IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27-11-2009 CORAM THE HONOURABLE MR.H.L.GOKHALE, CHIEF JUSTICE AND THE HONOURABLE MR.JUSTICE N.PAUL VASANTHAKUMAR W.A.Nos.498 & 1125 of 2009 W.P.Nos.10330, 12240 & 13366 of 2009 and Connected Miscellaneous Petitions W.A.No.498 of 2009 C.V.Karunakaran ...Appellant Vs. 1. The Chairman, Central Board of Excise and Customs, New Delhi. 2. The Commissioner of Customs, Customs House, No.60 Rajaji Salai, Chennai – 1. 3. The Assistant Commissioner of Customs, Custom House Agent Unit, Customs House, No.60 Rajaji Salai, Chennai – 1. ...Respondents This writ appeal is filed under Clause 15 of the Letters Patent against the order of the learned single Judge dated 15.4.2009 made in W.P.No.336 of 2009. W.A.No.1125 of 2009 S. Alexander ... Appellant Vs. 1. The Chairman, Central Board of Excise and Customs, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. The Commissioner of Customs, Customs House, No.60 Rajaji Salai, Chennai – 1. https://hcservices.ecourts.gov.in/hcservices/ 3. The Assistant Commissioner of Customs, Custom House Agent Unit, Customs House, No.60 Rajaji Salai, Chennai – 1. ...Respondents This writ appeal is filed under Clause 15 of the Letters Patent against the order of the learned single Judge dated 15.4.2009 made in W.P.No.341 of 2009. Prayer in W.P.No.336/09 and W.P.No.341/2009 Writ of certiorarifed mandamus calling for the records of the first respondent regarding the public notification No.140/08 dated. 31.12.2008 pursuant to the framing of the regulations 9(1) of the customs House Agent Licensing regulations, 2004 quash the regulation 9(1) giving rise to the public notification no.140/08 dated. 31.12.2008 and consequently direct the respondents to treat the person who passed the qualifying examinations held under regulation-9 of the Customs House Agent, licensing regulation 1984 on par with the persons who had passed the qualifying examination under Rule 8 of the Customs House Licensing Regulation 2004 in so far as the petitioner is concerned. W.P.No.10330 of 2009 V. Rajendran ...Petitioner Vs. 1. The Commissioner of Customs (Imports), Customs House, No.60, Rajaji Salai, Chennai – 600 001. 2. The Chairman, Central Board of Excise & Customs, Ministry of Finance, Department of Revenue, North Block, New Delhi – 110 001. ...Respondents This writ petition is filed under Article 226 of the Constitution of India, praying this Court to quash the Public Notice No.140/2008 dated 31.12.2008 issued in F.No.S.Misc.20/2007-CHA and to direct the first respondent to accept the candidature of the petitioner for grant of licence under Regulation 9(1) of the CHARL, 2004, so as to act as Custom House Agent. https://hcservices.ecourts.gov.in/hcservices/ W.P.No.12250 of 2009 Ranjeet Jacob ...Petitioner Vs. 1. The Commissioner of Customs (Imports), Customs House, No.60, Rajaji Salai, Chennai – 600 001. 2. The Chairman, Central Board of Excise & Customs, Ministry of Finance, Department of Revenue, North Block, New Delhi – 110 001. ...Respondents This writ petition is filed under Article 226 of the Constitution of India, praying this Court to quash the Public Notice No.140/2008 dated 31.12.2008 issued in F.No.S.Misc.20/2007-CHA and to direct the first respondent to accept the candidature of the petitioner for grant of licence under Regulation 9(1) of the CHARL, 2004, so as to act as Custom House Agent. W.P.No.13366 of 2009 T.N.Rajagopalan ... Petitioner Vs. 1. The Chairman, Central Board of Excise & Customs, Ministry of Finance, Department of Revenue, North Block, New Delhi – 110 001. 2. The Commissioner of Customs (Imports), Customs House, No.60, Rajaji Salai, Chennai – 600 001. ...Respondents This writ petition is filed under Article 226 of the Constitution of India, praying this Court to issue a writ of Certiorari calling for the records on the file of the first respondent and to quash the Public Notice No.140/2008 dated 31.12.2008 issued in F.No.S.Misc.20/2007-CHA and to direct the second respondent to accept the candidature of the petitioner for grant of licence under Regulation 9(1) of the CHARL, 2004, so as to act as Custom House Agent. https://hcservices.ecourts.gov.in/hcservices/ For Appellants in : Mr.Joseph Prabakar W.A.Nos.498 & 1125/2009 Mr.P.Saravanan & Petitioner in W.P.13366/2009 For Petitioners in : Mr.Hari Radhakrishnan W.P.Nos.10330 & 12250/2009 For Respondents in both : Mr.K.Ravi Anantha Padmanaban Writ Appeals & Writ petitions COMMON JUDGMENT N. PAUL VASANTHAKUMAR, J. The above writ appeals are directed against the common order passed in W.P.Nos.336 and 341 of 2009, dismissing the writ petitions filed by the appellants herein. 2. In W.P.Nos.10330, 12250 and 13366 of 2009, the petitioners seek to quash the public notice No.140/2008 dated 31.12.2008 and to direct the first respondent therein to accept the candidature of the petitioners for the grant of licence under Regulation 9(1) of the CHARL, 2004 so as to act as Customs House Agent. 3. Since the issues involved in the writ petitions as well as in the writ appeals are identical, both the writ petitions and writ appeals are heard together and this Common Judgment is passed. 4. (i) The case of the appellants and the writ petitioners is that they are engaged in the work of clearance of goods through Customs for the past several years and they are claiming that they have all passed the examination prescribed as per Regulation No.9 of the Customs House Agent Licensing Regulations (CHALR), 1984, which was framed under section 146(2) of the Customs Act, 1962. According to the appellants/petitioners, regular licences are to be issued only to those persons, who are qualified as per the examinations referred to in Regulation 9 of 1984. (ii) The Central Board of Excise and customs made a new regulation called 'Customs House Agent Licensing Regulations, 2004' pursuant to the recommendations of the High Power Committee to simplify the processes and procedures for the grant of CHA licences. Under Regulation 9 of 2004, a candidate applying for licence must pass the examination in terms of Regulation 8 thereof for getting licence and the 1984 procedures for the grant of licence viz., first granting a temporary licence before passing the qualifying examinations, and then granting a regular licence after passing qualifying examinations within a year, has been done away with. A https://hcservices.ecourts.gov.in/hcservices/ clarificatory circular was issued on 10.6.2004 and the Board also issued instructions on 31.10.2007. In Public Notice No.140 of 2008 dated 31.12.2008, the second respondent invited applications for the grant of licence only from the persons qualified under Regulation 8 and as per the said notification, the persons qualified under Regulation 9 of 1984 were rendered ineligible. (iii) According to the appellants/petitioners, between the years 1998 and 2004, the second respondent did not invite new applications and therefore they could not apply for issuance of licence, even though they have passed the examinations under Regulation No.9 of 1984. According to the appellants/petitioners the syllabus or subject for the examinations provided under Regulation 9(3) of 1984 and Regulation No.8(6) of 2004 are almost same. The new subjects added are Online filing of Electronic Shipping Bills or Bills of Entry and Indian Customs and Central Excise Electronic Commerce/Electronic Date Interchange Gateway (ICEGATE) and Indian Customs Electronic Date Interchange Systems (ICES) and the provisions of Prevention of Corruption Act, 1988. According to the appellants/petitioners, the preamble of Regulations, 2004, gives protection to the appellants/petitioners since it provides that actions which had been taken or omitted to be taken are saved. However, the second respondent is not giving effect to this beneficial provision and therefore the appellants are affected. It is submitted that the appellants are entitled to be treated on par with other persons, who had passed the examinations conducted under Regulation 8 of the Regulations, 2004, while granting licence pursuance to the issuance of Public Notice No.140 of 2008, dated 31.12.2008. By making the above averments the appellants/petitioners filed the writ petitions. 5. The third respondent in the writ appeals filed counter affidavit before the learned single Judge by contending that mere passing the examination conducted under Old Regulation No.9, without obtaining a permanent licence under the said regulation will not confer any right to the appellants merely because the second respondent did not call for any application for issuing such licence till 31.12.2008, and the appellants having not been issued with licences and the new regulation having come into force, which prescribed a new syllabus/subject for the examination, anybody intending to get licence shall pass the same. It is also stated that with the advent of Intellectual Property Sector and other Global Evolution towards Technology, Medicine, etc, the Government of India appointed a High Power Committee and based on its recommendations new regulation was issued with effect from 23.2.2004. The appellants having not been issued or possessed with permanent licence, they are bound to apply, if they are qualified and undergo the process of selection and then only they can be given the licence under the present regulation. The contention of the appellants that 2004 Regulations protects their rights cannot be accepted as they were not https://hcservices.ecourts.gov.in/hcservices/ granted licence till 23.2.2004 and the decisions of the Delhi High Court reported in 2006 (195) 15 ELT (Sunil Kohli v. Union of India) is not applicable to the facts of these cases as the applications were invited for the grant of licence under Regulation 1984 in June, 2003. Here in this case, no application was invited under the old regulation and only in the year 2008 applications were invited. It is further stated that it is the policy decision of the Government of India that petitioners who were intending to get licence are bound to comply with the provisions under the 2004 Regulations. 6. The learned single Judge accepted the contentions of the respondents and dismissed the writ petitions filed by the appellants along with other connected writ petitions. The said order is challenged in these writ appeals by contending the very same grounds raised in the writ petitions. 7. The learned counsels for the appellants/writ petitioners M/s.Joseph Prabakar, P.Saravanan and Hari Radhakrishnan, submitted that the appellants/writ petitioners having passed the examinations held under the 1984 Regulations and the respondents having failed to invite applications for issuing licence from 1994 onwards, the appellants/writ petitioners are entitled to get the licence under 1984 Regulations and they have got a vested right and legitimate expectation to get licence. The Preamble of 2004 Regulations gives protection to the persons, who have already passed the examinations and the omission to invite applications and issue licence by the respondents cannot be put against the appellants. The learned counsel also submitted that only two papers are added from the earlier subjects for the examinations, and the appellants having got long experience, they shall not be treated as fresh candidates. The examinations passed under Regulation 9 of 1984 can be treated as the examinations passed under Regulation 8 of 2004. The learned counsels also submitted that the Delhi High Court and Punjab & Haryana High Court have extended the benefit to similarly placed persons and depriving the same to the appellants is in violation of Article 14 of the Constitution of India. The learned counsels also submitted that the learned single Judge having noted the said fact, ought to have granted the benefits to the appellants instead of directing the Central Board of Excise and Customs to examine the matter and come up with a scheme to remove the difficulties of the appellants while implementing 2004 Regulations as in other areas in Delhi and Punjab. 8. Mr.K.Ravi Anantha Padmanaban, learned counsel appearing for the respondents submitted that merely because the appellants/writ petitioners have passed the examination under the old regulations and they having not been issued with licence under the said regulations, they cannot claim to seek a relief to treat the said examination as the examination conducted under Regulation No.8 of 2004. The appellants/ writ petitioners are bound to pass the examination under Regulation No.8 of 2004, which contains new subjects as per the https://hcservices.ecourts.gov.in/hcservices/ present requirement. The appellants cannot contend that the examination they have passed earlier is saved as per the preamble of 2004 Regulations. The learned counsel also submitted that the learned single Judge was perfectly right in dismissing the writ petitions as it is a policy decision taken by the Government of India, pursuant to which the new regulation was issued. The learned counsel also submitted that pursuant to the direction issued by the learned single Judge to consider the claim of the appellants, as it was extended to Delhi and Punjab, the matter was discussed by the Central Board of Excise and Customs and the Board took a decision that the appellants shall pass the examination under the new regulations. In the Judgment of the Delhi and Punjab & Haryana High Courts, the facts are entirely different, where the notification was issued inviting applications prior to the coming into force of the 2004 Regulations and took a decision stating that it is not possible to issue licence to the appellants without passing the examination under the new regulations with new subjects like Export Oriented Scheme, Computerisation and Prevention of Corruption Act, 1988, and there will be large number of candidates throughout India similar to the appellants/writ petitioners. 9. We have considered the rival submissions of the respective counsels. 10. The appellants/writ petitioners are graduates and authorised employees of a Licensee actually engaged in the clearance of goods or conveyance through the Customs Department. As the appellants are employees of the Licensees, they need not obtain temporary licence. However, they are required to get licence under Regulation 9 of 1984 and they have to pass the qualifying examinations. The syllabus/subjects in which they were to pass the written examination was also stated in Regulation 9(3) (a) to (p), which read as follows: "9(3) The examination may include questions on the following:- (a) preparation of various kinds of bills of entry and shipping bills; (b) arrival entry and clearance of vessels; (c) tariff classification and rates of duty; (d) determination of value for assessment; (e) conversion of currency; (f) nature and description of documents to be filed with various kinds of bills of entry and shipping bills; (g) procedure for assessment and payment of duty; (h) examination of merchandise at the Customs Stations; (i) provisions of the Trade and Merchandise Marks At, 1958 (43 of 1958); (j) prohibitions on import and export; (k) bonding procedure and clearance from bond; https://hcservices.ecourts.gov.in/hcservices/ (l) re-importation and conditions for free re- entry; (m) drawback; (n) offences under the Act; (o) the provisions of allied Acts including Imports and Exports (Control) Act, 1947 (18 of 1947), Foreign Exchange Regulation Act, 1973 (46 of 1973), Indian Explosives Act, 1884 (4 of 1884), Arms Act, 1959 (54 of 1959), Opium Act, 1978 (1 of 1878), Drugs and Cosmetics Act, 1940 (23 of 1940) Destructive Insects and Pests Act, 1914 (2 of 1914), Dangerous Drugs Act, 1930 (2 of 1930) in so far as they are relevant to the clearance of goods through customs; (p) procedure in the matter of refund of duty paid, appeals and revision petitions under the Act." After passing the said examinations one has to apply for the grant of regular licence under Regulation 10 in Form 'B'. Regular licences are issued for the Customs House Agents on the basis of the applications invited, depending upon the necessity to issue number of licences. The licences issued under Regulation 10 would be valid for a period of five years subject to renewal. 11. Admittedly the appellants/writ petitioners have passed their written examinations based on the subjects/syllabus mentioned under 1984 Regulations. No notification inviting applications for issuing regular licences was issued after 1998 till 2008, as there was no necessity to issue any more licence during the said period. Section 146(1) of the Customs Act, 1962, provides that no person shall carry on business as Customs House Agent, unless he holds a licence granted in this behalf in accordance with the regulations. Section 146(2)(a) provides that the Central Board of Excise and Customs may make regulations providing for the authority, by which a licence may be granted under this section and the period of its validity. Regulation 4 of 1984 provides inviting applications for the grant of such number of licences as assessed by the Commissioner, to act as Customs House Agents in the month of January every year by means of a notice affixed on the notice board of each Customs Station as well as through publication in at least two newspapers having circulation in the area of his jurisdiction specifying therein the last date of receipt of application. Thus, the respondents were not bound to invite application for regular licences. Regulation 4 of 2004 also provides for inviting applications for the grant of such number of licences as assessed by the Commissioner, to act as Customs House Agents in the month of January every year by means of a notice affixed on the notice board of each Customs Station as well as through publication in at least two newspapers having circulation in the area of his jurisdiction, specifying therein the last date of receipt of application. https://hcservices.ecourts.gov.in/hcservices/ 12. Due to the practical difficulties experienced by the respondents, the Government of India, constituted a High Power Committee on reduction of transaction cost on Indian Exports to suggest measures. The same was followed by another Committee called "Kelkar Committee" on indirect taxes, which suggested measures for simplifying the processes and procedures for the grant of licences to Customs House Agents. In order to implement the recommendations of the said Committees, the Central Board of Customs and Excise issued Regulations in the year 2004 and the said regulations came into force with effect from 23.2.2004. Circular No.42 of 2004 was also issued on 10.6.2004 by way of clarification. As per the regulations issued in Notification No.21 of 2004 dated 23.2.2004, discretion is vested with the Commissioner of Customs to invite applications for the grant of such number of licences as assessed by him to act as Customs House Agents. 13. Under Regulation 8 of 2004 it is stated that a person, who applies for the issuance of licence shall be required to apply for written as well as oral examinations conducted by the Director General of Inspection at the specified centres and specified dates and an applicant shall be allowed a maximum period of seven years within which he should pass both written as well as oral examinations. Regulation 8(6) contain syllabus/subjects for the examinations to be passed under 2004 Regulations, which reads as follows: "8(6) The Examination may include questions on the following:- (a) preparation of various kinds of bills of entry and shipping bills; (b) arrival entry and clearance of vessels; (c) tariff classification and rates of duty; (d) determination of value for assessment; (e) conversion of currency; (f) nature and description of documents to be filed with various kinds of bills of entry and shipping bills; (g) procedure for assessment and payment of duty; (h) examination of merchandise at the Customs Stations; (i) provisions of the Trade and Merchandise Marks Act, 1958 (43 of 1958), the Patents Act, 1970 (39 of 1970) and the Copy Rights Act, 1957 (14 of 1957). (j) prohibitions on import and export; (k) bonding procedure and clearance from bond; (l) re-importation and conditions for free re- entry; (m) drawback and export promotion schemes; (n) offences under the Act; https://hcservices.ecourts.gov.in/hcservices/ (o) the provisions of allied Acts including the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), the Central Excise Act, 1944 (1 of 1944), Foreign Exchange Management Act, 2000 (42 of 1999), the Indian Explosives Act, 1884 (4 of 1884), the Arms Act, 1959 (54 of 1959), the Narcotics Drugs and Psychotropic Substances Act, the Drugs and Cosmetics Act, 1940 (23 of 1940), Destructive Insects and Pests Act, 1914 (2 of 1914), the Dangerous Drugs Act, 1930 (2 of 1930), in so far as they are relevant to the clearance of goods through customs; (p) provisions of the Prevention of Corruption Act, 1988 (49 of 1988); (p) procedure in the matter of refund of duty paid, appeals and revision petitions under the Act. (q) on-line filing of electronic shipping bills or bills of entry and Indian Customs and Central Excise Electronic Commerce/Electronic Date interchange Gateway (ICEGATE) and Indian Customs Electronic Date Interchange Systems (ICES)." After passing the above examinations licence would be granted under Regulation 9. The issuance of Temporary licence, which was prevailing under Regulations of the year 1984 is not contained in 2004 Regulations. As can be seen, the subjects/syllabus are also changed and new subjects are added. Thus, there is change in the conduct of examinations for the issuance of licence for Customs House Agents. 14. The appellants/writ petitioners' contention that they having passed the examinations under Regulations, 1984, they should be treated as passed the examination under Regulation No.8 of 2004 for the grant of licence cannot be accepted in view of the fact that pass in the examinations of 1984 Regulations is only an eligibility to apply for the grant of regular licence. The eligibility for the grant of licence under Regulation No.9 of 2004 has been changed viz., 'must have passed graduation from a recognised University and possess a professional degree viz., C.A., M.B.A., L.L.B. or Diploma in Customs Clearance Work from any Institute or University recognised by the Government with working knowledge of computers and customs procedures, (or) a graduate having at least three years experience in transacting customs House Agents, work as "G" card holder, (or) a person who has passed the examinations referred to in Regulation 8 (or) https://hcservices.ecourts.gov.in/hcservices/ a retired Group-A Officer of the Indian Customs and Central Excise Service having minimum of ten years experience in Group-A, apart from having financial viability and he should be a citizen of India.' From the above qualifications prescribed for applying for written examinations, it is evident that the entire eligibility requirement is changed and there is no provision for issuing temporary licence and the only licence contemplated is the regular licence. 15. The issue as to whether a person, who passed examination under the 1984 Regulations, is automatically entitled to get licence under the 2004 Regulation was considered by the Ministry of Finance Central Excise and Customs, New Delhi, in the circular dated 10.6.2004 and it is clarified as follows: Issue Raised Comments Regulation 8 1. Regulation 8 passed persons are eligible as applicants for the licence. Can the applicant be a Regulation 8 passed person from a different commissionerate ? No, because the exam is to be taken only in respect of persons who have applied after the notice is published by the Commissioner of customs for work within his jurisdiction under regulation 4. 6. Can the provisions of CHALR 1984 relating to licence holders, regulation 9 qualified persons, 'H' and 'G' card holders be treated at par with holders of the same under CHALR 2004 ? They will be governed by the corresponding provisions of CHALR 2004. Thus, the very same issue raised by the appellants were considered and rejected by the Central Board of Excise and Customs, as early as in the year 2004. 16. The contention of the appellants/writ petitioners that they being eligible for issuance of licence under the 1984 Regulations, they should be issued with licence treating them as passed the examinations conducted under Regulation 8 of 2004, cannot be countenanced in view of the change of eligibility criteria as well as the subject/syllabus for the examinations. The respondents are justified to change the eligibility criteria, particularly after the Committees have recommended, and the same is given effect to taking note of the present day intricacies of law, which the Customs House Agents are bound to have knowledge. It is also not the case of the appellants that the respondents are not having jurisdiction to change the eligibility criteria for the issuance of licence. The respondents having taken a policy decision to change the eligibility condition as well as procedures for issuance of the CHA Licence, the policy decision cannot be questioned by the appellants and in any event the said policy decision is not unreasonable or arbitrary in any manner. https://hcservices.ecourts.gov.in/hcservices/ 17. The contention of the appellants that they have got a vested right to get licences