By TIOL News Service

MUMBAI, AUG 13, 2018: BY an order dated 11 July 2018 passed by the Commissioner of Customs (General), JNCH, Nhava Sheva under regulation 15 of the CBLR, 2018, the appellant has been prohibited from functioning in Mumbai Customs Zone - II for a period of one month for allegedly having failed in fulfilling obligations devolving on them as customs broker in the handling of goods entered for export vide shipping bill dated 05.02.2018.

The Customs broker is in appeal before the CESTAT and contends that the immediacy warranting prohibition did not exist as the alleged incident occurred five months before and that no opportunity had been granted to them to be heard in their defence.

The AR questioned the maintainability of this appeal before the Tribunal and posited three pillars to support this contention viz. that the impugned order is administrative in nature and, hence, beyond the scope of section 129A of Customs Act, 1962 which, in the context of Commissioner of Customs, is limited to adjudication orders; that the appellate mechanism envisaged in regulation 19 of Customs Broker Licencing Regulations, 2018 is limited to orders of suspension and revocation of licences; that writ remedy alone is available to the broker who is aggrieved by an order of prohibition.

When the appellant adverted to the decision in Eastern Clearing and Forwarding Agency Pvt. Ltd v. Commissioner of Customs (General) [final order no. A/86472/2018 dated 23May 2018 in appeal no. C/85612/18] directing that the order of prohibition be revoked for not having complied with principles of natural justice, the AR placed reliance on the decisions in SNM Agency - 2014-TIOL-333-CESTAT-MUM and Naresh Jaisingh - 2015-TIOL-2707-CESTAT-MUM and submitted that the Bench did not have the benefit of these orders else the appeal would have been dismissed in limine .

The Bench took note of the decision in Eastern Clearing and Forwarding Agency Pvt. Ltd which considered the order of the Delhi High Court in Harjeet Singh Johar - 2017-TIOL-1020-HC-DEL-CUS and after distinguishing the decisions cited by the AR adverted to the apex court decision in Commercial Tax Officer vs. Binani Cements Ltd. - 2014-TIOL-15-SC-CT and observed thus -

++ Too much significance should not be attributed to the reference to section 129A of Customs Act, 1962 in regulation 19. It is akin to attachment of a railway wagon at a wayside station for detachment at another wayside station; that wagon does not become the train which has a source and destination of its own just as the attached wagon has.

++ Undoubtedly, Regulation 15 of Customs Broker Licensing Regulations, 2018 is silent on the redressal available. There is no provision for representation to higher executive authority. There is no oversight by some other executive agency.

++ Though regulation 19 of Customs Broker Licencing Regulations, 2018 specifies that a customs broker may seek relief in appeal to the Tribunal against orders under regulation 16 or 17 which, according to Learned Authorized Representative, excludes appeals against prohibition under regulation 15, when read with the power to frame regulation vested by section 146(2) of Customs Act, 1962, it is anathema that authority conferred by statute can even be claimed to be capable of being exercised without any accountability or redressal.

++ If section 146(2), the parent provision, is perceived as restricting appeals to the specified detriments of suspension or revocation of licence, surely the insinuation of the third detriment, as it undoubtedly is, of prohibition, should conversely not have found a place in the Regulations without specific enablement in law. If it is claimed that the generality of section 146 (2) of Customs Act, 1962 condones the presence of the third detriment, the existence of remedy cannot, for similar reasons, be denied.

++ If the lack of remedy were to be upheld, we would be abetting in perpetuation of unbundled executive power without any accountability and it goes against our grain to be accomplices in such a transgression of the principles of natural justice.

++ That suspension is a prelude to proceedings for revocation is not in doubt and that prohibition does carry with it the potential of suspension is explicitly acknowledged. Most importantly, the odium of detriment pervades all three. The sole appellate mechanism acknowledged in the Regulations is the Tribunal and, in the absence of any alternative, the Tribunal is the appropriate appellate remedy.

++ The impugned order makes no express mention of satisfaction that prohibition was necessary in the said circumstances. On the contrary, the a priori conclusion appears to be mere replication of an investigative opinion - not of the Commissioner - and there is a certain thriftiness of expression that implies lack of consideration of the whole. The lapse of time between the incident and prohibition erases the immediacy that is a pre-requisite for resort to the detriment.

++ Prohibition is to be imposed for non-fulfillment of obligation in carrying out functions in a section (or sections) of the customs station. And the prohibition is to be restricted to that section (or sections) of the customs station. It cannot extend to the entire zone as the impugned order does.

++ Not only is this a clear example of lack of application of mind to the circumstances of alleged non-fulfillment but also a clear demonstration of overreach beyond the limits of empowerment. The correct implementation of this provision may require the authority concerned to obtain from archival record a comprehension of the structural division of customs houses.

The impugned order of prohibition was set aside.

(See 2018-TIOL-2501-CESTAT-MUM)