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2019 (10) TMI 504 - CESTAT NEW DELHIAction against the Customs Broker (CB) - Time limitation - enquiry report was submitted after expiry of 90 days - SCN was issued on 10.08.2013 and the offence report was got prepared on 06.12.2013 - Diversion of goods stored in Custom Bonded Warehouses into domestic market - forged/fabricated documents to show the re-export of warehoused goods - evasion of Customs Duty. Whether the time frame prescribed in Regulation 20(5) is mandatory or directory i.e., whether the time therein be so strictly construed so as to result in declaring initiation of action itself invalid, if that is not adhered to? HELD THAT:- It is mandatory for the Court to look into the nature of the statute and the consequences which would follow from construing it in one way or the other, the ambit of the other provisions, the necessity of compliance of the provisions in question. Above all, whether the object of the enactment is defeated by holding it to be directory and whether the object would be achieved by construing it to be mandatory has to be considered. For the object of time limit in Regulation 20 of CBLR, 2019/2018 we opine that said time limit is evolved so that the inquiry and proceedings are not delayed indefinitely as it hampers the brokerages of the customs broker. At the same time, the time limit should not be so strictly adhered to, even in cases of serious lapse on the part of the customs broker and where the inquiry involves certain complicated facts. Merely because the inquiry was not completed within a stipulated period, the customs broker may not be allowed to walk free, as his suspension cannot be continued beyond the period prescribed in the Regulation and his licences need not be restored. The judgments on which reliance had been placed by the appellant taking a view that the revocation of a CHA license is bad in law since the time limit for completion of inquiry in terms of Regulation 20(5)/22(5) of CBLR, 2013/2018 has not been adhered to, are not applicable to the facts of the present case as most of these cases have dealt with the extraordinary delay caused at the instance of the revenue in conducting inquiry against the custom house agent, depriving them of their means of livelihood and it was observed that the purpose of prescribed time limit was to safeguard the interest of the custom broker and smooth import and export of goods - Whereas, present is the case of alleged fraud on part of the appellant. Adjudicating Authority has clearly observed the delaying strategy of the appellant’s Director. Section 17 of Limitation Act while talking about effect of fraud or mistake lays that the fraud vitiates the limitation prescribed. Thus, those are not applicable to the present case. The intention of CB to not to enable the Department to adhere to the impugned time limit despite that the illegal act of diverting the warehoused goods to domestic market was alleged against the said CB, the time line of Regulation 20(5) CBLR, 2013 is mere directory in nature and the non compliance thereof shall not vitiate the action taken against the defaulting CB. The cancellation of appellants licence with the forfeiture of the security deposit and the imposition of penalty upon the appellant is therefore, held to be sustainable - appeal dismissed.
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