2019 (1) TMI 573 - AT - Customs

Revocation of CHA License - forfeiture of security deposit - delay in issuance of inquiry report - time limitation - The Show Cause Notice was issued on 22.02.2017. However the Inquiry Report which should have been issued within ninety days i.e. before 22.05.2017 has been issued only on 06.06.2017 - Imposition of penalty - Held that - The starting point of the proceedings inter alia for imposition of penalty is issue of a Notice within a period of ninety days from the date of receipt of an offence report which requires the Customs Broker to submit within thirty days a written statement of defence etc. to the Deputy Commissioner or Assistant Commissioner nominated by the said Commissioner of Customs. In a number of decisions and judgements higher appellate fora have consistently held that the limitation periods prescribed in the CBLR 2013 are not just directory but on the other hand are mandatory. In the present case the ninety-day period prescribed for submission of the report by the Inquiry Officer has indeed been exceeded possibly because of the first appointed Inquiry Officer going on medical leave for forty five days necessitating the appointment of a second Inquiry Officer. Nonetheless when the prescribed periods are to be considered as mandatory the concerned Custom House/Commissioner in such an eventuality should have immediately taken corrective action and possibly not waited so long for appointment of another Inquiry Officer - the moot point is that the ninety-day limit prescribed in Regulation 20(5) ibid has been breached which cannot be condoned as a curable defect. The entire proceedings have been vitiated by non-adherence to the time-limit for submission of Inquiry Report prescribed in Regulation 20(5) ibid - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Timeliness of the issuance of the Inquiry Report under Regulation 20(5) of the Customs Brokers Licensing Regulations (CBLR), 2013.

Analysis:
The case involved a Customs Broker who was issued a Show Cause Notice proposing revocation of their license, forfeiture of security deposit, and imposition of a penalty under the CBLR, 2013. The Inquiry Officer submitted a report concluding that the charges against the broker were proved, but the extreme punishment of revocation and forfeiture could not be awarded based on case laws cited by the broker. The Commissioner of Customs imposed a penalty of Rs. 30,000 on the broker, leading to the appeal.

The appellant contended that the Inquiry Report was not issued within the prescribed ninety days as per Regulation 20(5) of the CBLR, rendering the penalty imposed under Regulation 18 legally incorrect. The appellant relied on various decisions to support their argument, highlighting the importance of adherence to prescribed time limits in such proceedings.

The respondent, on the other hand, supported the impugned order, stating that while the broker failed to fulfill obligations under the CBLR, the penalty imposed was appropriate considering case laws on the issue. The respondent argued against any further reduction in the penalty amount.

The Tribunal, after considering the arguments, emphasized the mandatory nature of the time limits prescribed in the CBLR, 2013. Referring to previous decisions, the Tribunal reiterated that these time limits are not merely directory but must be strictly adhered to. The Tribunal noted that the ninety-day period for the submission of the Inquiry Report had been exceeded in this case due to the change of Inquiry Officer, leading to a vitiation of the entire proceedings.

Ultimately, the Tribunal held that the breach of the time limit for submitting the Inquiry Report vitiated the proceedings, leading to the setting aside of the impugned order. The appeal was allowed, granting consequential benefits as per the law.

This judgment underscores the significance of strict adherence to procedural timelines in customs proceedings and highlights the consequences of non-compliance with such mandatory requirements.