AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 1621
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....ovision of Regulation 23 of the 'Regulations of 2013' deserves to be quashed by this Court as the same has been passed without giving any prior opportunity of hearing to the petitioner and it has virtually deprived the petitioner assessee of its source of livelihood by prohibiting it from operating in the jurisdiction of Respondent Commissioner of Customs, Bangalore Division. 3. He has submitted that the allegation of mis- declaration against the petitioner assessee on behalf of the importer, M/s.J.P. Traders, as made in the impugned order that the petitioner deliberately misclassified the goods under CTH 25202090 attracting the rate of duty at 5% as against the appropriate classification under CTH 68090000 attracting duty at the rate of 10% cannot be said to be a mis-declaration on the part of the petitioner, the Customs Broker and such declaration is made by the importer and therefore no offence was committed by the present petitioner to attract the consequence of "prohibition" under Regulation 23 and the impugned order, therefore, deserves to be quashed. 4. He has further submitted that Section 122-A of the Act contained in Chapter XIV dealing with the "Confiscation of Goo....
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.... appeals provided under the Regulations of 2013 for which a separate Regulation No.21 has been enacted, could provide only for the appeals to the next higher Appellate Authority, namely, the Tribunal in the present case, since the impugned order has been passed by the Commissioner only if the impugned order was for suspension or cancellation of the license as provided under Regulations 18 and 19 of 'Regulations of 2013'. 8. He has further drawn the attention of the Court towards Regulation 20 which provides for the procedure to be followed by the Commissioner of Customs for revoking licence or for imposing a penalty and which inter alia envisages issuance of a notice in writing to the Customs Broker within a period of 90 days from the date of receipt of the Offence Report. 9. He has relied upon the judgment of the Division Bench of Delhi High Court in the case of Overseas Air Cargo Services Vs. Commissioner of Customs (General), New Delhi 2016 (340) E.L.T. 119 (Del.) to the effect that the said period of 90 days under Regulation 20 is of mandatory nature and not directory. 10. The learned counsel for the petitioner therefore, submitted that the impugned order deserves to b....
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.... the present case, it is considered appropriate to quote the relevant provisions of the Act and the Regulations of 2013 as discussed above. " 2. Definitions: In this Act, unless the context otherwise requires - [(1) "adjudicating authority" means any authority competent to pass any order or decision under this Act, but does not include the Board, Commissioner (Appeals) or Appellate Tribunal; 122-A. Adjudication Procedure: (1) The adjudicating authority shall, in any proceeding under this Chapter or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires. (2) The adjudicating authority may, if sufficient cause is shown at any stage of proceeding referred to in sub-section (1), grant time, from time to time, to the parties or any of them and adjourn the hearing for reasons to be recorded in writing: PROVIDED that no such adjournment shall be granted more than three times to a party during the proceeding. 129-A. Appeals to the Appellate Tribunal: (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal agai....
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.... (b) failure to comply with any of the provisions of these regulations, within his jurisdiction or anywhere else; (c) committing any misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station; (d) adjudicated as an insolvent; (e) of unsound mind; and (f) has been convicted by a competent Court for an offence involving moral turpitude: Provided that the imposition of penalty or any action taken under these regulations shall be without prejudice to the action that may be taken against the Customs Broker or his employee under the provisions of the Customs Act, 1962 (52 of 1962) or any other law for the time being in force. Regulation 19: Suspension of licence. - (1) Notwithstanding anything contained in regulation 18, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending or contemplated. (2) Where a licence is suspended under sub-regulation (1), the Commissioner of Customs sha....
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....ial, 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, as the case may be, shall prepare a report of the inquiry and after recording his findings thereon submit the report within a period of ninety days from the date of issue of a notice under sub-regulation (1). (6) The Commissioner of Customs shall furnish to the Customs Broker a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, and shall require the Customs Broker to submit, within specified period not being less than thirty days, any representation that he may wish to make against the said report. (7) The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the licence of the Customs Broker or imposing penalty not exceeding the amount mentioned in regulation 22 within ninety days from the date of submission of the report by the Deputy Commissioner ....
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.... the territorial jurisdiction of the Authorities of the Customs Department. Regulations 11 and 17 of the said CBLR, 2013, which are alleged to have been breached by the present Customs Broker have been quoted by the Respondent- Commissioner of Customs in the impugned order itself. 7. It is true that prima-facie, this order appears to have been passed without giving any prior notice and opportunity of hearing to the petitioner, but a perusal of different Regulations particularly, Regulation Nos.18, 19, 20, 22 and 23 indicates that various kinds of penalties and actions are envisaged under these Regulations to be taken against the erring Customs Broker. 8. Regulation 19 provides for Suspension of licence, while Regulation 20 provides the Procedure for revoking licence or imposing penalty. Regulation 22 provides for the Penalty for contravention of any provisions of these Regulations extending up to Rs. 50,000/-. Regulation 23, which has been invoked in the present case is a non- obstante provision in the said Regulations, where by the competent authority namely, the Prl.Commissioner of Customs or Commissioner of Customs may prohibit any Customs Broker from working i....
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....rticle 226 of the Constitution of India should desist from doing so. 12. A lenient and conveniently held out tool of ground of natural justice cannot be used to protect those who have indulged in gross violation of Regulations and Rules and which has resulted in evasion of tax and duties and has caused revenue loss. On the face of it, this ground invoked in the writ jurisdiction, may appear to be attractive to exercise the discretion under Article 226 of the Constitution of India but the malaise in such cases is indeed deep-rooted, where the Courts in its extraordinary jurisdiction, on the basis of the Affidavits only cannot even easily reach into. Such cases should essentially come to the Constitutional Courts after being screened by the fact finding Departmental Authorities, which hierarchy of authorities is already set up to exercise the appellate and revisional jurisdiction under the relevant laws. 13. The protection, relief and quashing of the impugned orders in such cases on such vaguely worded grounds on a misplaced sympathy can cause more damage to the Society than even protecting the semblance of legal rights which the petitioners may have. 14. T....
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....ed in Clauses (a) to (g) of sub-Section (2) of Section 146 of the Act are not restrictive in any manner, but they provide for different fields for which Regulations can provide for. Unless the Regulation 21 quoted above itself was couched in a narrow and limited terms to provide for an appeal only against the suspension and cancellation of licence, the State could have said so, but Regulation 21 on the other hand is couched in wider terms and it stipulates that a Customs Broker may prefer an appeal under Section 129-A of the Act if he is aggrieved by any order passed by the Commissioner of Customs. 19. The word "any order" in Section 129-A of the Act would undoubtedly cover an order passed under Regulation 23 as well, more over, Section 129-A of the Act, the parent provision from which the right to appeal flows to the aggrieved person does not have any such restrictive terms incorporated in the said provision. It says that a decision or order passed by the Principal Commissioner of Customs as an 'adjudicating authority' shall be appealable. There is no doubt that the order passed under Regulation 23 by the Principal Commissioner of Customs is also an order passed by him as an 'a....
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...., suspension of licence which is India-wide permission or even cancellation thereof. Regulation 23 does not in its own terms provide for any temporary or permanent prohibition. The said prohibition by the terms of Regulation 23 can continue even for an indefinite period. While the suspension and revocation of licence completely bar and ban the business of the Customs Brokers on all-India basis, the "prohibition" under Regulation 23 may have the effect only for a particular Section or Sections of the particular territorial jurisdiction of the Customs Station. The non obstante provisions of Regulation 23 to prohibit a Customs Broker from working in any Section of the particular territory of Customs Department, appears to have been enacted to put in place the effective measures against the illegal activities and evasion of duties and that is why the procedure of giving of a prior notice and opportunity of hearing appears to have not been deliberately provided for in the said Regulation 23. Nonetheless, the remedial measure to an aggrieved person is provided for in the Scheme of the Act and Regulation 21 itself. 22. Therefore, this Court is of the clear opinion that even the orders ....