By TIOL News Service

BANGALORE, FEB 23, 2018: THE petitioner has filed this writ petition aggrieved by the order passed by the Principal Commissioner of Customs on 16/03/2016 under Regulation 23 prohibiting the petitioner from operating within the jurisdiction of Bangalore Customs Division, with immediate effect and until further orders.

It is submitted that the order should be quashed as the same has been passed without giving any prior opportunity of hearing and it has virtually deprived the petitioner assessee of its source of livelihood; that misdeclaration was made by the importer and, therefore, no offence was committed by the petitioner to attract the consequence of "prohibition" under Regulation 23.

On the question of maintainability of the present writ petition, on account of availability of an alternative remedy by way of an appeal before Tribunal, it is submitted that since the impugned order of prohibition under Regulation 23 is not an Adjudication Order or an order passed by the Adjudicating Authority, therefore, the remedy by way of an Appeal under Section 129-A of the Act against the said order is not available to the petitioner; that the appeals provided under the Regulations of 2013 were applicable only if the impugned order was for suspension or cancellation of the license as provided under Regulations 18 and 19 of CBLR, 2013.

The counsel for the Revenue submitted that insofar as the question of alternative remedy by way of an appeal against the impugned order passed under Regulation 23 is concerned, the Court had already taken a view in the case of  M/s. Capricorn Logistics Pvt. Ltd.  -  2017-TIOL-2605-HC-KAR-CUS  holding that the remedy by way of an appeal before CESTAT under Section 129 of the Act is available against the order passed under Regulation 23 of the Act as per Regulation 21 of the 'Regulations of 2013'. Inasmuch as the present writ petition is not maintainable and the petitioner assessee deserves to be relegated back to the appellate Forum under Section 129-A of the Act.

The High Court extracted the relevant provisions of the Act and the Regulations of 2013, the decision in M/s. Capricorn Logistics Pvt. Ltd. -   2017-TIOL-2605-HC-KAR-CUS and observed that the view taken therein does not require a reconsideration or a change.

Nonetheless, on the various arguments raised by the petitioner, the High Court observed -

+ Unless the Regulation 21 itself was couched in a narrow and limited terms to provide for an appeal only against the suspension and cancellation of licence, the State could have said so, but Regulation 21 on the other hand is couched in wider terms and it stipulates that a Customs Broker may prefer an appeal under Section 129-A of the Act if he is aggrieved by any order passed by the Commissioner of Customs.

+ The word "any order" in Section 129-A of the Act would undoubtedly cover an order passed under Regulation 23 as well, more over, Section 129-A of the Act, the parent provision from which the right to appeal flows to the aggrieved person does not have any such restrictive terms incorporated in the said provision.

+ There is no doubt that the order passed under Regulation 23 by the Principal Commissioner of Customs is also an order passed by him as an 'adjudicating authority'. What is adjudicated and what is imposed in the order under the Regulations does not de-limit the scope of the appellate provisions but it is important only for deciding the consequence flowing from such orders.

+ Provisions of Section 122-A of the Act contained in Chapter XIV dealing with the 'Confiscation of Goods and Imposition of Penalties' does not deal with a contingency like "prohibition" under Regulation 23 ... Therefore, the (adjudication) procedure provided in Section 122-A of the Act in Chapter XIV cannot be imported and read into the Regulation 23 as contended.

+ This Court is of the opinion that the nature of order passed under Regulation 23 with a non obstante clause therein is a more serious and drastic provision to check and prevent with immediate effect the on-going illegal activities by the Customs Brokers.

+ The Customs Broker cannot completely disentangle himself or distance himself from the mis-declaration made on behalf of the importers or by the importers themselves. While working under these Regulations, he undoubtedly acts as an agent of the Importer and his acts bind the Importer as the Principal. The purposes of these Regulations are obviously to prevent evasion of custom duties and illegal activities and declarations to evade duties to be checked and various consequences in these Regulations have been provided for including "prohibition" from functioning, suspension of licence which is India-wide permission or even cancellation thereof.

+ Regulation 23 does not in its own terms provide for any temporary or permanent prohibition. The said prohibition by the terms of Regulation 23 can continue even for an indefinite period. While the suspension and revocation of licence completely bar and ban the business of the Customs Brokers on all-India basis, the "prohibition" under Regulation 23 may have the effect only for a particular Section or Sections of the particular territorial jurisdiction of the Customs Station.

+ The non obstante provisions of Regulation 23 to prohibit a Customs Broker from working in any Section of the particular territory of Customs Department, appears to have been enacted to put in place the effective measures against the illegal activities and evasion of duties and that is why the procedure of giving of a prior notice and opportunity of hearing appears to have not been deliberately provided for in the said Regulation 23.

+ This Court is of the clear opinion that even the orders passed under Regulation 23 of 'Regulations of 2013' are appealable under Section 129-A of the Act read with Regulation 21 of the 2013 Regulations.

+ Rule of alternative remedy is not a Rule of bar of jurisdiction of this Court under Article 226 of the Constitution of India, but a Rule of discretion invoked by the Court in its extra-ordinary jurisdiction.

The writ petition was held to be not maintainable.

However, liberty was granted to the petitioner assessee to avail the remedy by way of an appeal under Section 129-A of the Act read with Regulation 21 before the Tribunal within a period of four weeks.

And the Tribunal was requested to consider the appeal on merits in accordance with law, without raising any objection on the ground of limitation in filing such appeal.

The Writ petition was disposed of.

(See 2018-TIOL-332-HC-KAR-CUS)