1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR. C.A.T. NO. 24/09 IN CUSTOMS APPEAL NO. 1 OF 2008 Commissioner of Customs & Central Excise .vs. M/s. Rio Tinto India Pvt. Ltd. & another. ________________________________________________________________ Office Notes, Office Memoranda of Coram, appearances, Court's orders or directions and Court's or Judge's orders. Registrars orders. Mr. M.G. Bhangde, Senior Counsel for the applicant/respondent no.2. Mr. S.K. Mishra, Advocate for the appellant, Ms. Udeshi, Advocate for respondent no.2. CORAM : S.A. BOBDE & F.M. REIS, JJ. DATED : JUNE 22, 2009. Heard the learned Counsel for the parties. The appellant has questioned the rectification order of the CESTAT by which it has held that the respondent no.2 M/s. U.S. Enterprises is entitled to carry on business as a Customs House Agent. This Court has admitted the appeal of the Department and specifically restored the Customs House Licence of the respondent no.2 and directed that it shall continue till the disposal of this appeal. It appears, however, that throughout the proceedings before the CESTAT and before this Court it was not specifically brought to the notice of the authorities that there was a change in the constitution of the respondent no.2 after the retirement of one of its partners Khobragde. This change has admittedly been notified to the appellant on 5.1.2001 by a letter. It must be noted that the respondent no.2 has described itself in the memo 2 of the appeal as a proprietor in consonance with the change in a partnership firm. Notwithstanding the notification of this fact, the appellant has in obedience to the orders of this Court renewed the licence which expired sometime in the year 2008. The licence is renewed in the name of the firm, which as noted above does not exist but is replaced by a proprietorship. The plea taken by the appellant is that since this Court directed the continuance of the licence and the licence was originally in the name of the firm, the respondent thought it fit to renew it in the name of the firm so that the orders of this Court are not in any way breached. It is not possible to accept this view at all. If there has been a change in the constitution of the firm and that change has been duly notified, the authorities are bound to act on the change on the basis of the Rules and make appropriate changes in the existing licence, which change must continue even at the time of its renewal. It is wholly impermissible to renew the licence in the name of a non-existing entity, i.e. the firm. Shri M.G. Bhangde, learned Senior Counsel for the applicant/respondent no.2, relies on the Customs House Agents Licensing Regulations, 2004 and in particular Regulation Nos. 15 & 16, which read as follows :- “15. Change in constitution of any firm or a company : (1) In the case of any firm or a company, holding a licence under these regulations, any change in the constitution thereof shall be reported by such firm or company, as the case may be, to the Commissioner of Customs as early as possible, and any such firm or a company indicating such change shall make a fresh application to the said Commissioner of Customs within a 3 period of sixty days from the date of such change for the grant of licence under regulation 9, and the Commissioner of Customs may, if there is nothing adverse against such firm or company, as the case may be, grant a fresh licence of the category held by the applicant prior to the change in constitution. Provided that if the existing firm or company moves an application for such changes, then such firm or company may be allowed to carry on the business of Customs House Agent with the approval of the Commissioner of Customs till such time as a decision is taken on the fresh application of such firm or company. (2) Notwithstanding anything contained in sub-regulation (1), where a licence granted or renewed under these regulations in favour of a firm or a company has ceased to be in force because of the death or retirement of the person referred to in clause (b) of sub-regulations (2) and (3) of regulation 5, as the case may be, the firm or the company may apply for replacement of the name of the demised person by the name of a partner, director or employee who has passed the examination referred to in regulation 8 in accordance with sub-regulation (8) of regulation 8. Provided that if there is no such person in the firm or company, then such firm or company, as the case may be, may authorize any other partner, director or employee who is a ‘G’ card holder, to pass the examination referred to in regulation 8 within a period of two years from the date of the demise or retirement of such person, and the 4 firm or company may be permitted to carry on the business of a Customs House Agent with the approval of the Commissioner of Customs till such time such partner, director or employee passes the said examination. (16) Change in the constitution of a concern :- (1) Where a licence granted or renewed under these regulations in favour of a person, not being a firm or a company, changes the constitution of his concern to a firm or a company, such new firm or new company may, pending the grant of a licence in accordance with these regulations, be permitted to act as Customs House Agent through an employee duly qualified as per regulation 8, with the approval of the Commissioner of Customs. (2) Notwithstanding anything contained in sub-regulation (1), where a licence granted or renewed under these regulations in favour of a person has ceased to be in force because of the death of that person, his legal heir, who is a major and a ‘H’ card holder, may be permitted to work as a Customs House Agent with the approval of the Commissioner of Customs, and such legal heir shall be required to pass the examination referred to in regulation 8 within a period of two years from the date of demise of the original licensee.” We find that prima facie though the Rules do not specifically cover the case of a firm which undergoes a dissolution on account of the retirement or death of a partner as in the present case, there is sufficient guidance 5 indicated in the Rule for allowing an existing partner to continue with a licence provided he is otherwise not disqualified. There is no dispute before us about the qualification of the existing partner, i.e. Shri Ulhas Mohile, to hold the licence. Moreover, the aforesaid Rules indicate that it is not the policy to stop any legal work under a licence merely because of a change in the constitution. In this view of the matter, we make it clear that if otherwise entitled and not disqualified the appellant shall take note of the change in the constitution of the firm notified to them by the respondent no.2 on 5.1.2001 and make the necessary changes. Any renewal shall also be made on the basis of the change. Any action taken shall be subject to the result of this appeal. Order accordingly. JUDGE JUDGE. J.