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2021 (9) TMI 380
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.... that Para - 32 (iii) of the original order of adjudication dated 3rd March, 2021 has been rectified by inserting that order of restoration of licence of the Customs Broker/Petitioner was subject to fresh security deposit and payment of penalty imposed under the said order. Facts in brief in this case as appear on perusal of the Writ Petition is that petitioner no. 1 is a partnership firm having a customs broker licence which is valid up to 23rd May, 2026. A proceeding under Section 17 of the Customs Broker Licensing Regulations, 2018 ("CBLR, 2018" in short) was initiated against the petitioner no. 1 which was finally culminated into original adjudication order dated 3rd March, 2021 being Annexure - "P-3" to the Writ Petition imposing punishment of penalty of Rs. 50,000/- and forfeiture of security deposit which was furnished by the petitioner no. 1 under Regulations 8 of Customs Brokers Licensing Regulations, 2018, at the time of granting Customs Broker Licence. It is the case of the petitioner that on 18th March, 2021 while processing a bill of entry at the Indian Customs EDI system it came to know of an "Alert" in EDI system of the Customs that the licence of the petitione....
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....f penalty of Rs. 50,000/- and forfeiture of security deposit and petitioner was surprised to find "Alert" in the customs EDI system on 18th March, 2021 that its aforesaid licence has been suspended but the respondent authority has never disclosed when the formal order of suspension of the said licence was passed and it is the case of the petitioner that the suspension of the aforesaid licence is in total disregard and in complete violation of provisions of Regulation 16 (1) and (2) of the Customs Brokers Licensing Regulations, 2018 which are only provisions for suspension of such licence. He submits that as per criteria laid down in the aforesaid Regulation 16 (1), the respondent authority could not have passed the order of suspension of the aforesaid licence on 15th March, 2021 since it is admitted position that after the final order of adjudication made on 3rd March, 2021 question of pendency of any enquiry or contemplation of any enquiry against the petitioner does not arise which are the criteria and conditions precedent for suspension of Customs Broker Licence under Regulation 16 (1) of Customs Brokers Licensing Regulations, 2018. Petitioner submits that displaying of "Aler....
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....is contention that officer concern should refrain from taking coercive action for recovery of the demand raised in the order of adjudication till the period of 6 months of filing of stay petition in Appeal against the adjudication order. He has further relied on a circular no. 984/08/2014-CX dated 16th September, 2014 issued by the Ministry of Finance, Department of Revenue (Central Board of Excise & Custom), Government of India in support of his contention that since the petitioner has filed appeal by making pre-deposit of 7.5% of the penalty imposed in the adjudication order dated 3rd March, 2021, no coercive measure for recovery of the balance amount under Section 129E of the Customs Act, 1962 should be taken. He has further relied on a circular no. 1053/2/2017-CX dated 10th March, 2017 issued by the Ministry of Finance, Department of Revenue (Central Board of Excise & Custom), Government of India, containing the opinion of Ministry of Law and advice that the adjudicating authority after passing the order of adjudication becomes functus officio and he can make rectification of an order where there is only minor clerical mistakes and which does not alter the adjudication or....
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....th March, 2021 but it has failed to annex in his affidavit any formal order of such suspension of the licence of the petitioner and also could not show from record as to how formalities of Regulation 16 (1) & (2) of the Customs Brokers Licensing Regulations, 2018 for suspending the aforesaid licence were observed by the Commissioner of Customs after passing the original order of adjudication on 3rd March, 2021 after which no proceeding was pending or contemplating against the petitioner. Learned Advocate appearing for the respondents customs authority submits that suspension of the aforesaid licence is automatic on non deposit of penalty and fresh security deposit in compliance of the original adjudication order dated 3rd March, 2021 but in support of his such contention could not show any provision of law, regulation, notification or circular or guideline with regard to such penal action of automatic suspension of the petitioner Customs Broker's licence in question in case of such non-compliance of the adjudication order which has no whispering about the suspension of the aforesaid licence. Learned Advocate appearing for the respondents customs authority could not show any p....
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....nsequence of non deposit of fresh security deposit petitioner was not allowed to transact its business. He submits that order of corrigendum under Section 154 of the Customs Act, 1962 was issued after approval by the Commissioner of Customs on 30th April, 2021 informing the petitioner on 3rd May, 2021 that its aforesaid licence will be restored only after fresh security deposit and deposit of penalty amount of Rs. 50,000/-. He further submits that since the petitioner failed to deposit the penalty amount and started to transact its business by processing bill of entry, an "Alert" and "Suspension" has been issued in the EDI system of Customs for restricting transaction of its business. Some provisions of Customs Act, 1962 which are relevant for this case are quoted hereunder: "129-E. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal.-- The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal, - (i) Under sub-section (1) of Section 128, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalt....
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....ipt is furnished, the benefit of interest on the instrument shall accrue to the Customs Broker concerned." "Regulation 16. Suspension of license. - (1) Notwithstanding anything contained in regulation 14, the Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated: Provided that where the Principal Commissioner or Commissioner of Customs may deem fit for reasons t be recorded in writing, he may suspend the license of a specified number of Customs Stations. (2) Where a license is suspended under sub-regulation (1), the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose license is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs Broker: Provided that in case the Principal Commissioner of Customs or ....
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....order of punishment by suspending Customs Broker licence of the petitioner or put conditions of restoration of licence of Customs Broker and make substantial and significant alteration in the original order of adjudication after passing of the original adjudication order in the name of correcting clerical or arithmetical or typographical error when in the original adjudication order there were only two punishments that is penalty of Rs. 50,000/- and forfeiture of security deposit of the petitioner and there was no whispering about the suspension of the aforesaid licence in it? (v) Whether the term "security deposit" has the same nature and character as of "Duty" or "Penalty"? (vi) Whether by making pre-deposit of 7.5 % of the amount of penalty imposed in adjudication order while filing appeal before the Tribunal against the original adjudication order would amount to automatic revocation or stay of the order of forfeiture of security deposit? For answering the aforesaid questions I would like to deal with the relevant provisions of law, circulars, notifications etc., and the judgments relied upon by the parties in course of hearing. The respondents Customs a....
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....not show any provision of law relating to concept of "automatic" or "Deemed" Suspension of Customs Broker licence under the Customs Act, 1962 or Customs Brokers Licensing Regulations, 2018. Learned Advocate for the respondents also could not show any guideline with regard to display of "Alert" and "Suspension" as to when and in which case it will be displayed in the Indian Customs EDI system. With regard to justification of the respondent for invoking Section 154 of the Customs Act, 1962 as appears at Page - 13 and 14 of the connected applications and defending the action of the respondent Commissioner of Customs, on perusal of the same I find that the order of Commissioner at page - 14 does not bear any date and signature of the Commissioner which was attested and forwarded by the staff of the Customs Department to the petitioner as appears at Page - 14 by letter dated 3rd May, 2021 communicating to the petitioner that its Customs Broker licence will be restored subject to fresh security deposit and on payment of penalty imposed in adjudication order. When the respondent produced the original order under Section 154 of the Customs Act, 1962, I found that it does not tally with ....
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....oted instead of taking recourse to corrigendum and that after the order of adjudication, authority passing such order becomes functus officio as appears from the aforesaid notification dated 16th December, 1999. In view of the discussion made above I am of the considered opinion that the impugned action of suspending Customs Broker Licence of the petitioner which is penal in nature depriving livelihood of the petitioner, is not supported by any provision of law and has no legal sanction and is not sustainable in law since it is settle position of law that every action of the statutory authority must be supported by legal provisions and authorization by the statute and a statutory authority cannot act or do anything which has not been authorised under the law and it shall act only in the manner it has been authorised by law. I am also of the considered opinion, in view of the discussion made above that the impugned order of corrigendum under Section 154 of the Customs Act, 1962 is not sustainable in law since in the name of rectification of clerical or arithmetical or typographical mistake neither any additional penal order of suspension of licence can be inserted nor any fres....
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.... circular talks about Security Deposit and such contention is not supported by any Act, circular or notification. All the circulars and notifications and regulations and the statute upon which the petitioner has relied talks only about "Duty" and "Penalty" and "Interest" and do not cover the issue of forfeited security deposit in adjudication proceeding. Circular No. 201/04/98-CX.6 issued by the Ministry of Finance, Department of Revenue (Central Board of Excise & Custom), Government of India upon which petitioner has relied has no relevance since it specifically relates to Central Excise and it talks about "Duty" demanded and is applicable in the cases where the formal stay application has been made and is pending with a direction upon the Appellate Authority to dispose the stay application within a month of its filing. So this Circular has got no manner of application in this case since there is no involvement of fact of filing of stay application during the appeal against the order of adjudicating authority. Circular being F. No. 208/41/2003-CX-6 issued by the Ministry of Finance, Department of Revenue (Central Board of Excise & Custom), Government of India dated 25th May,....
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.... it is not decided by the Appellate Authority it does not reach its finality, with the deepest respect that it is undisputed and settled proposition of law. Paragraph- 69 of the said judgment of the Hon'ble Supreme Court is quoted hereunder from which it appears that it has no relevance with the case of the petitioner for the purpose of automatic stay or revocation of the order of forfeiture of security deposit by mere filing of appeal by making pre-deposit of the penalty imposed in the adjudication order: "69. That decision of the learned Single Judge was not left unchallenged. In fact, the correctness of the judgment of the learned single-Judge was put in issue by the Union of India by filing an intra- court appeal. Filing of an appeal destroys the finality of the judgment under appeal. The issues determined by the learned Single Judge were open for consideration before the Division Bench. However, the Division Bench was denied the opportunity of hearing and the aggrieved party could also not press for decision of the appeal on merits, as before the appeal could be heard it was rendered infructuous on account of the Ordinance itself having ceased to operate. The Union of....
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....f an appeal shall lie against any order passed by a Court or Tribunal. Once a Special Leave is granted and the appeal is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open. In such an appeal, the court is entitled to go into both questions of fact as well as law. In such an event the correctness of the judgment is in jeopardy." "38. In the aforementioned cases, this Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit." In view of the discussions made above, my answers to the questions framed above are as follows: (i) There is no existence of any provision of "Deemed Suspension" or "automatic suspension" of licence of a Customs Broker under the Customs Act, 1962 or under the Customs Brokers Licensing Regulations, 2018 and action of the res....
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....judication order in the name of correcting clerical, arithmetical or typographical mistake since additional punishment of suspension of the aforesaid licence or imposing of conditions for revocation of suspension of Customs Broker Licence would amount to substantial alteration in the original order of rectification and the same could not be called a correction of clerical, arithmetical or typographical mistake in the original adjudication order. I am of the considered view that in case of non-compliance of the adjudication order by the petitioner legal consequences will follow automatically and for compliance or implementation of the original order of adjudication a further corrigendum under Section 154 of the Customs Act, 1962, is not required. (v) In my considered opinion terms "Duty" and "Penalty" cannot be equated with "Security Deposit" since "Duty" is levied on dutiable goods and is actually indirect tax imposed by the government on the importation or exportation of goods or commodities and "Penalty" arises out of violation or breach of any provision of law and both arise out of an adjudication proceeding while "Security Deposit" is a condition precedent for granting....