M/s. Pushpanjali Logistics vs C.C. (lmport And General), New Delhi

The appellant is a Customs House Agent (CHA). The appeal is preferred against the order dated 29.07.2013 of the Commissioner of Customs

(Import & General), New Customs House, New Delhi whereby in purported exercise of powers under Regulation 20(1) of Customs House Agents

Licencing Regulations, 2004 (CHALR, 2004), the appellant's CHA licence was revoked and forfeiture of security deposit of Rs.50,000/- was ordered.

Challenge in the appeal is inter alia on the ground that the impugned order is invalid since the proceedings were initiated by an authority who had no

jurisdiction to suspend or revoke appellant's licence under the provisions of CHALR, 2004. Contentions were also advanced on merits. Since the

appeal succeeds on the ground of lack of jurisdiction, it is not necessary to analyse challenge of the impugned order on merits of the decision.

Ld. counsel for the appellant has presented a list of dates, on which there is no contest by the respondent Revenue.

To the extent relevant and material, the chronology of events reveals that on 09.07.2008, the Commissioner, Customs (Gen), Mumbai was intimated

by Directorate of Revenue Intelligence that the appellant's Mumbai office was found involved in duty evasion by undervaluation of electronic goods.

On 14.07.2008, Commissioner of Customs (Gen), Mumbai suspended operation of appellant's licence within his jurisdiction. On 31.07.2008,

Commissioner of Customs (I & G), Delhi - the respondent, the authority which issued the CHA licence to the appellant suspended the licence. On

21.07.2011, the Commissioner of Customs, Mumbai drafted a Show Cause Notice and authorised Shri KGVN Surya Teja, the Dy. Commissioner of

Customs, SIIB, Mumbai to conduct enquiry into the alleged misconduct of the appellant.; On 20.09.2012, the Enquiry Officer furnished his report. On

07.11.2012, the respondent issued a Show Cause Notice enclosing a copy of the enquiry report, drawn up by the Dy. Commissioner of Customs, SIIB,

Mumbai and proposed revocation of appellant's CHA licence and forfeiture of security deposit, on the basis of recommendations and conclusions in

the enquiry report dated 20.09.2012. The impugned order was passed on 29.07.2013 by Commissioner of Customs (l &G), Delhi, the Respondent.

The appellant pleads and reiterates in oral argument that the Delhi Commissioner never issued a Show Cause Notice as contemplated in Regulation

22(1) and that contends that Regulation 22(1) not only requires the jurisdictional Commissioner (the respondent) to issue a notice proposing revocation

or suspension of the licence, but also to set out the grounds on which the revocation of licence is proposed (in such notice) and should further intimate

to the CHA, the factum of having nominated a specified Dy. Commissioner or Asst. Cornmissioner of Customs to whom a written statement of

defence should be submitted by the CHA. The appellant further contends that the enquiry officer whose report dated 20.09.2012 was the basis for the

impugned order, was not nominated by the respondent. He was appointed by the Commissioner of Customs, Mumbai. This is a patent and fatal

infirmity which vitiates the whole proceedings, including the impugned order, is the contention. Appellant also asserts that the notice dated 07.11.2012

issued by the Respondent is the only notice which emanated from the Delhi Commissioner in terms of Regulation 22 and therefore the impugned order

is unsustainable, since, to reiterate, there was neither a notice under Regulation 22(1) issued nor was the enquiry officer appointed by the Delhi

Commissioner apart from the fact that grounds on which it was proposed to revoke the licence were not framed by the respondent. Appellant has also

contended that the satisfaction as to existence of grounds for potential revocation of the licence, is a satisfaction to be arrived at by the jurisdictional

Commissioner and cannot be abdicated by the authority or usurped by the Mumbai Commissioner, who has no power to revoke appellant's licence,

under Regulation 20 of CHALR, 2004.

Pursuant to an Interlocutory Order dated 28.10.2015, the Id. Departmental Representative was directed to ascertain whether the Enquiry Officer,

i.e., Asst. Commissioner of Customs, SIIB, Mumbai though facially appointed by the Mumbai Commissioner, was so appointed on specific

directions/orders of the Delhi Commissioner, and whether the respondent Delhi Commissioner had issued a notice under Regulation 22(1 ). Ld.

Departmental Representative submits an affidavit dated 20.11.2015 filed by the respondent. This affidavit avers that the Dy. Commissioner, SIIB,

Mumbai, the enquiry officer was so appointed by the Mumbai Commissioner and not by the respondent; that the Delhi Commissioner had mereiy

issued the Notice dated 07.11.2012 on the basis of the enquiry report dated 20.09.2012 drawn up by the Dy. Commissioner, SIIB, Mumbai; and that

this Notice was based on no enquiry conducted by any officer appointed by the respondent.

Regulation 20 of the 2004 Regulations authorises the Commissioner of Customs, subject to provisions of Regulation 22 to revoke the licence of a

CHA and order for forfeiture of a part or whole of the security, on any of the grounds specified therein. Regulation 22 sets out the procedure to be

followed for suspension or revocation of licence. Clause (1) of the Regulation requires the Commissioner of Customs to issue a notice in writing to

CHA stating the grounds on which it is proposed to suspend or revoke the licence and requiring the licencee to submit within the specified time to the

Dy. Commissioner of Customs or Asst. Commissioner of Customs nominated by such Commissioner, a written statement of defence and to specify in

the said statement whether the licencee desires to be heard in person by the Dy. Commissioner of Customs or Asst. Commissioner of Customs.

Clause (2) of the Regulation 22 authorises the Commissioner of Customs, on receipt of the written statement, or where no such statement is received

within the time specified in the notice referred to, to direct Asst. Commissioner of Customs or Dy. Commissioner of Customs to inquire into grounds

which are not admitted by the CHA. Clause (3) of the Regulation 22 authorises the enquiry authority so appointed, to consider such documentary

evidence as may be relevant or material to the inquiry regarding the grounds forming the basis of the proceedings and to follow such other process as

prescribed therein for the purpose of ascertaining the correct position. Clause (5) mandates that at the conclusion of the inquiry, the enquiring officer

shall prepare a report of the inquiry and record his findings. Clause (6) requires the Commissioner of Customs to furnish to the licencee a copy of the

report of the enquiry authority and to call upon the CHA to submit within the specified time, any representation that he may desire to make against

findings of the enquiry authority. Clause (7) provides that the Commissioner of Customs, after considering the report of the enquiry officer and the

representation thereon, if any, made by the licencee shall pass such order as appropriate in the circumstances.

The 2004 Regulations are made by the CBEC in exercise of powers conferred by sub-section (2) of Section 146 of the Customs Act, 1962.

Regulation 3 sets out that no person shall carry on business as a CHA relating to entry or departure of a conveyance or the import or export of goods

at any Customs Station unless such persons holds a licence granted under the Regulations. Regulation 4 sets out the process for an application for

grant of CHA licence and provides that the Commissioner of Customs shall invite applications for grant of such number of licences as assessed by

him. Regulation 5 sets out the procedure for application and provides that an application shall be made to the jurisdictional Commissioner. The contents

of such application are also specified in this Regulation. Regulation 7 delineates the procedure for scrutiny of an application and Regulation 8 provides

for examination of an application for licence. Regulation 9 specifies that the Commissioner of Customs shall grant the licence. Regulation 10 sets out

requirements as to of executing a bond and provides that before grant of a licence under Regulation 9, the Commissioner of Customs shall require the

applicant to enter into a bond, if necessary a surety bond and a licencee is also required to furnish a Bank Guarantee in the name of the Commissioner

of Customs for the specified amount for carrying out the business as CHA. Regulation 12 prohibits the transfer of licence. Regulation 13 sets out

obligations of the CHA. Regulations 14 to 19 are in the nature of house keeping provisions, such as change in directors of the company, change in

constitution of company, change in constitution of a concern, engagement of persons qualified in the examination referred to in Regulation 8,

maintenance and inspection of accounts and employment of persons. Regulation 20 is the substantive provision enumerating the power to suspend or

revoke the licence. Regulation 21 authorises the prohibition of operation of a CHA by Commissioner of Customs, in so far as the operations pertain

within his jurisdiction. Regulation 22 sets out the procedure for exercising the power of suspension or revocation of a licence, authorised under

Regulation 20.

From the text of the provisions of the 2004 Regulations, it is clear that only the jurisdictional Commissioner which had issued the CHA licence is

authorised to suspend or revoke the licence and order forfeiture of security deposit, under Regulation 20. The authority which may exercise the power

of suspension or ravocation of licence and by following the procedure mandated under Regulation 22 is the same authority. No other inference is

legitimate since the process mandated under Regulation 22 is for due exercise of the power of suspension or revocation of CHA licence, authorised

under Regulation 20. The procedure mandated under Regulation 22 thus is that the jurisdictional Commissioner (authority which issued the CHA

licence) must alone issue a notice in writing setting out the grounds for suspension or revocation of the licence; the same authority could appoint an

enquiry authority, being a Dy. Commissioner of Customs or Asst. Commissioner of Customs to be nominated by him; only an enquiry authority so

nominated and by the jurisdictional Commissioner may enquire into the grounds for suspension or revocation of the licence; only the jurisdictional

Commissioner is authorised to consider the report of an enquiry, submitted by . an officer nominated by such jurisdictional Commissioner; and arrive at

a satisfaction whether a case is made out for suspension or revocation of the licence.

In the facts and circumstances of the present case, as earlier noticed, no notice contemplated under Regulation 22(1) or the nomination of enquiry

authority as specified therein, ever emanated from the respondent, who is the jurisdictional Commissioner. The inquiry report dated 20.09.2012 by Shri

KGVN Surya Teja, Dy Commissioner of Customs, SIIB, Mumbai was wholly unauthorised as the respondent admittedly did not nominate him as the

enquiry officer. It is this enquiry report which formed the basis for Notice dated 07.11.2012 issued by the respondent. This notice clearly is one falling

within the ambit of Regulation 22(6) and not 22(1).

In the aforesaid circumstances, there is a clear and fatal violation of the clear procedure mandated for revocation of the appellant's licence

authorised under Regulation 20, qua the mandated procedure under Regulation 22.

For the aforesaid reasons, the impugned order invites invalidation. We quash the impugned order. The appeal is allowed but with no costs.