2018 (4) TMI 1053 - HC - Customs

Suspension of CHA License - Time Limitation - Whether the CESTAT is right in law in setting aside the order or suspension of the Custom Broker Licence on the ground of delay between the suspension and the notice of deviation or omission, ignoring that DRI letter dated 24th July 2014 and the Custom Broker Licence was suspended on 8th August 2014? - Regulation 18, Regulation 19 and Regulation 20 of CBLR.

Whether the time line as prescribed in Regulation 20 is directory in nature or is mandatory?

Held that: - when a time limit is prescribed in Regulations, which empowers action in Regulation 18 and procedure in Regulation 20(1), the use of the term “shall” cannot be termed as “directory”.

Adherence to the time schedule prescribed in the Regulation 20 in a rigid way would lead to a situation where non-­compliance with the time frame and even deviation by a single day would resultantly invalidate the entire action and the licence which is under suspension or which is revoked, is liable to be restored. The procedural formality as required to be complied within the time frame prescribed in the regulation, even if it is deviated for whatsoever reason beyond the control of the revenue or the custom house agent would result into consequences of declaring the entire action invalid if the provision is construed as mandatory.

The time limit contained in Regulation 20 cannot be construed to be mandatory and is held to be directory - though the time line framed in the Regulation need to be rigidly applied, fairness would demand that when such time limit is crossed, the period subsequently consumed for completing the inquiry should be justified by giving reasons and the causes on account of which the time­ limit was not adhered to.

CESTAT was not justified in setting aside the order or suspension of the Customs Brokers Licence on the ground of delay between suspension and the notice of deviation or omission and it cannot be laid down as an absolute proposition of law that delay in taking immediate action of suspension or initiation of inquiry within a period of 90 days would vitiate the action of the Commissioner.

Matters are remanded to the CESTAT for fresh adjudication.