POONAM CARGO SERVICES Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) BY the impugned order dated 31 -8 -1998, the Commissioner of Customs, Delhi has held as under : Whereas an enquiry against M/s. Poonam Cargo Services, E -147, 2nd floor, Lajpat Nagar -I, New Delhi -110024 holder of regular CHA licence No. 35/87 valid upto 5 -5 -2001 of Delhi Custom House is contemplated with regard to clearances of I.V. Cannula valued at Rs. 1,22,60,000/ - for misclas -sification, misdeclaratfon as "Disposable and non disposable cannula for aorta, Vene Cause and similar veins and blood vessels" in terms of G.E. No. 121 notification No. 23/98 -Cus. with a view to wrongly avail benefit of exemption notification and clear goods at Nil rate of duty on the Bill of Entries No. 218025 dated 21 -8 -1998,110737 dated 29 -7 -1998 and 215634 dated 1 -8 -1998. Over and .above this, the statement of Shri Sunil Nanda and Sh. Rajeev Malik was recorded under Section 108 of the Customs Act, 1962, in which they admitted the facts of misclassification; misdeclaration on the said Bill of Entries filed by him on behalf of the importer. Thus; while doing so, the CHA - M/s. Poonam Cargo Services, E -147, 2nd floor, Lajpat Nagar -I, New Delhi -110024 has contravened the provisions of Regulations (14) (d)(e) and (1) of CHALR' 1984. Now, therefore, I, Vijay Zutshi, Commissioner of Customs (General), New Delhi in exercise of powers conferred upon me under Regulation 21(2) of CHLR' 84 hereby suspend CHA Licence No. 35/87 of Delhi Custom House, of the said CHA - M/s. Poonam Cargo Services, E -147,2nd floor, Lajpat Nagar -I, New Delhi -110024 with immediate effect and until further orders. This order is issued without prejudice to any other action being taken/proposed to be taken against the said CHA/their employees under the provisions of Customs Act, 1962 or any other law for the time being in force.

(2.) LEARNED Counsel for the appellants, Shri L.P. Asthana submits that the power under Regulation 21(2) of the Customs House Agents Licencing Regulations, 1984 is of an exceptional nature and is to be exercised only where immediate action is considered necessary; that the order must state grounds for immediate action and since the impugned order does not state any grounds for exercise of this power, it requires to be set aside. He submits that the issue as to whether there has been any wrong availment of benefit of exemption under Notification 23/98 is a question for consideration after issue of show cause notice and reply thereto and it is not possible at this stage to hold that the goods covered by the 3 Bills of Entry enumerated in the impugned order do not fall within the description contained therein or have been misclassified or misdeclared and in any event, passing of an order under Regulation 21(2) is not justified. He relies upon the decision of the Calcutta High Court in the case of N.C Singha and Sons v. Union of India reported in 1998 (104) E.L.T. 11 (Cal.), Madras High Court decision in the case of East West Freight Carrier P. Ltd. reported in 1995 (77) E.L.T. 79 (Mad.) and the decisions of the Tribunal reported in 1993 (68) E.L.T. 419 in the case of Eagle Shipping (India) Services, 1994 (50) ECR 319 in the case of Trinity Shipping and Allied Services and 1998 (98) E.L.T. 275 in the case of Vikas Shipping Agency v. Collector of Customs, Bombay in support of his arguments and prays that the impugned order may be set aside and the appeal allowed. Opposing the prayer, learned DR, Shri Nayyar contends that the order discloses the reason for immediate action viz. misclas -sification and misdeclaration on the Bills of Entry filed by the appellants on behalf of the importer, resulting in contravention of the provisions of Regulation 14(d), (e) and (1) of Custom House Agents Licencing Regulations and cites the decision of the Hon'ble Calcutta High Court in the case of Collector of Customs v. Jeena and Company reported in 1990 (45) E.L.T. 72 (Cal.) to support his case. He, therefore, pleads that the order of suspension of CHA Licence may be sustained and the appeal rejected.

(3.) WE have carefully considered the submissions of both sides. The suspension of a CHA Licence is not sustainable unless the suspension order indicates application of mind by the Commissioner to the aspect whether immediate action was necessary pursuant to contravention by the Clearing Agent, as held by the Hon'ble Madras High Court in the case of East West Freight Carriers P. Ltd reported in 1995 (77) E.L.T. 79 (Mad.). In this case the CHA's contention that the order passed under Regulation 21(2) of the CHALR 1984 was bad in law in the sense it did not indicate that the Collector had found opinion to state that immediate action was necessary to suspend the Licence to the petitioner pending enquiry contemplated for contraventions, was accepted by the High Court which held that the power to suspend the Licence is to be exercised where immediate action is necessary, and quashed the order of suspension as a plain reading of the same did not show that the Collector had applied his mind to consider whether immediate action was necessary in the case. The same view has been taken by the Hon'ble Calcutta High Court in the case of N.C. Singha and Sons v. Union of India reported in 1998 (104) E.L.T. 11 (Cal.) wherein the Court has held that: