TaxTMI 
TaxTMI 
2025 (9) TMI 1108
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.... in the nature of Certiorari and be pleased to quash and set aside the letter dated 28.02.2020 and the Public Notice No. 26/2020-21 dated 03.09.2020 issued by the Respondent No. 2 and direct the Respondents to restore the Customs Broker Licence No. 11/2561 granted to the Petitioner. b. In the alternative this honourable Court may please direct the Respondents to Customs Commissioner, Pune to accept the fresh application of the Petitioner to be preferred within two months from the date of the order. -Transfer the payment made to Principal Commissioner of Customs New Customs House Mumbai of Rs. 5,000/- (Application Fee for the Licence) and deposit Rs. 5,00,000/- National Saving Certificate. -To accept of eligibility period from 3rd July 2019, i.e. the date of issue of license in Form B2 by New Customs House till the date of new licence for the purpose of provisions Regulation 7(4)." PROLOGUE :- 4. The Petitioner No. 1 is a company which was granted a Customs Broker License No. 11/2561 ("The said License") by the Principal Commissioner of Custom, Mumbai-Respondent No. 2 of which Petitioner No. 2 is the Managing Director. Petitioners are primarily aggri....
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.... qualifying both written and oral examination as stated above, submitted an Application in the prescribed Form-A on 26th September 2018 to Respondent No. 2 under Regulation 4(2) of the 2018 Regulations. This is because the petitioners intended to carry on business as a Customs Broker in Mumbai. Petitioner No. 1-Company also furnished the bonds as required in Form-D and Form-E along with a security of INR 5 Lakhs through National Savings Certificates, in compliance of the requirements under Regulation 8 of the 2018 Regulations. Further, the Petitioner No. 1-Company also paid statutory fees of Rs. 5,000/- as required under Regulation 7(1) of the 2018 Regulations, on passing the oral examination. 11. Pursuant to the above, Respondent No. 2 granted the said Customs Broker License on 3rd July 2019 in Form-B2 under Regulation 7(2)(b) of the 2018 Regulations, in favour of Petitioner No. 1. To this effect, Respondent No. 3 then issued a Public Notice No. 59 of 2019 dated 5th July 2019. 12. Respondent No. 2 then issued a Corrigendum dated 27th August 2019 to the public notice dated 05th July 2019, clarifying that Petitioner No. 1 is 'provisionally' found to be eligible for the grant o....
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....19. In this context, Mr. Salvi would contend that the said OM which purportedly requires the Petitioner No. 2 to appoint another qualified person to transact business in Mumbai, despite Petitioner No. 2 already being qualified under the 2013 Regulations, is illegal. The Regulation 7(2) of the 2018 Regulations does not support such position taken by the petitioners. 18. Mr. Salvi would submit that Petitioner No. 2 duly satisfied the criteria under Regulation 7(2)(b) by passing the examination under Regulation 6 of the 2018 Regulations, pursuant to which the said License was issued to the Petitioner No. 1. It is for such reason that the Petitioner No. 1 was granted the Customs Broker License in Form - B2 in terms of Regulation 7(2) of the 2018 Regulations read with Section 146 of the Customs Act, 1962. Thus, there was no necessity, legal and or otherwise, for the respondents to issue the Impugned Communication 28th February 2020 being contrary to 2018 Regulations, having no legal basis whatsoever. 19. Mr. Salvi would strenuously urge that the harassment of the petitioner by the respondents does not stop here. The petitioner did respond to the Impugned Letter dated 28th February....
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....timation the petitioners failed to comply. Thus, according to Mr. Sharma the Principle of Estoppel would not apply qua the petitioners in the given facts and circumstances. 24. Further, relying on the Impugned Letter dated 28th February 2020, Mr. Sharma would submit that the said letter refers to the applicable Regulations which required that the Petitioner No. 2 who is a qualified person under 2013 Regulations from Pune Commissionerate, is not eligible to conduct business in Mumbai. In this context, he would rely on the said OM issued by CBIC dated 9th August 2019 to the effect that the said License is to be issued to the person under Regulation 7(2) of the 2018 Regulations, only in the customs area where they have cleared the examination and not otherwise. Thus, the petitioners failed to comply with the said OM which rightfully entitled the respondents to take action of withdrawal of the petitioner's License, more particularly under Regulation 7(2)(b) of the 2018 Regulations. 25. Mr. Sharma would defend the action of withdrawal of the said License the respondents by relying on Regulation 7(4) of the 2018 Regulations as noted above. As the petitioners had failed to comply su....
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....qua the said License, already granted to the Petitioner No. 1 by Respondent No. 2 on 3rd July 2019. 30. At this juncture, it is apposite to refer to a decision of the Hon'ble Supreme Court in Raj kishor Jha vs. State of Bihar and Ors (2003) 11 SCC 519., and Sant Lal Gupta and others vs. Modern Cooperative Group Housing Society Limited and others (2010) 13 SCC 336 where the Hon'ble Supreme Court has accord that reason is the heartbeat of every conclusion without the same it becomes lifeless to ensure transparency and fairness in decisions making....... For such reasons, Mr. Salvi is correct in submitting that such Corrigendum issued by the Respondent No. 2 is not just arbitrary but also in breach of the elementary principles of natural justice which, to say the least, ought to have been adhered to, in the given facts and circumstances. 31. To place the fundamental issue of withdrawal of the petitioner's License by the respondents in its proper perspective, it becomes necessary to advert to Regulation 4 of the 2018 Regulations, which reads as under: - "4. Invitation of application.-(1) The '[National Academy of Customs, Indirect Taxes and Narcotics (NACIN)] shall i....
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....License.-(1)The applicant who has passed the written as well as oral examination shall make a payment of a fee of five thousand rupees within two months of the declaration of the results of the oral examination and inform the payment particulars to the Principal Commissioner r Commissioner of Customs referred to in sub-regulation (2) of regulation 4 and the said Principal Commissioner or Commissioner shall, on verification of the payment particulars grant license to the applicant within one month of the payment or the said fee: Provided that where the successful applicant fails to make the payment of the said fee within the stipulated period, the right to be granted a license to an applicant shall be forfeited. (2) The applicant who has paid the fee referred to in sub-regulation (I) shall be granted a license by the Principal Commissioner or Commissioner of Customs, as below:- (a) An individual shall be granted the license in Form B1 if that individual has passed the examination referred to in regulation 6. (b) A customs broker's license may be granted to any company, firm or association in Form B2 if at least one director, partner, or an aut....
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....ub-regulation (2) of regulation 4." (Emphasis Supplied) 34. In our considered view, a bare perusal of the above Regulations, clearly indicate that the said License in Form-B2 can be issued, if at least one director/partner/employee has passed the examination, referred to in Regulation 6 of the 2018 Regulations. In the given case, admittedly and undisputedly, the Petitioner No. 2 is the Director of Petitioner No. 1. Having fully complied with such statutory prescription by clearing both the written and oral examination which, under the Regulation 7(2) renders the Petitioner No. 2 both eligible and competent for grant of the said License. Thus, it is evident that the respondents by relying on the Impugned Letter 28th February 2020 has completely missed the wood for the trees by misconstruing, much less misinterpreting the said Regulations. 35. A careful perusal of the scheme of the Regulations, more particularly, the purport and language used in Regulation 4(2) read with the Regulation 7(2) of the 2018 Regulation. It is discernible that (i) the application for the said License ought to be made to the Principal Commissioner of Custom having jurisdiction over the area wh....
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....h a letter dated 3rd September 2020 stating that the said License issued to the Petitioner No. 1 under Regulation 7(2)(b) of the 2018 Regulations stood withdrawn from 26th August 2020. 39. Mr. Salvi is correct in submitting that there is no provision for withdrawal of license under the 2018 Regulations. In this regard, reliance placed by the respondents on the said OM dated 9th August 2009 through Mr. Sharma, is misplaced. In fact, on a specific query to him he accepted that the same is not annexed to the affidavit in reply of the respondents nor was it produced before the court. In any event, it is trite law that an OM stand alone cannot override the statutory Regulations issued under Section 146 of the Customs Act. Thus, the contention of Mr. Sharma who sought to justify the withdrawal of the petitioner's license by the respondents, mainly by relying on the said OM appears to be misconceived and does not persuade us. 40. What is mandated under the Regulations, is in fact, a provision for revocation of license or imposition of penalty under Regulation 14 of the said Regulations, for which a procedure is prescribed under Regulation 17. The respondents in their reply affidavit....