Indira Banerjee, J.@mdashIn this writ application, the petitioners have inter alia challenged an order being Establishment Order No. 130/2009 dated 12th May, 2009 issued by the Commissioner of Customs, (Airport & Administration) being the respondent No. 2, suspending the Customs House Agent''s Licence issued to the petitioner No. 1, in exercise of power conferred by Regulation 20(2) of the Customs House Agent''s Licensing Regulations, 2004, hereinafter referred to as the 2004 Regulations.
2. The petitioners carry on business inter alia as Customs House Agents. On or about 18th September, 1998 the Commissioner of Customs (Administration) issued a Customs House Agent''s Licence to the petitioner under Regulation 8 of the Customs House Agent''s Licensing Regulation, 1984, hereinafter referred to as the 1984 Regulations. The said licence was valid for a period of five years.
3. The said licence has from time to time been renewed. In the meanwhile, the 1984 Regulations have been superseded by the 2004 Regulations, which came into force with effect from 23rd February, 2004.
4. According to the petitioners, the petitioners in ordinary course of business handled the export consignments of one M/s. Jai Bishnu Niketan Pvt. Ltd., a private limited company having its registered office at 132/1 Mahatma Gandhi Road, Kolkata - 700007.
5. It is alleged that on the basis of export documents, that is, invoice, packing list and other documents sent by the exporter, the petitioners prepared five shipping bills for export of synthetic fabrics to Bangladesh. Of the five consignments, one was sought to be exported subject to submission of Letter of Credit and others on "Delivery Against Payment Basis".
6. Similarly, the petitioners handled the export consignments of one M/s. A.S. Traders represented by Sri Ashok Kumar Das. The petitioners prepared four shipping bills on the basis of documents made over to the petitioners. Of the four consignments, one was to be exported upon submission of Letter of Credit and the others on Delivery Against Payment Basis.
7. According to the petitioners, the consignments of both the exporters, M/s. Jai Bishnu Niketan Pvt. Ltd and M/s. A.S. Traders were examined by the Customs House Authorities, who duly endorsed the shipping bills and gave permission for export.
8. However, before actual export could take place, Officers of the Directorate of Revenue Intelligence, Siliguri Unit, intercepted and seized the consignments on 10th January, 2009 along with the vehicles carrying the same.
9. The Officers of the Directorate of Revenue Intelligence Authority apparently seized fictitious rubber stumps, unsigned invoice and packing list from one Subhojit Karmakar, who according to the petitioners, is not an authorized employee of the petitioners. No search or seizure was, according to the petitioners, made at the office of the petitioners at 26, Karl Marx Sarani, Kolkata.
10. On or about 14th May, 2009, the petitioners received the impugned order suspending the Customs House Agent''s Licence of the petitioner No. 1 in exercise of powers conferred by Regulation 20(2) of the 2004 Regulations with immediate effect.
11. By the said impugned notice/order, the petitioners were informed that formal proceedings for revocation of the licence were being initiated separately under Regulation 20(1)(c) read with Regulation 22 of the 2004 Regulations.
12. In the impugned order, it was inter alia alleged as follows:
In course of investigation it was noticed that barring few exceptional circumstances, import of goods into Bangladesh is only allowed against LCS (Letter of Credit Authorization) from the competent authority accompanied by Irrevocable Letter Credit (L/C). Thus it appears that any payment received on account of export made to Bangladesh other than through Irrevocable Letter of Credit becomes an illicit way of receiving export proceeds.
Investigation reveals that the exporters in connivance with the representatives of CHA are preparing duplicate set of export documents, one for submission before Indian Customs and another for the Bangladesh Customs. The value as well as quantity of the goods to be exported is manipulated in the Invoices and Packing List for the purpose of misleading Indian Customs authority. The signatures and rubber stamps of Indian Customs officers are replicated and used to give an authentic look to the export documents.
Enquiry caused with bank reveals that the remittances which are being claimed to be export proceeds are in fact coming from entities other than the foreign buyers/consignees and from destinations other than the importing country and are found to be in no way related to the exports made to Bangladesh under DA. Against one such exporter, remittances against DA has not been made so far as confirmed by negotiating bank who also failed to correlate the export proceeds, wherever received, with individual export consignments.
From the above, it appears that the CHA M/s. Ocean Shipping & Clearing Agency in connivance with the exporter is availing DEPB benefits by way of gross overvaluing their export consignments and have thereby violated the provisions of Regulations 13(a), 13(d), 13(c), 13(j) and 13(k) of the CHALR'' 2004.
And whereas an inquiry is contemplated against the said CHA under Regulation 22 of the CHALR''2004 in the above matter, and after examining the aforesaid matter, it appears the continuance of transacting business by the CHA M/s. Ocean Shipping & Clearing Agency is prejudicial to the interest of Revenue and immediate action is warranted to prevent further misuse of the CHA licence.
13. For the sake of convenience Regulations 20, 21 & 22 of the 2004 Regulations are extracted herein below:
Regulation 20. Suspension or revocation of licence. - (1) The Commissioner of Customs may, subject to the provisions of Regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely:
(a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under Regulation 10;
(b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else;
(c) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station.
(2) Notwithstanding anything contained in Sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate- action is necessary, suspend the licence of a Customs House Agent where- an enquiry against such agent is pending or contemplated.
Regulation 21. Prohibition. - Notwithstanding anything contained in Regulation 22, the Commissioner of Customs may prohibit any Customs House Agent from working in one or more sections of the Customs Station, if he is satisfied that such Customs House Agent has not fulfilled his obligations as laid down under Regulation 13 in relation to work in that section or sections.
Regulation 22. Procedure for suspending or revoking licence under Regulation 20. - (1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit, within such time as may be specified in the notice, not being less than forty-five days, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs House Agent desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.
(2) The Commissioner of Customs may, on receipt of the written statement from the Customs House Agent, or where no such statement has been received within the time-limit specified in the notice referred to in Sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent.
(3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs House Agent, for the purpose of ascertaining the correct position.
(4) The Customs House Agent shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing.
(5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording his findings.
(6) The Commissioner of Customs shall furnish to the Customs House Agent a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and shall require; the Customs House Agent to submit, within the specified period not being less than sixty days, any representation that he may with to make against the findings of the Deputy Commissioner of Customs or Assistant Commissioner of Customs.
(7) The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs House Agent, pass such orders as he deems fit.
(8) Any Customs House Agent aggrieved by any decision or order passed under Regulation 20 or Sub-regulation (7) of Regulation 22, may prefer an appeal u/s 129A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under Sub-section (1) of Section 129 of the Act.
14. Counsel appearing on behalf of the petitioners relied on an unreported judgment of a Single Bench of this Court dated 25th March, 2008 in W.P. No. 195 of 2008 (Mishra & Mishra Agencies Enterprises and Anr. v. Union of India and and Ors.), the judgment and order dated 16th January, 2008 in W.P. No. 8 of 2008 (Indian Merchantile Agency and Ors. v. Commissioner of Customs (Administration) Kolkata and Ors.), the judgment dated 13th March, 2009 in Hindustan Shipping Agency and Anr. v. Union of India Ors. and an order dated 8th June, 2005 in W.P. No. 1249 of 2005 (Good hope Clearing and Forwarding Pvt. Ltd. and Anr. v. Commissioner of Customs (Administration) and Ors.
15. In Mishra & Mishra (Agencies) Enterprises and Anr. (supra) and Indian Merchantile Agency and Ors. the Court held that the requisites of Regulation 22 were to be complied with for exercise of power vested under Regulation 20(2).
16. In Goodhope Clearing and Forwarding Pvt. Ltd. (supra) the Court set aside an order of suspension on the ground of non-compliance with the requisites of Regulation 22. In Hindustan Shipping Agency and Anr. (supra) the Court held as follows:
Regulation 20(1) deals with ''revocation'' of licence and Sub-regulation (a), (b) and (c) of the Regulations deal with the grounds on which a licence can be revoked. Regulation 20(2) confers power on the Commissioner of Customs to ''suspend'' the licence of a Customs House Agent where immediate action is necessary. Interestingly power of suspension of licence "where immediate action is necessary", is under Regulation 20 which, as title indicates, deals with ''Suspension or revocation of licence". Though it starts with a non-obstante clause and is an independent provision, Regulation 20(2) does not lay down the procedure to be followed by the authority following immediate suspension. Therefore, as no procedure has been enumerated following immediate suspension, answer, if any, has to be found from the Regulations itself. Regulation 22 which deals with the "procedure for suspending or revoking licence under Regulation 20", provides the answer. Regulation 22(1) provides the procedure for suspending the licence of an agent. Hence, as Regulation 20(2) does not lay down the follow up procedure, the procedure under Regulation 22 is to be followed. Regulation 22 postulates "The Commissioner of Customs shall issue a notice in writing to the Customs Agent slating the grounds on which it is proposed to suspend". "The licence and requiring the said Customs House Agent to submit, within such time as may be specified in the notice, not less than forty five days, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him a written statement of defence and also to specify in the said statement whether the Customs House Agent desires to be heard in person." Thus, as seen, the agent is not only by notice should be informed of the grounds of suspension but at the same time he should be granted opportunity to submit a written statement of defence "within such time as may be specified in the notice". The words "and requiring the said Customs House Agent to submit" "a written statement of defence" is a pointer to that effect. The language of Regulation 22(1), as evident, is plain and unambiguous. The act of immediate suspension of an agent under Regulations 20(2) and the procedure under Regulation 22(1) are inseparable and cannot be read in isolation. Since an action by the authorities under Regulation 20(2) does not provide a remedy, procedure under Regulation 22, as noted, is to be followed. Otherwise it would enable the authority to suspend an agent with immediate effect for an indefinite period thus giving an uncontrolled and unguided power to the State.
17. Counsel appearing on behalf of the respondent, however, submitted and rightly that provisions of Regulation 22 cannot be read into Regulation 20 Sub-regulation (2) which provides for immediate suspension.
18. In
19. In Orient Clearing and Forwarding Agency v. Union of India reported in 2001 (136) E.L.T. 3 (Cal.) cited by the respondents, a learned Single Judge of this Court affirmed the power of the Commissioner of Customs to issue an order of suspension under Regulation 21(2) of the 1984 Regulations to suspend the licence of a Customs House Agent by way of immediate action.
20. Regulation 21 of the 1984 Regulations, which is extracted hereinbelow for Convenience, is almost identical to Regulation 20 of the 2004 Regulations:
Regulation 21. Suspension or revocation of licence. - (1) The Commissioner of Customs may, subject to the provisions of Regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely:
(d) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under Regulation 10;
(e) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else;
(f) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station.
(2) Notwithstanding anything contained in Sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated.
21. It is true as argued on behalf of the petitioner, the judgment of the Division Bench in Union of India v. Jena & Co. (supra) and the judgment of the Single Bench in Orient Clearing and Forwarding Agency v. Union of India (supra) cited on behalf of the respondents pertain to the 1984 Regulations which have since been repealed. Regulation 20(2) of the 2004 Regulations, is, however, a verbatim reproduction of Regulation 21(2) of the 1984 Regulations.
22. Regulation 20(2) of the 2004 Regulations is independent of Regulation 22(1) of the said Regulations. For issuance of an order of suspension under Regulation 20(2) compliance with the procedure prescribed by Regulation 22 is not necessary.
23. There can be no doubt that suspension of the licence of a Customs House Agent results in stoppage of business and entails serious consequences for the licence holder. The suspension of a licence to carry on business as Customs House Agent cannot be equated with suspension of an employee in contemplation of disciplinary proceedings, for, if the charges against the employee fail the employee might be reinstated with full back wages. In case of suspension of a licence, the interim loss neither be estimated accurately nor be compensated fully. There may be long term loss in the form of loss of goodwill and reputation.
24. The power to suspend must, therefore, be exercised with caution, in extremely emergent cases and upon compliance with principles of natural justice.
25. However, in an appropriate case, post decisional hearing might also meet the requirement of natural justice as held in
26. Needless to mention that immediate suspension cannot indefinitely be prolonged. The investigation would have to be completed with utmost expedition and a final decision taken upon compliance with the requisites of Regulation 20 Sub-regulation (1) read with Regulation 22 of the 2004 Regulations.
27. In this case, the charges against the petitioners of duplicating documents and fabricating fake rubber stamps of Customs Officials are indeed serious and justify an order of interim suspension.
28. The correctness of the allegations against the petitioners of duplicating documents and fabricating fake rubber stamps cannot be adjudicated upon affidavits by this Writ Court exercising its extraordinary constitutional jurisdiction under Article 226 of the Constitution of India.
29. The allegations would necessarily have to be examined by the appropriate fact finding authority under Regulation 22 read with Regulation 20(1) of the 2004 Regulations.
30. This Court is not inclined to interfere with the order of suspension. The writ application is disposed of with a direction on the respondent authorities to complete the proceedings against the petitioners expeditiously, preferably within 45 days from the date of communication of this order.
