Cus - Appellant had failed to appoint Regulation 8/9 qualified employee before expiry of broker licence - As licence had already expired, it did not remain an issue of being non-operative, it was matter of licence becoming non est: CESTAT
By TIOL News Service
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MUMBAI, JAN 12, 2016: THE appellant held a Customs Broker Licence which was valid till 31.12.2013. Their employee, a Regulation 8 qualified employee, based on which the Custom Broker (CB) Licence was operational, resigned on 6.6.2012. As the company could not employ another Regulation 8/9 qualified person for some time, the Commissioner made the licence inoperative on 22.1.2013. As the CB licence expired on 31.12.2013 and the company could appoint another qualified Regulation 9 person and inform the Customs on 4.3.2014 only, the Commissioner vide impugned order dt. 24.7.2014 rejected the request of the appellant to renew the License. The Commissioner while arriving at such conclusion observed that the appointment of the new person was done on 1.3.2014 when the License was nonest. Furthermore, the Commissioner also held that no case was made out for renewal of licence under Regulation 9(2) of CBLR 2013 since the performance of the licensee was not satisfactory on account of non-operational business.
Before the CESTAT, the appellant submitted that the ground for making the license inoperative was that the employee had only resigned and not retired and renewal of license under Regulation 13(2) is made only on the death or retirement of such person. It is further submitted that the word "retirement" includes the word 'resign'. While relying on the decision in Gannon Dunkerley & Co. Ltd. - 2008-TIOL-56-HC-MUM-CUS the appellant added that under CBLR 2013, Regulation 13(2) allows a two-year period to the company from the date of demise/retirement to appoint any other person but in their case the period of two years had not expired and the license was made inoperative by the Commissioner even before the expiry of license i.e. 31.12.2013. Moreover, the company was non-operational for lack of business relating to mining activity which was banned by the Supreme Court.
The AR while reiterating the findings of the Commissioner adverted to the Bombay High Court decision in S.R. Sale & Co. - 2013-TIOL-455-HC-MUM-CUS wherein it is held that appeal is not maintainable against an order of prohibition under Regulation 21 (now 23) and appeal is maintainable to the Tribunal only against suspension or revocation of the licence under Regulation 20.
The Bench observed -
++ Section 146 (2) of the Customs Act provides that the Board may make Regulations in respect of Custom House Agent and in particular Section 146(2)(f) states that such regulations made provide for appeals against an order of suspension or revocation. The regulations are a self-contained code for the operation of Custom House Agents. In the present case, the appeal relates to renewal of a license which is an administrative matter dealt with by the Commissioner. This case does not fall under the Regulation 9(2) for renewal of license because the license was no more valid after 31.12.2013.
++ If the renewal of a license could be made a matter of appeal before the Tribunal then even the grant of licence which is an administrative function could well become a matter against which appeal would lie to the Tribunal. Extending this reasoning further, even the conduct of examinations for grant of a CHA License could then be a subject matter of appeal before the Tribunal. Certainly the framers of the Statute did not envisage this. Therefore, the statute under Section 146(2)(f) limits the scope of appeals only in case of suspension or revocation of a license. [S.R. Sale & Co. - 2013-TIOL-682-HC-KAR-CUS relied upon]
++ The reliance placed by the Ld. Counsel in the case of Gannon Dunkerley & Co. Ltd. - 2008-TIOL-56-HC-MUM-CUS is not acceptable as that case was on a different footing. It related to operation of the license when the qualified person of the Customs Broker was available. The case did not relate to a license which had already expired as in the present case.
++ In the present case the appellant had failed to appoint a Regulation 8/9 qualified employee before the expiry of the licence. As the licence had already expired it did not remain an issue of being non-operative, it was a matter of licence becoming nonest as held by the Commissioner. Therefore we do not find any fault in the order of the Commissioner.
The appeal was held to be not maintainable.
(See 2016-TIOL-125-CESTAT-MUM)
