[Order per : Ashok Jindal, Member (J)]. - The appellant namely M/s. Sharp Logistics Pvt. Ltd., (a CHA), has filed this appeal against the impugned order wherein their CHA licence No. 11/247 has been continued to be under suspension pending enquiry under Regulation 22 of CHALR, 2004.
2. Today the stay application is listed before us. After hearing the stay application for some time, we find that the appeal itself has to be disposed of because if we allow stay, the same will be amounting to allowing the appeal. Therefore, we have taken both, the stay application and the appeal, together for disposal with the consent of both the sides.
3. The facts in brief are that the Central Intelligence Unit, JNCH, Nhava Sheva (CIU in short) has investigated a case of attempted filing of a time-barred refund claim by M/s. General Motors amounting to Rs. 5.15 crore and further informed that Shri Haresh B. Shah, Director of the appellant-Company has violated the provisions of Section 13 of the CHALR, 2004, by facilitating filing of time-barred claim and by not bringing to the notice of the Customs authorities about the attempt of M/s. General Motors in filing the time-barred refund claim. The Revenue was of the view that if the appellant had acted with due diligence, the attempted filing of time-barred refund claim would not have taken place. As the investigation has started, M/s. General Motors withdrew the refund claim which was allowed to withdraw on 9-12-2010. The investigation conducted revealed that a time-barred application for refund was filed by M/s. General Motors and Shri Shreyas Randive, the then Senior Divisional Manager of M/s. General Motors, stated in his statement that he had prepared and signed the application for refund and handed it over to their CHA M/s. Sharp Logistics in June, 2010. Shri Haresh B. Shah, Director of the appellant-firm denied that he ever received or filed such an application. Shri Ashish Sheth, Managing Director of the appellant-firm, whose statement recorded on 1-6-2011, stated that the subject refund claim has not been filed by their office situated in Mumbai but was not sure whether the same was filed by their Baroda office. An investigation was conducted and Shri Haresh B. Shah later on admitted that the said refund claim was filed on instruction from Shri Shreyas Randive who has telephonically instructed to send such mail to show it to his higher authorities; that he was under pressure from Shri Shreyas Randive as he was giving him business. Shri Shreyas Randive has also stated that he had instructed Shri Haresh B. Shah to file a refund claim in September, 2010 to which Shri Haresh B. Shah denied the same and claimed that he had not attended office till November 2010. From the said act, it appeared that Shri Haresh B. Shah has not filed the said refund claim but he was privy to the said act which is evident from the fact that he had sent an e-mail to Shri Shreyas Randive, General Manager of M/s. General Motors wherein he had intimated Shri Shreyas Randive about the filing of refund which he later admitted at the insistence of Shri Shreyas Randive. From the above act of Shri Haresh B. Shah, it is evident that the appellant has violated the provisions of Regulation 13 of the CHALR 2004 for facilitating filing of time-barred claim and by not brining to the notice of the Customs, the attempt of M/s. General Motors in filing the time-barred refund claim. If he had acted with due diligence, the said time-barred refund claim could not have filed. Therefore, it was alleged that the appellant has violated the Regulation 13(d) and 13(e) of the CHALR, 2004. In view of this the appellant’s licence was suspended on 23-5-2012. After the suspension of licence of the CHA, post decisional hearing took place and the suspension of licence was ordered to be continued pending enquiry under Regulation 22 of CHALR, 2004 on 18-6-2012. Aggrieved by the impugned order the appellants are in appeal.
4. Shri Sanjay Agarwal, learned Advocate appeared for the appellant and submitted that in this case the investigation started in the month of December, 2010 and the statement of the appellant was recorded in June, 2011 and in the order dated 18-6-2012 it has been recorded that the investigation report from the CIU, JNCH, Nhava Sheva along with relied upon documents were received in April, 2012 and their licence has been suspended on 23-5-2012 which is in gross violation of Regulation 20(2) of CHALR, 2004. He submitted that as per the Regulation 20(2), if the Commissioner of Customs feels that immediate action is necessary then within fifteen days from the date of receipt of the report from investigating authority, can suspend the licence of a CHA where an enquiry against such agent is pending or contemplated. He further submitted that in this case, admittedly the prescribed time limit under Regulation 20(2) of CHALR, 2004 has not been followed.
4.1 He further submitted that on 8-4-2010 a Circular No. 9/2010-Cus. was issued for dealing with the Regulation 20(2) and Regulation 22 of the CHALR, 2004. In para 7.2 of the said Circular it is prescribed that the investigating authority shall furnish its report to the Commissioner of Customs who had issued the CHA licence within thirty days of the detection of an offence. The Licensing authority shall take immediate suspension action within fifteen days of the receipt of the report of the investigating authority. Thereafter, a post-decisional hearing shall be granted to the party within fifteen days from the date of suspension. In this case no time limit has been followed.
4.2 He further drew our attention to the impugned order wherein it has been recorded that Shri Haresh B. Shah was a Director of the appellant-Company. In fact, Shri Haresh B. Shah is neither Director of the Company nor an employee of the appellant-Company but he is only a consultant in their Baroda office. This fact is evident from the CHA licence itself that Shri Haresh B. Shah has resigned from the appellant-firm as Director/employee long back in 2007 and this fact has not been appreciated by the adjudicating authority and a case has been made out against the appellant on the basis of the statement of Shri Haresh B. Shah. The working of Shri Haresh B. Shah is no way having any relevance with the appellant as neither he was an employee nor a Director of the appellant-firm at that time. Therefore, cognizance of the offence taken by the respondent on the basis of the statement of Shri Haresh B. Shah is without appreciating the fact that he is nowhere related to the appellant. Therefore, immediate suspension of their licence is not required.
4.3 In support of his contention, he relied on the following judgments :-
1. Om Freight Forwarders Pvt. Ltd. v. Commissioner of Customs (General), Mumbai - 2011-TIOL-73-CESTAT-MUM.
2. Sunil Bhatia v. Commissioner of Customs, New Delhi - .
3. Kamal Sehgal v. Commissioner of Customs - (Tri. Del.)
4. Commissioner of Customs (General) v. Burieigh International - (Bom.)
5. Commissioner of Customs (General) v. National Shipping Agency - (Bom.)
4.4 He further contended that the case relied on by the Revenue are not relevant to the present provisions of Regulation 20(2) of CHALR, 2004 as the same has been amended with effect from 8-4-2010 and the decision relied upon by the respondents in the case of Ami Clearing & Forwarding Pvt. Ltd. v. Commissioner of Customs (General) Mumbai - (Tri.-Mum), Orient Clearing and Forwarding Agency v. Union of India - (Cal.) and AR Marines Pvt. Ltd. v. Commissioner of Customs (General) Mumbai - (Tri.-Mum.) deals with for the provisions prior to 8-4-2010. In view of these submissions he prays that the impugned order be set aside.
5. On the other hand, the learned A.R. reiterated the impugned order but fairly admitted that it is recorded in the impugned order that the investigation report was received in the office of the respondent in April 2012 and the licence of the appellant was suspended on 23-5-2012 i.e. after 23 days of the receipt of the investigation report and submitted that the delay of eight days is condonable in the facts and circumstances of the case. Therefore the impugned order is to be upheld.
6. Heard both sides and considered their submissions.
7. We find that in this case M/s. General Motors has filed a refund claim on 6-12-2010 which was withdrawn by them on 9-12-2010 when investigation took place. From the said facts it is clear that the investigation has started somewhere in December, 2010 when the refund claim was withdrawn. The refund claim was arose on the basis of that in February, 2010/March, 2010 one Korean firm had by oversight mentioned the invoice amount as US $ instead of Koren Won (KRW) due to which the two shipments cleared on the higher invoice value (showing the wrong currency) that in June, 2010, they realized the mistake and brought it to the notice of the higher ups and handed it over the refund claim in the first week of June, 2010 to the appellant at their office. In September, 2010, when M/s. General Motors India Pvt. Ltd. pointed out the mistake of extra duty payment and wrong invoicing and contacted the appellant to process the refund claim if it was not filed earlier and it was also intimated to them that the refund claim has already been filed in June 2010 and the same was e-mailed in November, 2010.
7.1 From the perusal of the impugned order it is coming out that Shri Harish B. Shah has not filed the refund claim but he was privy to the said act as he has e-mailed to Shri Shreyas Randive for filing the refund claim but it is also cleared from the records that Shri Harish B. Shah has resigned from the appellant-firm as Director in 2007 thereafter he was neither a Director nor an employee of the appellant-firm but he is only a Consultant in their Baroda office. Therefore, the violation of Regulation 13 of CHALR, 2004 as alleged on the basis of the statement of Shri Harish B. Shah who was neither Director nor an employee of the appellant-firm during the relevant time prima facie is not acceptable.
7.2 Further, the contention raised by the appellant that the action of suspension of their licence under Regulation 20(2) is not warranted at all. For better appreciation of the facts we reproduce the Regulation 20(2) of CHALR, 2004 as under :-
(1) ……………..
(2) Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary (within fifteen days from the date of receipt of a report from investigating authority, suspend the licence) of a Customs House Agent where an enquiry against such agent is pending or contemplated.
7.2 We further find that the Circular 9/2010, dated 8-4-2010 also deals with the situation and the same is reproduced as under :-
“7.2 In cases where immediate suspension action against a CHA is required to be taken by a Commissioner of Customs under Regulation 20(2), there is no need for following the procedure prescribed under Regulation 22 since such an action is taken immediately and only in justified cases depending upon the seriousness or gravity of offence. However, it has been decided by the Board that a ‘post-decisional hearing’ should be given in all such cases so that errors apparent, if any, can be corrected an opportunity for personal hearing is given to the aggrieved party. Further, Board has also prescribed certain time limits in cases warranting immediate suspension under Regulation 20(2). Accordingly, the investigating authority shall furnish its report to the Commissioner of Customs who had issued the CHA licence (Licensing authority) within thirty days of the detection of an offence. The Licensing authority shall take necessary immediate suspension action within fifteen days of the receipt of the report of the investigating authority. A post-decisional hearing shall be granted to the party within fifteen days from the date of his suspension. The Commissioner of Customs concerned shall issue an Adjudication Order, where it is possible to do so, within fifteen days from the date of personal hearing so granted by him.”
7.3 From the above provisions, it is clear from the mandate of the legislature, the Regulation 20(2) has prescribed time limit. With effect from 8-4-2010, it is also clarified that if the Commissioner of Customs feels in appropriate cases where immediate action is necessary against the CHA, same should be done within fifteen days from the date of the receipt of the report from the investigating authority to suspend the licence and it is further clarified by the Circular that for immediate suspension on Regulation 20(2), certain guidelines to be followed and as per those guidelines the investigating authority has to furnish its report to the Commissioner of Customs (Licensing authority) within thirty days of the detection of an offence. Thereafter, the Licensing authority shall take necessary immediate suspension action within fifteen days of the receipt of the report of investigating authority. In this case, we find that the investigation was started somewhere in December, 2010. As per the impugned order, the investigation report has been received by the Licensing authority somewhere in April, 2010. From the above, it is clear that the investigating authority has not submitted their report within thirty days of the detection of the offence. Further, we find that the suspension of licence was done on 23-5-2012 whereas it is an admitted fact investigation report has been received somewhere in April, 2012. If we consider that the investigation report has been received on 30-4-2012, then also the suspension is beyond the time period prescribed under 20(2) of CHALR, 2004.
7.4 In the case of Om Freight Forwarders Pvt. Ltd. (supra) this Tribunal has dealt with the situation and in para 8 of the said judgment, this Tribunal has observed as under :-
“8. The period prescribed under Regulation 20(2) is 15 days from the date of receipt of a report from investigating authority. The Board’s Circular has clarified that the investigating authority is liable to make a report to the Commissioner (Licensing authority) within 30 days. The purport of the new provisions is that the licensing authority should, if he deems it fit to suspend the CHA licence, do so within 15 days from the date on which he receives information about the offence of the CHA. In the instant case, the respondent Commissioner had received on 9-8-2010 the order passed by the Commissioner of Customs (Export) in adjudication of a show cause notice earlier issued to the exporters and the CHA. Information about the offence of the CHA was received by the respondent-Commissioner on 9-8-2010. The period of 15 days should be counted from this date, it is not in dispute that the impugned order was passed by the Commissioner suspending the CHA licence only on 25-10-2010. The action taken by the Commissioner cannot be reckoned in a light vein as proposed by the SDR. The Commissioner is not above the law. He has to obey it. In the present case, the Commissioner’s order was passed far beyond the period prescribed by the legislative authority.”
7.5 The issue again dealt with by this Tribunal in the case of Sunil Bhatia (supra) wherein the report of the investigating authority was submitted on 24-10-2010 and the suspension order issued on 15-12-2010 and this Tribunal has observed that there has been a considerable delay in issue of the suspension order when adjudged against the time frames prescribed by the Board and thereafter the suspension was revoked.
7.6 Again this issue came before this Tribunal in the case of Kamal Sehgal (supra) and there also this Tribunal hold as under :-
“8. We note from the arguments on both sides that the alleged offence against the appellant is not about any action he has done in his capacity as a Customs House Agent. It is about not notifying the department about his knowledge that Shri Lokesh Kumar had intention to smuggle goods. The evidence against the appellant is not based on documents. It is based on statement of the co-accused and the statement of the appellant about his awareness about intentions of another person. So this matter needs to be tested in a regular adjudication proceeding. In the meanwhile his license has been suspended. Such suspension is normally done to ensure that he does not misuse his position as CHA, having access to Customs area to destroy evidence if any, and also to be on guard about his actual involvement that may be unearthed during investigation. Now that a show cause notice has been issued, the said reasons no longer exist. We also take note of the delay in complying with time frame prescribed by CBEC in Circular No. 9/2010, dated 8-4-2010. The decision of the Madras (sic) A.P. High Court in the case of HB Cargo Services (supra) was in the context of a revocation order. The impugned order is a suspension order passed before appreciating the full evidence and considerable time has lapsed after the suspension order. We note that there is no procedure prescribed for periodic review of suspension order which is confirmed after post decisional hearing. Considering all these aspects, we consider it proper to set aside the impugned order suspending the licence of the appellant.”
7.7 The Hon’ble High Court of Bombay also dealt with the issue in the case of National Shipping Agency (supra). Although it is for the period prior to 8-4-2010, the Hon’ble High Court also observed as under :-
“2. The power of suspension is pursuant to the powers conferred under Regulation 20(2) of the CHALR, 2004. As we have noted in the earlier judgments, this is an emergent power to be used in those cases where it is required that the CHA licence be immediately suspended. The very fact that alleged violation is of the year 2005, as the import had taken place in September, 2005 and order of suspension was issued on 30-10-2006 itself would indicate that there is no emergency which required that the licence be suspended. The tribunal has noted that it is always open to the appellants herein to take steps even after the order of the Tribunal dated 11-5-2007. It appears that no show-cause notice has been issued to the respondents herein, till date.”
7.8 Same view was taken by Burieigh International (supra) as reproduced under :-
“2. In the instant case, the tribunal by its impugned order has held that the order of suspension was passed seven months after the alleged misuse came to the notice of the appellant. Regulation 20(2) no doubt confers power to suspend pending enquiry. The said sub-regulation however, requires that it can be done in an appropriate case and after following procedure under Regulation 20(2).”
7.9 We have also examined the case law relied on by the learned A.R. in the case of Ami Clearing & Forwarding Pvt. Ltd. (supra) and AR Marine Pvt. Ltd. (supra). All these cases are dealt with the situation prior to 8-4-2010.
7.10 Therefore, as explained by this Tribunal in the case of Om Freight Forwarders Pvt. Ltd. (supra), we are also not impressed with the proposition made by the learned A.R. that Regulation 20(2) as it stood prior to its amendment should be applied to this case, considering the fact that the violation by the CHA had occurred way back in 2010.
7.11 On examination of the above case laws, it is the position in this case that the investigation took place somewhere in December, 2010 i.e. after the amendment in Regulation 20(2) of CHALR, 2004 and the investigation report was received by the Commissioner (as admitted) in April, 2012 and the licence has been suspended on 23-5-2012 are barred by time-limit prescribed for taking immediate necessary action as proposed by Regulation 20(2) of CHALR, 2004. Admittedly CHALR, 2004, have not provided any provision for condonation of this delay. Therefore, the belated action taken by the respondent cannot be condoned. The respondent is not above the law. He has to follow the provisions of law as laid down in the statute and within time frame work.
8. In view of these observations, we set aside the impugned order and revoked the suspension of the CHA licence No. 11/247 of the appellant M/s. Sharp Logistics Pvt. Ltd. with immediate effect.
9. Order is to be issued immediately.
(Pronounced in Court on .........................)
| | | Sd/- (Ashok Jindal) Member (Judicial) |
10. [Order per : Sahab Singh, Member (T)]. - I have carefully gone through the proposed order made by the learned Member (Judicial). However, I have different views on the issues. Hence I am recording the separate order.
11. Brief facts of the case have been broadly brought out in the proposed order made by the learned Member (Judicial). Hence, I am not repeating the same. Allegations against CHA in brief are that the refund claim of Rs. 5.15 Crores was attempted to be filed in October 2010, which had become time-barred by October 2010 and Smt. Shivani Gurav STA inserted the said entry of General Motor refund at serial No. 1284 of page 364 which pertains to the claims received upto 16th June 2010. By making this entry, the claim would have been treated as filed within time limit. But after the said attempt to file the time-barred refund claim was exposed by the department, M/s. General Motors chose to withdraw the claim. Shri Ashish Sheth has admitted to having filed a time-barred refund claim earlier. It is also admitted in the statement by Shri Ashish Sheth Managing Director that they charge 3% and above as remuneration in refund claim which would amount to approximately Rs. 15 lakhs to Rs. 22.5 lakhs. If the time-barred refund claim was accepted by the department having been filed on 16-6-2012 and refund sanctioned then appellant CHA would have got Rs. 15 lakhs to Rs. 22.5 lakhs as a remuneration and there would have been loss to Revenue amounting to Rs. 5.15 Crores.
12. I have perused the relevant records and considered the rival submissions of both the sides.
13. Commissioner of Customs ordered suspension of CHA Licence No. 11/247 vide order No. 11/2012, dated 23-5-2012 and the suspension is ordered to be continued vide order No. 15/2012, dated 18-6-2012 passed by Commissioner of Customs (General) Mumbai.
14. I find that this appeal has been filed by the appellant CHA on 20th June 2012 against the Order-in-Original No. 15/2012, dated 18-6-2012. The impugned order No. 15/2012 has been passed under Regulation 20(3) of Customs House Agents Licensing Regulations, 2004 and after going through the order dated 18-6-2012, I find that a personal hearing was given to the appellant CHA on 5th June 2012 which is within the time limit of 15 days as prescribed under Regulation 20(3) of the CHALR when counted from 23-5-2012 of order No. 11/2012 from which date the licence was suspended. It is also noticed that this order No. 15/2012 was issued on 18-6-2012, which is also within 15 days from the date of personal hearing i.e. 5th June 2012 as prescribed in the Regulation 20(3) of the CHALR. Therefore I do not find any infirmity in the order No. 15/2012 passed Commissioner of Customs under Regulation 20(3) of the CHALR.
15. The main argument of the learned Advocate appearing for the appellant is that suspension order No. 11/2012, dated 23-5-2012 has been passed beyond the time limit of 15 days as prescribed under Regulation 20(2) of the CHALR. It is the contention of learned Advocate that the investigation report was received within the month of April and even if 30th April is taken as date of receipt of the investigation report, the order is issued beyond 15 days as prescribed under Regulation 20(2) of the CHALR.
15.1 I find that the appellant has not challenged the order No. 11/2012, dated 23-5-2012 before the CESTAT as they have not filed any separate appeal against the Order No. 11/2012, dated 23-5-2012. Therefore, they cannot point out the infirmities in the order No. 11/2012 for the purpose of appeal filed against the order No. 15/2012 against which the appellant has filed this appeal.
15.2 Moreover, I find that under CHALR, the Commissioner of Customs is licensing authority for grant, suspension and revocation of licence. The investigation report was received in the Custom House but it is the important when this investigation report was brought to the notice of Commissioner of Customs by way of putting up the file to the Commissioner of Customs. It is also to be seen whether from that date the Commissioner of Customs has suspended the licence within 15 days on file. The delay caused in putting up the file to the Commissioner as well as delay in dispatch of the suspension order by the officials can be on account of other reasons in view of peculiar facts of the case.
16. I also find that the Commissioner has suspended the licence as a disciplinary measure and the enquiry is still pending against the Customs House Agents. In case of Commissioner of Customs (General) v. Worldwide Cargo Movers - in paragraph 28 of the judgment of Bombay High Court has observed as under :-
“In our view, the Tribunal has committed a grave error in interfering with the decision of a domestic authority. In a departmental proceeding one has to see whether the principles of natural justice are followed and the findings are justified from material on record. Once both these aspects are satisfied if an outsider Tribunal interferers, its findings and order will be improper and perverse which is what has happened in the present case, Similarly, when one comes to the disciplinary measures, one must not lose sight of the fact that the appellant-Commissioner of Customs is responsible for happenings in the Customs area and for the discipline to be maintained over there. If he takes a decision necessary for that purpose, the Tribunal is not expected to interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or his employees. The decision is best to be left to the disciplinary authority save in exceptional cases where it is shockingly disproportionate or mala fide. That is not the case here”.
Following the ratio of the Bombay High Court I am of the view, the Tribunal should not interfere with the decision of Commissioner of Customs pending inquiry with him.
17.1 The Hon’ble High Court of Andhra Pradesh in the case of CC&CE, Hyderabad v. H.B. Cargo Services [ (AP)] dealing with a case wherein the CHA had signed blank shipping bills to exporters for a consideration of Rs. 150 per bill held as follows :-
“15. While the punishment imposed on the CHA has to be commensurate with the gravity of the proved acts of mis-conduct as, on revocation of his licence, the CHA would suffer, it must not be lost sight of that, though it is the right of a citizen to carry on his business or profession, it is subject to reasonable restrictions and conditions, which, in the present case, are stipulated under the CHALR. As noted herein above, blank shipping bills were issued by the partner and authorized representative of the CHA for a consideration of Rs. 150/- per shipping bill. In cases involving corruption there can not be any punishment lesser than the maximum, i.e., revocation of the licence. No other lesser punishment can be contemplated in such cases. Any sympathy shown in such cases is totally uncalled for and opposed to public interest. The consideration received for the act of misconduct may be small or large. It is the act of corruption that is relevant, and not the quantum involved in such acts.”. (emphasis supplied)
17.2 In the OTA Kandla Pvt. Ltd. v. UOI - , the Hon’ble High Court of Gujarat was considering a case of sub-letting of licence, non-maintenance of statutory records, obtaining customs pass for non-employees, etc. While upholding the revocation of CHA licence, the Hon’ble High Court held as follows :-
“14. In view of the above principles laid down by the Hon’ble Supreme Court in various judgments, it clearly transpires that the judicial review of administrative action or of proportionality of punishment is permissible only if the decision of the decision maker is found to be illegal, unreasonable, irrational or suffering from any procedural impropriety, and that the High Court in exercise of jurisdiction under Article 226 or 227 should not interfere with the legal orders of Administrative Authorities. So far as the facts of the present case are concerned, as stated hereinabove, respondent no. 3, the CEGAT has upheld the order of respondent no. 2, revoking the licence of the petitioner as CHA on the ground of petitioner having committed breach of statutory regulations and the misconduct by misusing its licence. In the opinion of this Court, once the decision of the respondent authorities that the petitioner committed violation of statutory regulations and the misconduct is found to be within the legal parameters, all the legal consequences as a result of such violation and the breach have to follow. The case of the petitioner being the case of contravention of said regulations and misuse of licence as CHA, the respondent authorities have rightly revoked the licence of the petitioner. The said decision having been arrived by the respondents, after taking into consideration all the relevant material and the said Regulations, and after following the due process of law, it could not be said that the said decision was illegal, unreasonable, perverse or irrational. Under the circumstances, it could also be not said that the punishment of revocation of licence was a harsh punishment or the punishment de hors the doctrine of proportionality. The petitioner having failed to point out any perversity or unreasonableness on the part of the respondent Authorities warranting judicial intervention, this Court does not find any merits in the present petition.”
In view of these judgments of the Andhra Pradesh High Court and Gujarat High Court the Commissioner of Customs has rightly suspended the licence of the CHA appellant.
18. In view of above, I uphold the Order-in-Original No. 15/2012, dated 18-6-2012 and reject the stay petition and appeal.
(Pronounced in Court on………………..)
| | | Sd/- (Sahab Singh) Member (Technical) |
Stay Application No. C/S/1373/12 Appeals No. C/528/12
19. As there is a difference of opinion between the Members of the Bench, therefore, the matter is placed before the Hon’ble President to refer it to a 3rd Member to decide the issue on the following points :-
DIFFERENCE OF OPINION
Whether the timeframe prescribed under Regulation 20 is to be followed strictly as held by the Member (Judicial),
Or
is to be interpreted liberally as discussed by the Member (Technical) in Para 6.2 of his order.
20. Whether the timeframe work as prescribed under the guidelines issued by C.B.E. & C. through Circular No. 09/2010, dated 8-4-2010 are to be followed strictly by the Licensing authority or not?
21. Whether the appellants are required to file a separate appeal against the order passed by the Licensing authority on 23-5-2012 as held by the Member (Technical) or not?
22. In view of the amended provision of Regulation 20 and the guidelines issued by the C.B.E. & C. dated 8-4-2010, whether the Member (Judicial) is correct on arriving at the decision to set aside the impugned order relying on the orders passed by the Tribunal in the case of Om Freight Forwarders Pvt. Ltd. (supra), Sunil Bhatia (supra) and Kamal Sehgal (supra).
Or
Member (Technical) is correct in upholding the impugned order relying on the decision in the case of Worldwide Cargo Movers (supra), H.B.Cargo Services (supra) and OTA Kandla Pvt. Ltd. (supra).
(Order pronounced on 10-7-2012)
| Sd/- (Sahab Singh) Member (Technical) | | Sd/- (Ashok Jindal) Member (Judicial) |
23. [Per : S.S. Kang, Vice-President]. - Following difference of opinion has been referred to the third Member :
“Whether the timeframe prescribed under Regulation 20 is to be followed strictly as held by the Member (Judicial),
Or
Is to be interpreted liberally as discussed by the Member (Technical) in para 6.2 of his order.
Whether the timeframe work as prescribed under the guidelines issued by C.B.E. & C. through Circular No. 09/2010, dated 8-4-2010 are to be followed strictly by the Licensing authority or not?
Whether the appellants are required to file a separate appeal against the order passed by the Licensing authority on 23-5-2012 as held by the Member (Technical) or not?
In view of the amended provision of Regulation 20 and the guidelines issued by the C.B.E. & C. dated 8-4-2010, whether the Member (Judicial) is correct on arriving at the decision to set aside the impugned order relying on the orders passed by the Tribunal in the case of Om Freight Forwarders Pvt. Ltd. (supra) Sunil Bhatia (supra) and Kamal Sehgal (supra).
Or
Member (Technical is correct in upholding the impugned order relying on the decision in the case of Worldwide Cargo Movers (supra), H.B. Cargo Services (supra) and OTA Kandla Pvt. Ltd. (supra).”
24. Heard both sides.
25. The appellant filed this appeal against the impugned order dated 18-6-2012 passed by the Commissioner of Customs (General), Mumbai. Brief facts of the case are that the appellant is a Custom House Agent (CHA) and is governed by the provisions of Custom House Agents Licensing Regulations, 2004 (CHALR, 2004 for short). As per Regulation 22 of the CHALR, 2004, the Commissioner of Customs (General) in appropriate cases where immediate action is necessary within 15 days from the date of receipt of a report from investigating authority, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated. As per the appellant, in the present case, the Commissioner of Customs suspended the licence vide order dated 23-5-2012 and offered an opportunity for post decisional personal hearing on 5-6-2012 and after granting post decisional hearing, the present impugned order is passed by the Commissioner of Customs (General) and held as under :
“I, hereby order that the suspension of the CHA Licence No. 11/247 of M/s. Sharp Logistics Private Limited, is hereby continued pending inquiry against the CHA under under Regulation 22 of CHALR, 2004.”
26. The appellant challenged this order by way of filing the present appeal.
27. Now I take up the difference of opinion in respect of the issue whether the appellant is required to file separate appeal against order dated 23-5-2012 as held by Member (Technical) or not?
28. I find that Regulation 20 of the CHALR, 2004 provides that where the licence is suspended under sub-regulation (2) notwithstanding the procedure prescribed under Regulation 22, the Commissioner of Customs may within 30 days from the date of such suspension gave a personal hearing to the Customs House Agent whose licence is suspended as he may deem fit or rejecting the order continuing it, as the case may be, within 15 days from the date of hearing granted to the Customs House Agent.
29. In the present case, vide order dated 23-5-2012, the licence was suspended by the Commissioner of Customs and also afforded an opportunity of post decisional hearing and thereafter order dated 18-6-2012 was passed. In these circumstances, the order dated 23-5-2012 is merged with order dated 18-6-2012 which is under challenge. Hence it cannot be said that the appellants are required to file separate appeal against the order passed by the licensing authority dated 23-5-2012. The question is answered accordingly.
30. Now I take up the other issues together.
31. The main contention of the appellant is that the Inquiry Report was received in the month of April 2012 and even it is considered that the investigating agency’s report has been received on 30-4-2012, the order dated 23-5-2012 is passed beyond the period prescribed under Regulation 20(2) of the CHALR, 2004. Hence the order is not sustainable.
32. It is also submitted that as per the provisions of CHALR, 2004 Regulations in case licensing authority feels it necessary the licence is to be suspended immediately and in the present case the investigation took place in December 2010 and the investigation report was received by the Commissioner in April 2012 and the licence has been suspended on 23-5-2012. Hence the order of suspension is beyond the time-limit prescribed for taking immediate necessary action as provided under Regulation 20(2) of the CHALR, 2004.
33. The contention of the Revenue is that the report of investigating agency was put to the Commissioner on 10-5-2012 and the Commissioner of Customs on the same day agreed with the opinion of the investigating agency to suspend the licence. Hence the order for suspension of the licence is passed on file on 10-5-2012 which is within 15 days from the receipt of the report of the investigating agency.
34. The Revenue relies upon the decision of the Larger Bench of the Tribunal in the case of CC v. Standard Pencil Pvt. Ltd. reported in (Tri.-LB), the decision of the Hon’ble Supreme Court CC v. MM Rubber Co. reported in (S.C.) and the order dated 11-2-1997 passed by the Hon’ble Supreme Court in the case of A.P. Khadi and Village Industries v. R. Radhakrishnamurthy to submit that date of order passed on the file is to be taken as date of order though the order was served subsequently on the affected party.
35. I have perused the records produced by the Revenue. The investigation report is received in the office of the Commissioner of Customs, though addressed to the Deputy Commissioner on 25-4-2012. The proposal was put up to the Commissioner of Customs (General) to suspend the licence of the appellant and to initiate regular inquiry. The Commissioner of Customs, approved the proposal on 10-5-2012 and thereafter the impugned order is passed. Now the issue before me is whether the acceptance of proposal to suspend the licence on the noting portion of the file is an order suspending the licence. I find that this issue had come up before the Hon’ble Kerala High Court in Government Wood Works v. State of Kerala reported in 1988 (69) STC 62 Ker. The Hon’ble High Court after relying on the decision of the Hon’ble Supreme Court in the case of Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer - (1962) 1 SCR 676, Bachhittar Singh v. State of Punjab AIR 1963 SC 395, State of Punjab v. Khemi Ram - AIR 1970 SC 214 has held as under :
“Any authority on which power is conferred, the exercise of which power would affect the rights of parties, is to communicate its order to the party against whom the order would operate. The mere preparation of an order or even keeping the order signed in the files of the office would not render it an effective order, an order which is operative. The exceptions are cases where there is requirement of pronouncing the orders and they are pronounced on notified dates. Then respective of the actual presence or otherwise of the parties, notice to the parties is assumed. In other cases, if the authority making the order fails to communicate the order, the order could not be said to have been made, for communication of such order is an essential part of making such order. This is naturally so, for any authority who writes out an order and signs it is free to change it at any time before it is communicated. It is not final at all, for the authority may become wiser on information supplied to it or otherwise and may choose to change the order at any time before it is dispatched to the party against who it operates...
9. The order of any authority cannot be said to be passed unless it is in some way pronounced or published or the party affected has the means of knowing it. It is not enough if the order is made, signed, and kept in the file, because such order may be liable to change at the hands of the authority who may modify it or even file, because such order may be liable to change at the hands of the authority who may modify it or even destroy it, before it is made known, based on subsequent information, thinking or change of opinion. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein. This should be done within the prescribed period though the actual service of the order may be beyond that period.”
36. I find that as the provisions of Regulation 20(2) of CHALR, 2004, the suspension order is to be passed within 15 days from the date of receipt of the report of investigating agency. From the records produced by the Revenue, I find that the report of the investigating agency was received on 25-4-2012 and the proposal to suspend the licence was put up before the Commissioner of Customs and the proposal was approved on 10-5-2012. From the record, further, I find that the draft suspension order in respect of the CHA is prepared and it was put to the Deputy Commissioner on 18-5-2012 and thereafter put to the Additional Commissioner on 21-5-2012 and ultimately signed by the Commissioner of Customs on 23-5-2012. The order portion reads as under :
“I, therefore, in exercise of powers conferred under the provisions of Regulation 20(2) of CHALR, 2004 order suspension of the operation of the CHA Licence No. 11/247 of M/s. Sharp Logistics Private Limited, with immediate effect pending inquiry under Regulation 22 of CHALR, 2004.”
37. The decisions relied upon by the Revenue are to the effect that in case the order is passed on file the relevant date of the order when the same is passed and not when the order is issued. This argument is to be tested on the facts on record in the present case. In the present the Commissioner of Customs agreed with the proposal to suspend the licence whether it can be considered as an order passed by the Commissioner suspending the licence on 10-5-2012. I find that, the proposal, on the basis of the report of the investigating agency, to suspend the licence is approved by the Commissioner meaning thereby that a decision has been taken by the Commissioner of Customs to suspend the licence but the order was not passed on 10-5-2012.
38. The provisions of Regulation 20(2) of the CHALR, 2004 provides that where immediate action is required, the Commissioner of Customs within 15 days from the date of receipt of report from the investigating agency suspending the licence of the CHA. From the record, I find that even the draft suspension order was placed before the Commissioner after 10-5-2012 and the same was ultimately signed on 23-5-2012. Hence the order suspending the licence is only passed on 23-5-2012. On the basis of these facts, I find no merit in the contention of the Revenue that the order of suspension was passed on 10-5-2012 i.e. 15 days after the receipt of the report of the Investigating Agency, hence is passed in violation of the provisions of Regulation 20(2) of the CHALR, 2004.
39. In view of the above discussion, I agree with the view taken by Member (Judicial) that impugned order is not sustainable hence set aside.
40. Registry is directed to place the matter before the Regular Bench for passing appropriate order.
(Order pronounced on 31-7-2012)
| | | Sd/- (S.S. Kang) Vice-President |
41. In view of the majority decision, the impugned order is set aside and the appeal is allowed with consequential relief.
| Sd/- (Sahab Singh) Member (Technical) | | Sd/- (Ashok Jindal) Member (Judicial) |