Jeet Ram Kait, Member (T)

1. The appellants have filed an application for early hearing. The application is allowed and the appeal is taken up for hearing today itself.

2. The operative portion of this order was pronounced in the open Court today i.e. 27.2.2003.

3. This appeal is directed against the Order-in-Original bearing F. No. R-335/CHA dated 21.1.2003 passed by the Commissioner of Customs (Seaport), Chennai by which he has ordered suspension of CHA licence No. R-335 issued to the appellants herein under Regulation 21(2) of CHALR, 1984 pending investigation and finalisation in exercise of the power conferred under the provisions of Customs House Agents Licensing Regulations 1984.

4. The party had moved the Honble High Court of Judicature at Madras in Writ Petition No. 3772 of 2003 and the Honble High Court has directed the third Respondent i.e. The Commissioner of Customs (Seaport) Chennai to dispose of the appeal as expeditiously as possible on or before 28.2.2003. Since the appeal is pending with this Tribunal, we take up the appeal for disposal on merits.

5. Shri S.S. Radhakrishnan, learned Counsel for the appellants submitted that the learned Commissioner in exercise of his power conferred on him under the provisions of the CHA Licensing Regulation 21(2) of the CHALR suspended the licence of the appellant CHA. Therefore, the appellants have moved this Tribunal for relief as the business of the appellants has come to a standstill. He further submitted that the impugned order has been passed after expiry of five months from the date of the alleged mis-declaration in the Bill of Entry bearing No. 418702 dated 19.8.2002 and 420163/23.8.2002. He also invited our attention to the Final Order No. 714/2002 of this Tribunal in the case of M/s Trans-Port Logistics v. CC, Chennai wherein the order of the Commissioner of Customs passed under Regulation 21 (2) suspending the CHA licence without issuing show cause notice was set aside relying on the decision of the Larger Bench in the case of Freightwings and Travels Ltd. v. CC, Mumbai, 2001 (75) ECC 323 (LB) : : 2001 (129) ELT 226. The Larger Bench had held that a person against whom punitive or damaging action is taken by any authority in its quasi-judicial capacity must at least be given the minimal fairness of a post-decisional hearing. He submitted that in the present case, no show cause notice was issued to the appellants. He also invited our attention to the judgment rendered by the Honble High Court of Calcutta in the matter of Jeena & Co. v. CC and Anr., 1987 (13) ECC 117 (Cal) : 1987 (28) ELT 223 (Cal), in which it has been held that suspension of licence with immediate effect is liable to be struck down in the absence of anything to show that without such immediate action very serious consequences would have followed. In that case no prima facie case was made out for suspension of the licence. It was also held therein that non-compliance with the principles of natural justice entails grave and serious consequences making the suspension order invalid. He also submitted that suspension of licence without the opportunity of being heard was not sustainable.

6. Shri A. Jayachandran, learned DR appearing for the Revenue submitted that the Larger Bench in the case of Freightzvings and Travels v. CC, Mumbai (supra) also held that immediate suspension of the licence is contemplated under Sub-regulation (2) of Regulation 21 and it is only one of an interim nature warranted by the exigencies of the factual situation arising from the CHAs conduct and it was also held that procedure of show cause notice and personal hearing as provided under Regulation 23 is not applicable to the function under Sub-regulation (2) of Regulation 21 of the CHALR Regulation. He further submitted that the learned Commissioner has noted in the impugned order that one Roop Singh, Proprietor of M/s Global Technology Inc. in his statement dated 29.11.2002 had stated that he had not imported any goods so far and not permitted any one to import in the name of his firm. It therefore, prima facie appeared from the statement that CHA was clearing the goods without proper authorisation and with an intent to evade duty. He also submitted that the Commissioner has noted in the order that Shri P.G. Rameshbabu, Managing Partner of M/s Blue Whale Shipping Company, the appellants herein in his voluntary statement revealed that the CHA had handled two consignments vide BE Nos. 418702/19.8.2002 and 420163/23.8.2002 for M/s Globel Technology Inc. without any authorisation from the importer and it was also revealed that Shri J. Dillibabu who is not an authorised staff of the CHA had handled the documents and dealt with Customs for clearance of the said consignments. It was therefore pointed out that the appellants have misused their CHA licence and have not complied with the obligations set out in Sub-regulations (a) (b) & (c) of Regulation 14 of CHALR, 1984. He also submitted that the learned Commissioner had suspended the licence after recording statement on 29.11.2002 from Shri Roop Singh of M/s Globel Technology Inc. The Commissioner was therefore satisfied of the existence of a prima facie case warranting immediate suspension of the licence of the appellants and it was in these background the licence was suspended pending investigation and finalisation in exercise of the power conferred on him under CHA Licensing Regulations 1984. He also submitted that the Commissioner had suspended the licence within a period of two months and not five months as alleged by the learned Counsel for the appellants. He therefore, submitted that two months were taken by the department to arrive at a decision that a prima facie case existed warranting suspension of the licence and immediately thereafter the licence was suspended and there was no delay and immediate action was taken after reaching a prima facie conclusion that the CHA had committed fraud and has indulged in unhealthy practice of unauthorised /illegal clearance of cargo causing loss to the Exchequer.

7. We have carefully considered the submissions made by both the sides. We find that the impugned order suspending the operation of the CHA licence was issued by the Commissioner under the provisions of Regulation 21(2) of CHALR, 1984. Prima facie finding arrived at by the Commissioner was after taking into consideration the statement of Shri Rameshbabu, Managing Partner of the appellants firm itself and also after obtaining statement from one Roop Singh, Proprietor of M/s. Globel Technology Inc. on 29.11.2002. Shri Rameshbabu, Managing Partner of the appellants had clearly stated that the CHA had handled two consignments bearing BE Nos. 418702/19.8.2002 and 420163/23.8.2002 for M/s Globel Technology Inc. without any authorisation from the importer and it was also revealed that one Shri Dilli Babu who is not an authorised staff of CHA had handled these documents and dealt with the Customs for the clearance of the said consignments. Further the proprietor of M/s Globel Technology Inc. had also stated that he had not imported any goods so far and had not permitted any one to import in the name of his firm. Therefore, the Commissioner had found that the CHA was clearing goods without proper authorisation with an intent to evade payment of duty. The Commissioner had observed that if the CHA of this type is authorised to operate even after the detection of the above fraud it would lead to unhealthy practice of unauthorised/illegal clearance of cargo causing loss to the Exchequer. The Commissioner was therefore, satisfied with the existence of a prima facie case warranting immediate action and it was in these circumstances that he ordered suspension of the CHA licence bearing No. R-335/CHA pending investigation in exercise of the power conferred under the provisions of CHA Licensing Regulation, 1984. We, therefore, find that the judgment of the Honble High Court of Calcutta in the case of Jeena & Co. v. CC, and Anr. (supra) is distinguishable from the facts of the present case. The learned Counsel for the appellants had brought to our notice judgment rendered by the Honble Madras High Court in the case of East West Freight Carriers Pvt. Ltd., : 1995 (77) ELT 79 (Mad) wherein it was held that suspension of CHA licence was not sustainable unless order indicates application of mind by the Commissioner to the aspect whether immediate action was necessary pursuant to contravention by clearing agent it was also held therein that jurisdiction conferred on Commissioner to suspend the licence is only in cases where immediate action was necessary under Regulation 21 (2) of CHALR 1984. In the present case, as noted above, one Roop Singh Proprietor of M/s Globel Technology Inc. in his statement stated that he had not imported any goods so far nor has he permitted any one to import in the name of his firm. Further, Shri Rameshbabu, Managing Partner of the appellants themselves had stated that the CHA had handled two consignments without any authorisation for M/s Globel Technology and he has also revealed the name of the person i.e. J. Dilli Babu who had handled the documents.

The learned Commissioner has recorded all these facts before arriving at a conclusion that a prima facie case existed warranting suspension of the CHA licence and it was in these circumstances that the licence was suspended. However, we find that this Bench in the matter of Transport Logistics v. CC, Chennai vide Final Order No. 714/2002 the order of the lower authority suspending the CH licence was set aside by following ratio of the Larger Bench decision in the case of Freightwings and Travels Ltd. v. CC, 2001 (75) ECC 323 (LB) : : 2001 (129) ELT 226 wherein the Larger Bench held that a person against whom punitive or damaging action is taken by any authority in its quasi-judicial capacity must be given the minimal fairness of a post-decisional hearing. Respectfully following the ratio of the Larger Bench decision in the case of Freightwings and Travels Ltd. (supra) we direct the Commissioner to decide the case within a period of two months from today i.e. 27.2.2003 failing which the suspension of the CHA licence No. R-335/CHA issued to the appellants herein would automatically stand vacated. Ordered accordingly.