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Peirce Leslie India Ltd. Vs. Collector of Customs and Central - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(21)ELT472Tri(Chennai)
AppellantPeirce Leslie India Ltd.
RespondentCollector of Customs and Central
Excerpt:
.....have been made before the date of expiry of the licence, though actual renewal was done at a later date, licences have been renewed. the single case of 1980 was a decision in error which cannot be cited as a precedent.7. it came out on the second date of hearing that the appellants have since been issued a temporary licence for the period january-december 1984 and its continuance would be considered as and when application for renewal is made within the scope of the rules.8. we note that rule 13(3) provides specifically that when a fresh licence has been issued for a period of one year, renewal thereof has to be applied for before the expiry of the period of one year, when it will be renewed for a period of three years. renewals thereafter have naturally to be on the basis of a.....
Judgment:
1. Appeal under Section 129A of the Customs Act, 1962 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the Order No. 237 of 1982, dated 18-5-82 of the Central Board of Excise and Customs with direction to the Collector of Customs, Bangalore to renew the Customs House Clearing Agents licence.

2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri E.S. Govindan, Advocate for the appellant and upon hearing the arguments of Shri V. Ramachandran, Senior Departmental Representative for the respondent, the Tribunal makes the following Order : 3. By Order No. VIII/13/9/78 C. 2 (Cus.)/, dated 3-3-82 the Collector of Customs & Central Excise, Bangalore rejected a request from M/s.

Peirce Leslie India Ltd. (appellant herein) for renewal of a Custom House Agents Licence No. 2/77 for the period beginning 4-2-81 on a short point that any application for renewal of the licence should have been submitted before the date of its expiry ; in this case the licence expired on 3-2-81 whereas the application for renewal was made on 24-3-81. In appeal the Central Board of Excise and Customs confirmed the action of the Collector observing that, "as the licence held by the appellants had expired by the time an application for renewal was made, the Collector correctly rejected the application for renewal as there was no licence to be renewed." Against this order of the Board the appellants have come up before the Tribunal.

4. (i) The learned counsel for the appellant urged that Rule 13(3) of the Custom House Agents Licensing Regulations, 1965 deals with renewal of licences. It is, no doubt, true that the application for renewal was made on 24-3-81 whereas the existing licence of the appellant had expired on 3-2-81. However, the delay was due to the appellant having to submit a solvency certificate and Income-tax certificate ; obtaining these certificates took time and hence a delay of 49 days in the application.

(ii) According to Rule 13(3) for renewal of a licence issued for the first time and which is valid for a period of one year an application has to be made to the Collector before the expiry of that licence.

However, no particular time has been prescribed for renewal of a licence thereafter. All that the Rule states is, "be renewed for a period of three years and thereafter every three years". Sub-rule (6) provides that the Collector may refuse to renew a licence based on the volume of business transacted by the licensee during the period when the licence was operative. There is no other provision in the Rules for rejection of an application for renewal. It will be noted from the copy of the licence submitted that initially it was issued for a period of one year with effect from 3-2-77 ; thereafter it was renewad for the period 4-2-78 to 3-2-81 on 10-7-78-the date of renewal is subsequent to the date of expiry of the licence. It would, therefore, be seen that the practice of the Custom House is not to refuse to renew the licence merely because it had expired. As valid reasons have been given for the delay in submitting the application for renewal, the counsel for the appellant urged that the licence ought to have been renewed for the period beginning 4-2-81.

5. The SDR, on the other hand, stressed that what has been observed by the Board would be the correct position. When there is no existing licence there will be nothing to be renewed and in this case even the application for renewal was made after the date of expiry.

6. To examine the plea made by the counsel for the appellant that the Custom House does renew a licence irrespective of its date of expiry, we had asked for further data to be submitted by the SDR. This was done today, the date of second hearing. The SDR reported that there were five cases of renewal in 1980 and in four of them applications were made before the expiry of the existing licence. In one case the application was made after the date of expiry. All the licences were renewed. In 1981 there were six cases in all of which application was made before the date of expiry of the respective licences. SDR urged that only in cases where applications have been made before the date of expiry of the licence, though actual renewal was done at a later date, licences have been renewed. The single case of 1980 was a decision in error which cannot be cited as a precedent.

7. It came out on the second date of hearing that the appellants have since been issued a temporary licence for the period January-December 1984 and its continuance would be considered as and when application for renewal is made within the scope of the Rules.

8. We note that Rule 13(3) provides specifically that when a fresh licence has been issued for a period of one year, renewal thereof has to be applied for before the expiry of the period of one year, when it will be renewed for a period of three years. Renewals thereafter have naturally to be on the basis of a particular licence. There is considerable strength in the stand of the department that a person who desires continuation of an existing licence should apply for it before the expiry of the licence itself. It would, of course, be desirable that the actual renewal is also made before the expiry of the licence so that there is no interim period when a legal and valid document namely, a licence is not in the hands of the licence-holder. However, in cases where an application has been made in time and the actual renewal is made after the date of expiry, one could take the view that delay on the part of the department should not be pleaded by it against the interests of an applicant particularly when there nothing else is adverse to the issue of a licence. However, when the default is on the part of the licensee himself in that he does not apply for the renewal within the date of the expiry of the licence, the department cannot take a final decision regarding renewal within the period of validity of the licence. Refusal to renew of a licence which has already expired is an action that can be supported. Though in the appeal the loss to which the appellant is put to, since the licence has not been renewed has been adverted to, we take note that the appellant is currently in possession of a licence which would be considered for renewal at the end of this year and hence the plea of grave damage to the appellant by non-renewal would not exist at present.


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