SANDEEP AND COMPANY Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) IN this appeal M/s. Sandeep and Co. (Sandeep), a Customs House Agent, seeks to vacate the order of the Commissioner of Customs suspending the CHA licence issued to it under Regulation 20(2) of the Custom House Agents Licensing Regulations, 2004 (CHALR 04). Vide the impugned order dated 15.10.2007 the Commissioner (Customs) suspended the licence with immediate effect. It was found by the Commissioner that the appellant -firm had failed to fulfill its obligations under Regulation 13(a), 13(d), 13(e) and 13(f) of the CHALR, 2004. From the order it is seen that the Commissioner arrived at the above conclusion on the finding that one M/s. Panacea World Wide Traders had smuggled Red Sanders to Singapore in the guise of rice. On an earlier occasion the same party had imported AC compressors in the guise of computer parts. In these transactions one Shri Subramaniam had handled the documentation on the strength of authorization issued by Sandeep. A nexus between the said Shri. Subramaniam and Sandeep is implied in the order. The appellants have taken the ground that suspension of Customs House Agent's licence is authorized by the Regulation 20(2) in such cases where immediate action was necessary and where an enquiry was contemplated or pending against a Customs House Agent. Ld. Consultant for the appellants submits that in the instant case the offending transaction that apparently triggered action under the regulation is the failed effort by M/s. Panacea World Wide Traders (World Wide) to smuggle red sanders to Singapore in the guise of rice. It is submitted that the authorities are yet to take any action under the Customs Act against the persons involved in that case. The shipping bill in the said case had been filed on 7.4.2007. It is submitted that the appellants are not involved in the said attempt to export red sanders. They had processed documents for exporting a consignment of Ponni raw rice. It had transpired that the export consignment was substituted with Red Sanders after the consignment had left the Container Freight Station (CFS), Numbel, after stuffing the container with the declared goods in the presence of the authorities. It is the appellant's claim that it is not in any way involved in the said offending transaction yet to be taken up for adjudication under the Customs Act.

(2.) VIOLATIONS of various sub clauses of Regulation 13 have been found against the CHA without specific/proven basis. The charges are of general nature to the effect that it failed to advise its client with regard to the requirements to be met under the Act and its failure to promptly intimate the Customs authorities the failure of its client to follow the provisions. The order reproduces the obligations under the sub clauses of Regulation 13 and finds that the appellant had violated the same.

(3.) SUSPENSION under Regulation 20(2) is authorized only where the Commissioner finds that the CHA should be prevented from continued functioning when an enquiry against it is pending or contemplated. This obviously presupposed that the CHA being allowed to continue to function would jeopardize such an enquiry. It also implied that the CHA was involved in certain activity which endangered the interest of the Revenue. In the instant case, the apparent cause of action of M/s. Panacea World Wide Traders trying to smuggle out red sanders had happened on 7th April, 2007. If the Commissioner had felt that the CHA had to be put out of action to enable a free and fair enquiry, the order of suspension should have ensued the attempted illegal export and in April, 2007. It is further submitted that the order of suspension issued in October 2007 was not justified and was issued without application of mind. Following the suspension of the subject licence the appellant's licences to function as CHA at Mumbai Customs House, Tuticorin Customs House and Bangalore Customs House were also suspended. The livelihood of the appellants was endangered owing to the uncalled for suspension of the licence in the impugned order. The impugned order deserved to be set aside. Ld. Consultant relies on the following case law in support of his prayer: i) Freight Wings & Travels Ltd. v. CC, Mumbai ii) Sai Shipping Agencies v. Commissioner of Customs (Port -Import) iii) Poonam Cargo Services v. Collector iv) Devadatta Agency v. Commissioner ] v) East West Freight Cariers (P) Ltd. v. Collector 1995 (77) ELT 97 (Mad) vi) GCL Shipping Agencies Pvt. Ltd. v. Commissioner vii) V.K. Singh v. Commissioner of Customs, Hyderabad