2021 (2) TMI 899 - AT - Customs

Time limit for issue of Notice - Customs Broker - "Issue of Notice" versus "Service of Notice" - Third Member Bench - Interpretation of Statute - Regulation 20(1) CBLR, 2013 - Whether the word ‘issue’ in Regulation 20(1) CBLR, 2013 should include ‘serve’? - time limit prescribed in Regulation 20(1) CBLR 2013 - mandatory or directory in nature? - whether the expression issue of a notice occurring in regulation 17(1) of the Customs Brokers Licensing Regulations 2018 [2018 Regulations] would mean service of notice? - HELD THAT:- The decision of the Supreme Court in RK UPADHYAYA VERSUS SHANABHAI P. PATEL [1987 (4) TMI 5 - SUPREME COURT] and COLLECTOR OF CENTRAL EXCISE VERSUS MM RUBBER CO. [1991 (9) TMI 71 - SUPREME COURT] and the decision of the Full Bench of the Punjab and Haryana High Court in JAI HANUMAN TRADING CO. PVT. LIMITED VERSUS COMMISSIONER OF INCOME-TAX, PATIALA II AND ANOTHER [1977 (4) TMI 27 - PUNJAB AND HARYANA HIGH COURT] were not brought to the notice of the Bench deciding M/S RP CARGO, HANDLING SERVICES VERSUS COMMISSIONER OF CUSTOMS (AIRPORT & GENERAL) [2019 (5) TMI 80 - CESTAT NEW DELHI]. The Supreme Court in the aforesaid two decisions pointed out that when a statute distinguishes between issue of notice and service of notice by using both the expressions in the statute, the requirement of issue of notice would be satisfied when such notice is actually issued and not when it is served. The Supreme Court also pointed out that when there is a limitation for an authority to make an order, date of exercise of that power is the relevant date for exercise of such power and the decision of such authority comes into force or becomes operative and becomes an effective order on the date when it is signed. Thus, the date of communication of the order to the party is not relevant for the purpose of determination whether the power has been exercised within the prescribed time. However, if the statutory provision protects the interest of the person adversely affected by providing a remedy against the order, the period of limitation would commence from the date of communication of the order.

Thus, in view of the aforesaid decisions of the Supreme Court in R.K. Upadhyaya and M.M. Rubber and Company, which have not been considered in R.P. Cargo Handling, it has to be held that the expression issue in regulation 17(1) of the 2018 Regulations would not mean service of notice. It needs to be noted that regulation 17(1) of the 2018 Regulations is in pari materia with regulation 20 (1) of the 2013 Regulations.

Whether the time limit prescribed in regulation 20(1) of the 2018 Regulations is mandatory or directory in nature? - HELD THAT:- A perusal of the aforesaid judgment in INDAIR CARRIER PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (GENERAL) [2016 (5) TMI 775 - DELHI HIGH COURT] shows that the period of ninety days prescribed for issuance of a show cause notice under regulation 22(1), which provision is similar to the provisions of regulation 17(1) of the 2018 Regulations, was held to be mandatory in nature and, therefore, the directions issued by the Tribunal to complete the proceedings contemplated under regulation 22 within sixty days from the date of receipt of the order of the Tribunal was held not to be correct since the notice contemplated under article 17(1) had not been issued within a period of ninety days from the date of receipt of offence report - The Delhi High Court and the Madras High Court, while dealing with the provisions of regulation 22(1) of the 2004 Regulations and regulation 20(1) of the 2013 Regulations, which are similar to regulation 17(1) of the 2018 Regulations, have held that time limit prescribed for issuance of a notice within ninety days from the date of receipt of the offence report is mandatory in nature and non-compliance of the notice would result in revival of the License.

The Delhi High Court has, in very clear terms, held that the time limit prescribed under the regulations for issuance of the notice within ninety days from the date of receipt of the offence report is mandatory in nature. Such being the position of law, the Licence would automatically stand revived if a notice contemplated under regulation 17(1) of the 2018 Regulations is not issued within ninety days from the date of receipt of the offence report.

The answer to the two issues referred by the Division Bench are, therefore, as follows;

(i) The word ‘issue’ in regulation 17 of the 2018 Regulations or regulation 20(1) of the 2013 Regulations would not include ‘serve’;

(ii) The time limit prescribed in regulation 17(1) of the 2018 Regulations or regulation 20(1) of the 2013 Regulations is mandatory in nature.