COMMISSIONER OF CUSTOMS (GENERAL) Vs. RAJ CLEARING AGENCY

JUDGEMENT

(1.) Heard the learned Counsel for the parties. This is an appeal filed by the Appellant-Commissioner of Customs raising the question of law with regard to the judgment and order of CESTAT dated 12th December, 2005. The substantial question of law sought to be raised by the Appellant in this Appeal is that whether the CESTAT was right in applying Regulation 22(1) of the Customs House Agents Licensing Regulations, 2004, particularly when immediate action against the misconduct of the Customs House Agent was necessary, and whether the CESTAT was right in holding that the suspension of licence was bad in law for non-service of prior notice to the delinquent licence holder. Therefore the main contention of the Appellant is that the CESTAT had erroneously held that in case of any suspension of licence of the Custom House Agent the mandatory requirement of prior notice as per the provisions of Regulation 22(1) of the Customs House Agent Licensing Regulations, 2004 ought to have been followed.

(2.) To appreciate the above contention it would be necessary to note the provisions of Regulations 20(1) and 20(2) and Regulation 22(1), which are as follows:

(3.) In the instant case, it appears that the Commissioner of Customs by his order dated 2nd November, 2003 excercising his power under Regulation 20(2) of the aforesaid Regulations had suspended the licence of Respondent-Clearing Agency. We have also perused the Vigilance Report prepared by the Additional Director General, Directorate General of Vigilance, Customs and Central Excise, West Zonal Unit, Mumbai, dated 28th October, 2005. The said report clearly indicates that during the surprise check by the officers of Directorate General of vigilance, Mr. Manoj Govindji Mota, one of the employee of the Respondent-Clearing Agency was found making entries in the journals maintained by the Appraiser at the Appraising Hall of the Jawahar Customs House, Nhava-Sheva on 26th October, 2005. The said employee Mr. Manoj G. Mota had stated to the said Vigilance Committee that he was making entries in the registers and notebooks as per the directions of the Appraiser of Group IIA Shri Vivek Diwedi and that he knew Shri Vivek Diwedi for the last 2 to 3 years. Even the Appraiser Mr. Diwedi had made a statement that he had engaged a private person viz. Mr. Manoj G. Mota to make those entries. The said report clearly indicates that the said employee of the Respondent-Clearing Agency had not paid any monies to the said Appraiser for the purpose of clearing any consignment of the said Clearing Agency. It appears from the said Report that the said employee Manoj was engaged by the Appraiser to collect illegal gratification on his behalf. The learned Counsel for the respondent Shri Madan has stated that the said employee Manoj was immediately dismissed from the services of the Respondent-Clearing Agency and the Respondent-Clearing Agency had absolutely no involvement in making any payment or monies for surreptitiously clearing any consignment. Merely because one of the employee of the Clearing Agency was engaged by one of the Appraiser Vivek Dwivedi, the Clearing Agency's licence ought not to have been suspended. In the said report of the Vigilance Committee it is clearly stated that on that day the other private persons were also found making entries from the tables of other Appraisers. The report also indicates that other officers were also found adopting the similar modus operandi to collect illegal gratification. The learned Counsel for the Appellant has fairly conceded that only the Appraiser Vivek Dwivedi has been suspended and none of the other Appraisers have been suspended till date. It is rather strange as to why the Customs Department has still not proceeded against the other Appraisers though the report of Vigilance Committee has stated that the other Appraisers were also adopting similar modus operandi. In the facts and circumstances of the instant case, it was a case for invoking Regulation 20(2) of the said Regulations which is meant only in cases where immediate action is necessary. In such a case even without giving notice the licence could be suspended. We make it clear that the observations of the CESTAT that in all cases of suspension the procedure under Regulation 22(1) ought to have been followed in the sense prior notice before suspension ought to be given cannot be sustained. A bare reading of Regulation 20(2) very clearly indicates that where immediate action is necessary the Commissioner of Customs has been granted such a power to suspend such licence where an enquiry against such agent is pending or even contemplated. Accordingly we answer the aforesaid question of law to the effect that it is not mandatory that in all cases of suspension, Regulation 22(1) ought to be followed. Whereas in cases where immediate action is necessary the Commissioner of Customs is fully empowered to suspend the licence where an enquiry against such an agent is pending or contemplated as per Regulation 20(2).