Agent(CHA), which is valid up to 29.03.2014 issued under the provisions of the above said Regulations and such Regulations came to be framed in terms of Section 146 of the Customs Act, 1962. Investigation was initiated against one M/s.Ravi Enterprises, Surat, State of Gujarat on the allegation that they are indulging in misuse of Advance Authorization Scheme in violation of the provisions of Export and Import Policy and the conditions of the notification dated 11.09.2009. Since the investigation revealed that the imports of yarn made by the said firm duty free under the above said Scheme was diverted to some high seas sellers who were said to have sold the goods on High Seas Sale basis, show cause notice was issued to the said firm on 14.03.2011, demanding a duty of Rs. 3.30 Crores, proposing confiscation of seized goods and penalty on the firm/persons concerned. The investigation also revealed that the role played by the second respondent in aiding and abetting M/s.Ravi Enterprises to commit the said acts of violation and misconduct. 4. The Directorate of Revenue Intelligence (DRI), has also proposed for re....
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....second respondent without prejudice to any other action taken against them under the provisions of the Customs Act, 1962, rules and regulations made thereunder or any other law for the time being in force. 7. The second respondent, aggrieved by the same, filed an appeal before the CESTAT and the CESTAT found that immediate suspension of licence is permitted only when an enquiry is pending or contemplated and the non-obstante clause of Regulation 20(2) makes an exception only in the matter of suspension and not in the matter of revocation and hence, it is implied that such enquiry has to be completed within the time frame prescribed in various sub-regulations of Regulation 22 and a final view in the matter of revocation of license is to be taken. The Tribunal further found that even after two years from the date of suspension not even the show cause notice is issued for initiation of enquiry, which should have been followed in the case of an enquiry pending or contemplated on passing of the order of suspension dated 02.09.2011 and such an approach is against the provisions contained in Regulations 20 and 22 of CHLAR, 2004 and citing the said reasons, has set aside the impugned or....
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....High Court in W.P.No.16180 of 2011, directing the Department to issue a notice again to the (petitioner) the 2nd respondent herein fixing the date of personal hearing and on that date, the petitioner is liberty to raise all the points before the authority concerned and after such personal hearing, the respondent-Commissioner of Customs, Madras can pass orders within a period of two weeks and the department be complied with direction? c) Whether the Hon'ble CESTAT is right in setting aside the Order in Original dated 02.09.2011 passed by the Commissioner of Customs when the order of the Hon'ble High Court in W.P.No.16180/2011 was passed after following the reported judgment in 2003 (8) SCC 498. C.M.A.Nos.1423 to 1426 of 2014 9. C.M.A.No.1423/2014 pertains to M/s.D.Thimmeswara Rao, represented by its Proprietrix C.Subbulakshmi, C.M.A.No.1424/2014 pertains to M/s.Setwin Shipping Agency, represented by its Proprietor Mr.Chandrasekara Raju, C.M.A.No.1425/2014 pertains to M/s.N.Taylor, represented by its Proprietrix Mrs.Nicola Taylor and C.M.A.No.1426/2014 pertains to M/s.Lotus International Services, represented by its Proprietor Shri.T.S.Kamalakannan and all of them ar....
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...., 2004 are not justified and therefore, the orders were set aside with an observation that the order allowing the appeal would not affect the enquiry proceeding, if any, as provided under the law. 12. The official respondents in the above said appeals/Revenue, aggrieved by the same, had filed C.M.A.Nos.1423 to 1426/2014 and raised the very same substantial questions of law as that of C.M.A.No.1422 of 2014. 13.Mr.K.Mohanamurali, learned counsel appearing for the appellant/Revenue would vehemently contend that in C.M.A.No.1422/2014, the order of suspension came to be passed based on the enquiry report under Regulation 20(2) of CHALR, 2004 and after giving them opportunity of personal hearing, order came to be passed for continuation of the order of suspension and similarly in C.M.A.Nos.1423 to 1426/2014 also, after placing the respondents therein under suspension, final orders came to be passed under Regulation 20(3) of CHALR, 2004 for continuing the order of suspension and the said orders came to be passed after due and proper application of mind to the materials placed before it and therefore, the reasons assigned by the CESTAT that no notice has been issued under Regulation ....
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.... submissions and also perused the materials available on record. 16. It is relevant to extract Regulations 20 and 22 of Customs House Agents Licencing Regulations, 2004 as under: 20. Suspension or revocation of licence. (1) The Commissioner of Customs may, subject to the provisions of regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely : (a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under regulation 10; (b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else; (c) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or any where else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station. (2) Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary,....
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....titled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording his findings and submit his report within ninety days from the date of issue of a notice under sub-regulation (1). (6) The Commissioner of Customs shall furnish to the Customs House Agent a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and shall require the Customs House Agent to submit, within the specified period not being less than thirty days, any representation that he may wish to make against the findings of the Deputy Commissioner of Customs or Assistant Commissioner of Customs. (7) The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs House Agent, ....
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....sposed of in terms of Regulation 22(7) of CHALR, 2004, the impugned orders of suspension shall be kept in abeyance. The appellant herein, aggrieved by the said common order, filed W.A.Nos.2808 to 2811/2012 and they were disposed of with a direction directing the respective respondents therein to file appeals under Section 129A(1) of the Customs Act, 1962 within a stipulated time frame and with a further direction to dispose of the appeal on its own merits and in accordance with law and in pursuance to the directions, the appellants filed appeals and all the appeals were allowed. 19. Regulation 20 of CHALR, 2004 speaks about suspension or revocation of licence and as per Sub-Regulation (2), Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated. As per sub-regulation (3), after the order of suspension is passed under sub-regulation (2), the Commissioner of Customs, notwithstanding the procedure specified under regulation 22, may within 15 days from the date of such suspension, give....
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.... 22. No doubt, on the basis of the enquiry report/offence report, it is open to the appellant herein to suspend the services of the respective CHAs under Regulation 20(2) of CHALR, 2004 and he has done so. Thereafter, the appellant herein by following the procedure contemplated under Regulation 20(3), gave opportunity of personal hearing to the respective second respondents in these appeals and passed orders continuing the orders of suspension and the said order is also appellable under Regulation 22(8) of CHALR, 2004. 23. Regulation 22(1) stipulates that the Commissioner of Customs shall issue a notice in writing to the Customs House Agent stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit, within such time as may be specified in the notice, not being less than 30 days, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense. Proviso to Regulation 22(1) says that the procedure prescribed in regulation 22 shall not apply in respect of the provisions contained in sub-regulation (2) to regulation 20. 24. A joint reading of Regulation....
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....sue notice under Regulation 22(1) as the time limit of 90 days from the date of offence report/enquiry report has expired long back. 26. The Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise & Customs, New Delhi has also issued Circular No.9/2010-Cus., dated 08.04.2010 in F.No.502/2008-Cus VI, wherein clarification on procedures in issuance of licence to CHAs have been issued and it is relevant to extract the following paragraphs: (v) Time limit for completion of suspension proceedings against CHA licensee under regulation 22: 7.1. The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by the Board to prescribe an overall time limit of nine months from the date of receipt of offence report, by prescribing time limits at various stages of issue of Show Cause Notice, submission of inquiry report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs recording his findings on the issue of suspension of CHA license, and for passin....
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.... the intention behind the Statute. 30. In the light of the said legal position, it is not open to the appellant/Revenue to take a contra stand in respect of the time limit prescribed under Regulation 22 of CHALR, 2004. 31. The learned counsel appearing for the respective respondents has also brought to the knowledge of this Court the show cause notice issued by the Office of the Commissioner of Central Excise, Coimbatore in C.No.VIII/13/9/98-Vol.II-PF-Cus.Pol/9 dated 24.01.2012 in respect of M/s. Jay Yess Agencies under Regulation 22. The said document also supports the case of the respondents herein on the ground that the appellant is following and issuing notice under Regulation 22 of CHALR, 2004, but for the reasons best known to him, has not chosen to issue notice under the said regulations to the respondents in these appeals. No doubt, the appellant is entitled to pass initial order of suspension under Regulation 20(2) and to continue the order of suspension under Regulation 20(3) and however, it must be followed by a notice under Regulation 22 and the authority has to take a decision to suspend the licence permanently or revoke the licence under Regulation 22(1) and adm....