By TIOL News Service

CHENNAI, MAY 20, 2015: FOR certain irregularities alleged to have been committed by the petitioner CHA as reported by Air Cargo Intelligence Unit (ACIU), Chennai, while exercising her power under Regulation 19(1) of CBLR, 2013, the respondent Commissioner, by proceedings dated 31.7.2014, has suspended the operation of customs broker license of the petitioner and thereafter, after affording a personal hearing to the petitioner and on considering the objections filed by the petitioner, by proceedings, dated 28.8.2014, ordered continuation of suspension that was made on 31.7.2014. Thereafter, on 8.9.2014, a show cause was issued by the respondent under Regulation 20(1) of CBLR, 2013, appointing an Enquiry Officer to conduct an enquiry into the charges levelled against the petitioner for alleged failure to fulfill the obligations cast upon the petitioner under Regulations 10, 11(a), 11(e), 11(n) and 11(d) of CLR, 2013 and alleged professional mis-conduct while acting as a Customs Broker.

The Petitioner challenged the suspension of licence and also the Show Cause Notice on various grounds. After hearing both sides, the High Court held:

The alleged contravention took place as early as between January 2008 and September 2009 and the goods were assessed and cleared by the customs authorities by accepting the documents submitted by the importer and the petitioner being the Customs Broker, on behalf of the importer, presented the same. Only in the year 2014, i.e. after lapse of more than five years, the proceedings of suspension were initiated. As could be seen from the Regulation 19(1), it is clear that only in appropriate cases where immediate action is necessary against the customs broker, the licence of the broker has to be suspended. It is pertinent to note that except the irregularities alleged to have been committed by the petitioner in the year 2008, there were no adverse report against the petitioner that the petitioner has repeatedly involved in such irregularities between 2009 to 2014. On a careful scrutiny of the entire facts and in view of the fact that even the respondent herself initiated the proceedings that too after a lapse of five years and also the fact that the petitioner was allowed to act as a licensed Broker till 2014, in the present case, immediate action is not required so as to invoke the Regulation in order to suspend the licence.

With regard to validity of the Show Cause Notice, the Court held:

A perusal of the Show Cause Notice makes it clear that the respondent has categorically come to the conclusion that the Customs Broker failed to fulfill the obligation cast upon them under the regulations mentioned to therein and committed professional misconduct, while acting as custom broker. In the present case, the emphasized portion contained in the impugned show cause notice, would clearly indicate that the respondent has predetermined the issue. Having followed the judgments of the Supreme Court, this Court is of the view that the impugned show cause notice, wherein, the usage of the words, viz., "it was concluded that the Customs Broker failed to "would clearly indicate predetermination by the respondent regarding the failure on the part of the petitioner in respect of the obligations cast upon them under the Regulations as well as committal of professional mis-conduct by the petitioner and therefore, on this ground, the impugned show cause is liable to be set aside. (para 17&22)

Thus, the High Court allowed the Writ Petitions with a direction to the respondent to permit the petitioner to operate their customs broker licence and to issue fresh Show Cause Notice.

(See 2015-TIOL-1290-HC-MAD-CUS)