2023 (3) TMI 250 - HC - Customs

Time Limitation to issue SCN to a Customs Broker (from date of receipt of offence report) - whether the learned Tribunal was correct in holding that a show cause notice under Regulation 20 of the Customs Brokers Licensing Regulations, 2013 (CBLR) is required to be received by the customs broker within a period of ninety days of the receipt of the offence report and it is not sufficient that the notice is sent within the said period of ninety days?

Whether the word ‘issue’ is required to be construed as ‘served’?

HELD THAT:- As it would be apparent in the facts of the present case, notice was, in fact, issued within the period of ninety days as contemplated under Regulation 20(1) of the CBLR. Attempts to deliver the said notice to the respondent were also made within the said period but the notice could not be delivered by the postal authority as the premises of the respondent was found closed. Clearly, the question whether the procedure under Regulation 20 of the CBLR is triggered within time is not dependent on the customs broker receiving the notice - there are no reason to interpret the word ‘issue’, as used in regulation 20(1) of CBLR, in any way other than its plain meaning. In the context of issue of summons or notices, the same would be issued when they are prepared and put in the course for communicating to the recipient.

In Banarsi Debi [1964 (3) TMI 11 - SUPREME COURT], the date of the notice for re-opening the assessments was within the eight years from the end of the relevant Assessment Year but the same was served beyond the period of eight years. One of the questions that arose for consideration of the court in that case related to the interpretation of Section 4 of the Indian Income Tax (Amendment) Act, 1959 (hereafter ‘the Amending Act’). The object of the said Section was to save the validity of the notices which were issued beyond the prescribed time. Section 4 of the Amending Act used the word ‘issue’. The court held that if the narrow meaning is given to the expression ‘issue’, the Section would be unworkable because the objective of the Amending Act was to save the validity of the notices issued under Section 34(1) of the Income Tax Act, 1922, which were beyond the period of eight years. It is in that context that the court held that the word ‘issue’ under Section 4 of the Amending Act was used interchangeably as ‘served’, as the object was to save the notices which were served beyond the period of eight years. The court held that it was obvious that the expression ‘issue’, as used in Section 4 of the Amending Act, was not used in a narrow sense of ‘sent’ as the principal Section 34(1) of the Income Tax Act, 1922 required the notice to be served within the prescribed period (eight years).

In the present case, there is no ambiguity in the language of Regulation 20(1) of the CBLR. It requires that the Commissioner issues a notice within the period of ninety days from the receipt of the offence report. There is, thus, no reason to construe the expression ‘issue’ any different from its plain meaning. The decision of the Supreme Court in R.K. Upadhyaya8 also recognizes that the plain meaning of the expression ‘issuance of notice’ would be to dispatch the same.

The learned Tribunal has erred in holding that the Commissioner was required to serve a notice to the respondent within a period of ninety days from the date of receipt of the offence report. The Commissioner was required to issue a notice within the period of ninety days and there is no dispute that it had done so - The impugned order is set aside and the matter is remanded to the learned Tribunal to consider the respondent’s appeal on merits - Appeal allowed by way of remand.