2022 (2) TMI 372 - HC - Customs

Excess duty drawback - overvaluation of goods - principal allegation against the respondent was that he had not complied the obligations arising under the Regulations 11(b), 11(d), 11(e) and 11(n) of the Customs Brokers Licensing Regulations, 2013 - Regulation 17 of the C.B.L.R., 2018 - HELD THAT:- In the case on hand, the inquiry report is filed on 15.07.2019 and the order of revocation of licence and levying of penalty as provided under Regulation 17(7) and 17(8) has been passed on 15.10.2019. It cannot be disputed that the order under Regulation 17(7) and 17(8) has been passed beyond the period of 90 days. To be precise, the order has been passed on the 92nd day after receipt of the inquiry report.

Whether the time limit for issuing the show cause notice and for completion of the inquiry report and passing of orders after receipt of the inquiry report are mandatory or directory? - HELD THAT:- It is a settled position of law that whenever a statute prescribes or provides that a particular act has to be done within a time frame in a particular manner and also further provides that failure to comply with the requirements of the provision, would lead to a specific consequence then while interpreting such a provision of law, it has to be held that the compliance of the said provision of law is mandatory and not directory and this interpretation is required to be given for the simple reason that the specified consequence would follow if there is no compliance of the provision of law - A reading of Regulation 17 of the C.B.L.R., 2018 makes it very clear that though there is a time limit stipulated in the Regulations to complete a particular act, non-compliance of the same would not lead to any specific consequence.

A reading of the Regulation 17 would also go to show that the Inquiry Officer during the course of his inquiry is not only required to record the statement of the parties but also to give them an opportunity to cross-examine and produce oral and documentary evidence. In the event of the respondents not co operating, it would be difficult for the Inquiry Officer to complete the inquiry within the prescribed period of 90 days, as provided under Regulation 17(5) - though the word “shall” has been used in Regulation 17, an overall reading of the said provision of law makes it very clear that the said provision is procedural in nature and non-compliance of the same does not have any effect. If there is no consequence stated in the Regulation for non-adherence of time period for conducting the inquiry or passing an order thereafterwards, the time line provided under the statute cannot be considered as fatal to the outcome of inquiry.

The provisions of Regulation 17 of the C.B.L.R., 2018 is required to be considered as directory and not mandatory - having regard to the finding of fact recorded by the Tribunal to the effect that the department has failed to provide sufficient evidence to show that the respondent had lent the IEC without proper verification and thereby he had violated Regulation 11(d) of C.B.L.R., 2013, the substantial question of law No.4 becomes only academical in the present case, because the respondent cannot be held guilty on the merits of the case for want of sufficient evidence as recorded by the Tribunal.

The substantial questions of law Nos.1 to 3 answered in favour of the appellant, the finding of fact recorded by the Tribunal on the merits of the case cannot be interfered with for want of sufficient evidence on record and therefore, the appeal has to fail - appeal stands dismissed.