By TIOL News Service

MUMBAI, OCT 18, 2015: THE Petitioner is a subsidiary of TNT Express N V .

Theyare in the business of distribution of freight and parcels and have obtained authorisation/registration as authorised courier under the Courier Imports and Exports (Clearance) Regulations, 1998.

On 9th September, 2015, the SIIB of Airport Security Customs visited the courier cell and an import consignment declared to be containing “spare piston rings” was examined and it was found to be containing parts weighing 2620 grams made by gold and covered in silver cover. The Petitioner was found to have presented the relevant documents, including the bill of entry in relation to this consignment. The Petitioner had obtained the “Know Your Customer” (KYC) documents from Mr. Nilesh Phapale, the proprietor of the importer firm. The relevant documents were also scrutinized and it was found that certain addresses were given of Mumbai and Thane Districts but investigation found that the premises do not belong to the proprietor of the importer firm.

The long and short of the investigation is that an order has been passed on 1 st October 2015 invoking Regulation 14 of the 1998 Regulations and suspending the registration granted to the petitioner.

The courier company is before the Bombay High Court seeking relief and informing the Bench that for similar case and for detention of the goods in the month of May, 2015, a show cause notice dated 20th May, 2015 came to be issued and the allegations in the notice have been duly replied on 22nd July, 2015;that there was a personal hearing held in August, 2015, but no order was passed in pursuance of this show cause notice.

Nonetheless, for the subject violation and breach in September, 2015, the impugned suspension order has been passed.

The only contention is that the order invokes Regulation 14 and the revocation cannot take place unless a notice has been issued to the authorized courier informing him the ground on which it is proposed to revoke the registration and giving an opportunity of making representation in writing and a further opportunity of being heard in the matter, if so desired.

Even otherwise, this drastic action was unjustified in the case of the Petitioner, as the Principal Commissioner was yet to pass an order in furtherance of the show cause notice dated 20th May, 2015, though personal hearing was held long time back.

The counsel for the Revenue, apart from urging that there is an alternate remedy of a representation under sub-Regulation (2) of Regulation 14, submitted that the allegations are too serious and in the circumstances, if drastic order was required to be passed to stop the incidents of this nature, then, the discretion exercised cannot be termed as arbitrary or unreasonable much less capricious, calling for intervention in Writ Jurisdiction.

The High Court reproduced Regulation 14 of Courier Imports and Exports (Clearance) Regulations, 1998 titled ‘De-registration' and after perusing the same observed -

++ In the present case, on the own showing of the Respondents, for the second incident of smuggling of gold and allegedly on 8th September, 2015, there is no show cause notice or notice proposing revocation within the meaning of Regulation 14. The first proviso, thus, is not complied with. There is thus no communication informing the ground on which it is proposed to revoke the registration. Rather, there is no proposal presently to revoke the registration.

++ Without any such proposal before the Commissioner nor he directing issuance of any notice within the meaning of the first proviso, he has chosen to suspend the authorisation/registration of the Petitioner. We do not see why, if the incident is so clear and if all the details are allegedly obtained and the breach or violation of the Petitioner is apparent to the Principal Commissioner that, no notice has been issued.

++ We do not think that in the given facts and circumstances and after having kept the earlier show cause notice pending and passing no orders thereon, was the Principal Commissioner justified in suspending the registration of the Petitioner.

Holding that the order of suspension, impugned in the Petition is illegal and unsustainable, the same was quashed and set aside.

The Petition was allowed.

(See 2015-TIOL-2416-HC-MUM-CUS)