Per P.G. Chacko :

The appellant-Company was holding a regular licence granted under Regulation 10 of the Custom House Agents Licensing Regulations 1984 (in short, CHA Regulations) read with Section 146 of the Customs Act, 1962 to transact business as a Custom House Agent (in short, CHA) at Bombay Custom House. The licensing authority viz. Commissioner of Customs (General),Mumbai suspended the licence with immediate effect as per order dated 14.9.2000 under Regulation 21 (2) of the CHA Regulations. The authority was acting upon a report received from the Commissioner of Customs (Preventive), Mumbai, which stated that the CHA had acted in collusion with an exporting company in defrauding the Revenue by claiming undue drawback of customs duty by misdeclaring goods in shipping bills. The CHA preferred appeal to this Tribunal challenging the said order of the Commissioner (G) on the main ground that the order was made in breach of the principles of natural justice inasmuch as neither any show-cause notice was served on them nor any personal hearing was given to them before the order was issued. It was also contended by the appellants that the impugned order was not in compliance with the mandatory requirements of the CHA Regulations.

2. The Tribunal's West Zonal Bench (WZB) at Mumbai, which heard both sides at the stage of considering the appellants' application for stay of operation of the impugned order, noted, inter alia, that, in the case of Verma & Sons Vs. Commissioner 1999 (111) ELT 565, it had been held by the Bench that the Commissioner of Customs was required to give due notice to the CHA before exercising the extraordinary power under regulation 21 (2) of the CHA Regulations. The Bench (in the present appellants' case) further observed that the views expressed in Verma & Sons (supra) were basically sound but still required more intensive examination by a larger Bench in the interest of the Revenue. Hence the referral order of the WZB which brought up the matter before us.

3. Heard both sides.

4.1 Learned Senior Advocate, Sh. M. Chandrasekharan gave a brief account of the facts of the case and submitted that no enquiry was pending against the appellants when the impugned order suspending their licence was passed by the Commissioner. A period of over five months has elapsed since that order. But no enquiry has been initiated yet. This fact would show that no enquiry was contemplated against the appellants when the Commissioner passed the impugned order. The licence of a CHA could not be suspended under Regulation 21 (2) unless an enquiry was pending or contemplated against the CHA. Yet another pre-requisite for such suspension of licence was a finding of genuine necessity of immediate action. Ld. Sr. Advocate, therefore, contended that, in the Commissioner's order, none of the pre-requisites for suspension of the appellants' licence was shown to exist and hence the order was manifestly bad in law. According to him, the order was made in colorable exercise of jurisdiction.

4.2 Sh. Chandrasekharan further argued that Regulation 21(2) could not be considered to have done away with the principles of natural justice altogether. When the appellants' licence was suspended suddenly without prior notice, their CHA business came to a stands till, on account of which they suffered huge loss. Apart from the financial consequences, the appellants' reputation was also badly affected. Thus the suspension of licence had a grave impact on the appellants' rights. Had the Commissioner while exercising his power under Regulation 21(2) observed the principles of natural justice at least minimally, the appellants' hardships could have been substantially mitigated. Ld. Sr. Advocate further argued that, though Regulation 21 (2) did not contain a specific provision for issue of show-cause notice prior to suspension of licence, the requirement of giving a reasonable opportunity to be heard to the affected CHA could be implied from the very nature o