Case Law Details

Case Name : TNT India private Limited Vs Principal Commissioner of Customs (Bombay High Court)
Appeal Number : WRIT PETITION (L) NO. 2876 OF 2015
Date of Judgement/Order : 12/10/2015
Related Assessment Year :

Brief of the case

The Bombay High Court has held in the case of TNT India private Limited v. Principal CIT that Writ Petition could be allowed if the due procedure have not been followed while suspending the registration under Regulation 14 of Courier Imports and Exports (Clearance) Regulations, 1998.

Facts of the Case

The case of the Petitioner is that the freights and parcels are distributed by it. The Petitioner is having a large turnover. Operations are carried out by the petitioner under the Courier Imports and Exports (Clearance) Regulations, 1998. According, to the Petitioner, in the last financial year 2014-15, the Mumbai office of the Petitioner handled 7 lakh consignments and none of the consignments out of the above mentioned 7 lakh were detained or seized by the Customs Department.

However, information was received by the Special Investigation and Intelligence Bureau of the Airport Security Customs regarding gold smuggling. Therefore, they visited courier cell where the disputed consignment was found to be containing parts weighing 2620 grams made by gold and covered in silver cover.

The Petitioner states that for similar case and for detention of the goods in the month of May, 2015, a show cause notice dated 20th May, 2015 came to be issued and the allegations in the notice have been duly replied on 22nd July, 2015. There was a personal hearing held before Respondent No. 1, but though such personal hearing was held in August, 2015, no order was passed in pursuance of this show cause notice.

But, in this whole process their registration was suspended, against which they approached Hon’ble High Court under writ petition.

Contention of the Petitioner

The ld. Counsel for the Petitioner argued that the order of suspension invokes Regulation 14 of the 1998 Regulations as amended and also according to the Principal Commissioner he ordered an inquiry to determine whether the registration of the authorized courier should be revoked. Pending the completion of the said inquiry, the registration of the Petitioner has been suspended. Also, it was contended by the ld. Counsel that the revocation cannot take place unless a notice has been issued to the authorized courier informing him the ground on which it is proposed to revoke the registration and giving an opportunity of making representation in writing and a further opportunity of being heard in the matter if so desired. Further, it was submitted that the representation can never be said to be efficacious simply because after suspending all operations of the courier agency like the Petitioner, the authorities have adversely affected the interest of those importers who have engaged the Petitioner as their courier. Several such entities would suffer and the consignments would not be cleared simply because of the drastic action. Even otherwise, this drastic action was unjustified in the case of the Petitioner, as the Principal Commissioner has yet to pass an order in furtherance of the show cause notice dated 20th May, 2015, though personal hearing was held long time back.

Contention of the Revenue

The ld. Counsel for the Revenue submitted that the allegations are too serious. This is not the first time that the Petitioner is found to be actively smuggling gold in the garb of seeking clearance of consignments such as blood pressure machines and in the present case, the consignment details were not completely and properly set out. This time also an attempt was made to smuggle gold. In these circumstances, if drastic order was required to be passed to stop the incidents of this nature, then, the discretion exercised cannot be termed as arbitrary or unreasonable much less capricious, calling for intervention in Writ Jurisdiction.

Held by the Hon’ble High Court

After going through Regulation 14 of Courier Imports and Exports (Clearance) Regulations, 1998, it was observed by the Hon’ble High Court that it deals with deregistration. It is the Principal Commissioner who has the discretion to revoke the registration of an authorised courier and also order forfeiture of security on any of the grounds. The first proviso of the Regulation requires the Principal Commissioner to issue a notice of such revocation setting out the grounds after providing an opportunity and the second proviso, states that if the Principal Commissioner of Customs or the Commissioner, as the case may be, considers that any of such grounds against an authorised courier shall not be established prima facie without an inquiry in the matter. If the ground is not established, the suspension shall stand set aside and the registration restored. In the present case, on the own showing of the Respondents, for the second incident of smuggling of gold and allegedly on 8th September, 2015, there is no show cause notice or notice proposing revocation within the meaning of Regulation 14.

Finally, the Hon’ble High Court held that the second incident is also equally serious. If that is serious, then, an independent notice and based on the incident could have been issued.

In the given facts and circumstances and after having kept the earlier show cause notice pending and passing no orders thereon. The suspension of registration is patently unsustainable being contrary to the plain language of Regulation 14. Accordingly, the writ petition was allowed.

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