JUDGEMENT
Soumitra Pal, J. -
(1.) W.P. No. 195 of 2008. In this writ petition the petitioner stated to be carrying on business as Customs House Agent pursuant to a licence issued by the Commissioner of Customs (Administration) dated 18th June, 2004 has challenged the notice of suspension dated 8/13th February, 2008 issued by the Commissioner of Customs (Administration), respondent No. 2 on the ground that though notice has been issued suspending the licence with immediate effect, till date no enquiry has been initiated. According to the petitioner, the said respondent has arrived at a final conclusion that M/s. S.K. Acharya had not been exercising proper supervision over their employees in violation of provisions under Regulation 19 (8) read with Regulation 13 of the Customs House Agents Licensing Regulations, 2004 (for short 'the Regulations') and that the Customs House Agent, M/s. S.K. Acharya had failed to exercise supervision to ensure the proper conduct of its employees in the transaction of business as agent. Allegation is that the Commissioner has arrived at such satisfaction for immediate action against M/s. S.K. Acharya and the petitioner No. 1 namely Mishra and Mishra (Agencies) Enterprises on the basis of surmises and conjecture as there is no finding that the petitioners had failed to exercise supervision to ensure proper conduct of their employees in the transaction of business as agent. Thus, the impugned order of suspension has been issued mechanically and without application of mind. Submission is though the Commissioner is authorised to suspend the licence of an agent under Regulation 20 (2) such suspension is subject to the provisions of Regulation 22. The Commissioner is required to follow the procedure postulated in Regulation 22 for suspending the licence under Regulation 20 (1) by issuing show cause notice which in the present case is absent. Relying on the unreported judgment of a learned Single Judge of this Court in W.P. No. 1249 of judgment Goodhope and Forwarding Private Limited and another v. Commissioner of Customs (Administration) and others, it is submitted as the respondents have not followed the procedure under Regulation 22 entire action is not only arbitrary, unreasonable, illegal and violative of the provisions of the Customs Act, 1962 but also is violative of the principles of natural justice.
W.P. No. 239 of 2008
2. In the writ petition the petitioner No. 1, a partnership firm, a customs house agent transacting business in the customs stations by virtue of a licence has challenged the action of the respondent No. 2 in issuing the notice of suspension dated 8/13th February, 2008 on the identical ground as in W.P. 195 of 2008 that the order of suspension, passed by the said respondent in terms of Regulation 20. Sub-Regulation 2 of the Regulations, has been carried out without following the procedure prescribed under Regulation 22.
3. Learned Advocate appearing on behalf of the customs authorities submits that the respondent No. 2 has suspended the licences of the petitioners under the Regulation 20 (2) since facts necessitated immediate action pending enquiry. Relying on the judgments in Commissioner of Customs (Gen), Mumbai v. Raj Clearing Agency 2006(199) ELT 602 (BOM) and in Cargomar v. Commissioner of Central Excise, Coimbatore 2006(203) ELT 549 (Madras) it is submitted that the impugned orders are just and proper.
4. The issue-a question of law - which falls for consideration is whether while suspending the licence under Regulation 20 (2) of the Regulations, the procedure under Regulation 22 is to be followed. Regulations 20 and 22 are as under :
"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 any where 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.
(Emphasis supplied)
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 defence. and also to spec 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 recorded 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 wish 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 under section 129-A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under sub-section (1) of section 129 of the Act."
(Emphasis supplied)
5. The procedure for suspending the licence of an agent is enumerated in Regulation 22 (1). It postulates that "The Commissioner of Customs shall issue a notice in writing to the Customs House Agent stating the grounds on which it proposed to suspend" "the licence". The suspended agent is, thus, given an opportunity to defend by submitting a written statement of defence and an opportunity of being heard. After notice is issued, Regulations 22 (2) to 22 (7) entail a detailed procedure for adjudication upon receipt of the written statement.
6. The language of Regulation 22 (1), as evident, is plain and unambiguous. The act of suspending an agent under Regulation 20 (2) and the procedure for such suspension under 22 (1) are inseparable and cannot be read in isolation. Therefore, I am unable to be persuaded by the reasons in the judgments in Commissioner of Customs (Gen) Mumbai v. Raj Clearing Agency (supra) and Cargomar (supra) relied on by the department. Moreover, this Court in a recent judgment in W.P. No. 8 of 2008. The Indian Merchantile Agency and others v. The Commissioner of Customs ((Administration), Kolkata, it has been held that "it is explicit from a reading of Regulation 22 that the agent must be informed of the reasons of suspension. Informing the agent of the reasons is one of basic criteria of the principles of natural justice which is ingrained in Regulation 22. Any breach of the principles of natural justice shall call for judicial intervention under Article 226 of the Constitution of India a remedy which is speedy and efficacious." Hence, in my view, as the Commissioner of Customs (Administration) has not adhered to the procedure laid down in Regulation 22 (1) while suspending the licences of the petitioners, such action is arbitrary and illegal and, thus, cannot be sustained. Therefore, the impugned orders of suspension are set aside and quashed. The respondent No. 2 is directed to allow the petitioner to carry on their activities in accordance with the terms of the licence.
7. Accordingly, the writ petitions are allowed. No order as to costs. Urgent xerox certified copy of this order, if applied for, be given to the appearing parties on priority basis.
Petition Allowed.;