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2016 (12) TMI 1156 - CESTAT MUMBAI

2016 (12) TMI 1156 - CESTAT MUMBAI - TMI - Revocation of CHA licence - forfeiture of security deposit - Regulation 19 (1) of CBLR, 2013 - Time limitation - The Ld. Counsel emphatically argued the case on limitation i.e. right from initiation of the proceedings till the passing of order of revocation of CB Licence of the Appellant, the department has not complied with the condition of the time limit prescribed not only for stage wise time limitation but also for over all time limit of 9 months fo .....

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ine prescribed in the regulation but also disobeyed the direction given by the Commissioner to the inquiry officer. The Ld. Commissioner passed the order for revocation of the CB licence on 02.07.2015. The overall period prescribed for the entire proceeding is 9 months or 270 days from the date of receipt of offence report. As the facts discussed above the total period taken for entire proceeding till the date of passing of order is 728 days. The order for revocation was passed beyond the prescr .....

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taken under such law that will prevail even over the provision of limitation Act. The CHALR/CBLR, 2013 have been enacted under the Custom Act 1962. - Under no circumstances time limit prescribed under any statutory provision can be relaxed. Therefore the commissioner was bound to insure that the entire preceding should have been completed within overall stipulated 270 days, which the adjudication authority failed to comply. Therefore the order of revocation passed after stipulated period of .....

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Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri. S.N. Kantawala, Advocate for the Appellants Shri. D.K. Sinha, Asstt. Commissioner(A.R.) for the Respondent Per : Ramesh Nair The appeal is arising out of the OIO No. 39/CAC/CC(G)/SRP/CBS(Admn) dated 02.07.2015 passed by Commissioner of Customs (General) New Customs House, Mumbai, by which the Ld. Commissioner ordered the revocation of C.B. Licence of the Appellant, and also ordered of forfeiture of entire amount of security de .....

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(erstwhile regulation the CHALR 2004). The statements of following persons involved in the case of gross undervaluation were obtained from the DRI, Mumbai on 5.07.2013. i) Statement dated 15.02.2012 of Shri Vinesh Naresh Chedda ii) Statement dated 14.03.2012 of Shri Saleem Roshan Ali, Manager of M/s. Charania Associates iii) Statement dated 19.03.2012 of Shri Zulfikzar M. Charania (Licence holder of M/s. Charania Associates). From the above statements recorded under Section 108 of the Customs Ac .....

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CHALR 2004), after granting personal hearing to the C.B (CHA) on 22.08.2013. Subsequently enquiry proceedings under Regulation 20 of the CBLR 2013 (erstwhile Regulation 22 of CHALR, 2004), were initiated against the C.B. vide Notice dated 04.10.2013. Accordingly, Article of charges were framed against the Customs Broker for violation of Regulation 11(a), 11(d), 11(m) and 11(n) of CBLR, 2013 (erstwhile Regulation 13 (a), 13 (d), 13(n) and 13(o) of CHA LR 2004), on the allegation that CB (CHA) had .....

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he CB (CHA) has flagrantly violated the KYC norms, thereby rendering the CB(CHA) Firm liable for violation of Regulation 11(n) of CBLR 2013. 3. On the above charges the Inquiry Officer submitted his report dated 13.04.2015 received in the office of the Commissioner on 17.04.2015, wherein he held that all the Article of charges have been passed against the CB (CHA). 4. The advocate of the CB (CHA) submitted a written submission on 04.06.2015, wherein the submission was made on delay in entire pro .....

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ant is before us. 5. Shri Sujoy Kantawala Ld. Counsel appearing on behalf of the Appellant submits that the revocation of licence is illegal in as much as the entire proceeding right from the receipt of the offence report upto the passing of the impugned order, the statutory time line prescribed under the Regulation was not adhered to by the department. He submits that at every stage i.e. issuance of the Show Cause Notice, preparation of report of inquiry and passing of the Order-in-Original was .....

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ner of Customs, Jodhpur 2015-TIOL-1166-CESTAT-DEL (iii) M/s. Lohia Travels and Cargo Vs. Commissioner of Customs (General), New Delhi 2015-TIOL-2467-CESTAT-DEL (iv) Commissioner of Customs (General) Vs. Sainath Clearing Agency 2015 (326) E.L.T. 548 (Bom.) (v) Ajay Clearing Enterprise Vs. Commissioner of Customs (General) 2016 (336) E.L.T.33 (Bom.) (vi) A Tajudeen Vs. Union of India 2014-TIOL-85-SC-FEMA He further, submits that the entire case was decided on statements of various persons. However .....

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reiterates the findings of the impugned order. He further submits that as regard the submission of the Ld. Counsel on limitation, the time limit prescribed in the regulation is directory and not mandatory. Therefore only for non following the time limit prescribed for inquiry under the CBLR 2013 the entire proceeding will not vitiate. The offence on the part of the appellant is very grave in the nature therefore entire proceeding cannot be dropped only on the limitation. He placed reliance on t .....

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. 457 (Guj.) (vi) Skyways Vs. Commissioner of Customs (Gen.), New Delhi 2004 (163) E.L.T. 474 (Tri.Del.) (vii) Daroowala Brothers & Co. Vs. Commr. Of Cus. (General), Mumbai 2010 (249) E.L.T. 310 (Tri.Mumbai) (viii) K.M. Ganatra & Co. Vs. Commissioner of Customs (G), Mumbai 2007 (219) E.L.T. 316 (Tri.-Mumbai) (ix) Commissioner of Customs (G), Mumbai Vs. K.M. Ganatra & Co. 2010 (254) E.L.T. 454 (Bom.) (x) Commissioner of Customs Vs. M/s. K.M. Ganatra & Co. 2016-TIOL-13-SC-CUS (xi) .....

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the case on limitation i.e. right from initiation of the proceedings till the passing of order of revocation of CB Licence of the Appellant, the department has not complied with the condition of the time limit prescribed not only for stage wise time limitation but also for over all time limit of 9 months for revocation of CB License. Therefore, the impugned order is not sustainable only on time limit without going into the merit of the case. Therefore we take up the case for decision on limitati .....

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lation 22. For ready reference Regulation 22 is reproduced as under: "22. Procedure for suspending or revoking licence under Regulation 20- (1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent within ninety days from the date of receipt of offence report, stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit within thirty days to the Deputy Commissioner of Customs or Assistant C .....

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use Agent, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to .....

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the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording his findings and submit his report within ninety days from the date of issue of a notice under sub-regulation (1). (6) The Commissioner of Customs shall furnish to the Customs House Agent a copy of the report of the Deputy Commiss .....

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ithin ninety days from the date of submission of the report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5). (8) Any Customs House Agent aggrieved by any decision or order passed under regulation 20 or sub-regulation (7) of regulation 22, may prefer an appeal under Section 129A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under sub-section (1) of Section 129 of the Act". CBLR, 2013 Regulation 20 .....

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specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inqu .....

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g the correct position. (4) The Customs Broker shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Cus .....

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ty days, any representation that he may wish to make against the said report. (7) The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the licence of the Customs Broker or imposing penalty not exceeding the amount mentioned in regulation 22 within ninety days from the date of submission of the report by the Deputy .....

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s from the date of receipt of an offence report. 22(5) 20(5) Preparation of Report of Inquiry by the Deputy/ Assistant Commissioner. Within 90 Days from the date of issuance of the show cause notice. 22(7) 20(7) Passing of order by the Commissioner. Within 90 Days from the date of submission of the Inquiry Report. TOTAL DURATION 270 DAYS OR 9 MONTHS As per the facts of the present case investigation of the customs case was initiated on 5.12.2012. The date of sequence of the present case are give .....

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wherein the following direction were issued to I.O. The inquiry proceeding in a time bound matter and should be concluded within three months time from the date of appointment. The officers are directed to comply strictly with the time frame prescribed in the CBLR, 2013 (CHALR, 2004) and the circular No. 09.2010-Customs dated 08.04.2010. The officers are to submit monthly progress report to the undersigned without fail. The acknowledgment of receipt of this order should be sent within a week. S .....

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C.C. (G) requesting 12.09.2014 him to call for the file and pass appropriate 27.10.2014 order for reinstating the normal operation 11.11.2014 on the basis of various judgment and Board 23.12.2014 Circular 08.04.2010. 05.01.2015 15.01.2015 - Examination in chief and cross Examination 16.01.2015 have been taken place 18.02.2015 - The presenting officer filed his report. 24.02.2015 - The Appellant filed a detailed reply to the attending officer. 23.04.2015 Inquiry officer filed his report before t .....

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ued beyond the stipulated time of 90 days which is prescribed time limit under regulation 22(1) / 20(1) of CBLR, 2013. 8. The inquiry officer filed his report on 23.04.2015 i.e almost after 200 days from the date of Notice date 04.10.2013.It is observed that the inquiry officer not only defied the time line prescribed in the regulation but also disobeyed the direction given by the Commissioner to the inquiry officer. The Ld. Commissioner passed the order for revocation of the CB licence on 02.07 .....

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n of CHA/CB licence and held that the proceeding should be concluded within stipulated time period of 270 days. Some of the judgments and relevant operative portion thereof are given below:- 2016-TIOL-1069-HC-DEL-CUS IMPEXNET LOGISTIC Vs COMMISSIONER OF CUSTOMS (GENERAL) 7. It is plain that in the case there has been a violation of the time limits set out in Regulation 20 of the CBLR (corresponding to Regulation 22 of the CHALR). In the decision dated 12th May 2016 in Cus. AA 25/2015 [Indair Car .....

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the suspension and revocation of CHA licence. In para 7.1 of the said Circular, CUSAA 25/2015 & W.P.(C) 3973/2015 Page 4 of 5 it was noted as under: "7 .1 The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by the Board to prescribe an overall time limit of nine months from the date of receipt of offe .....

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/DC on the grounds not accepted by CHA, by reducing the time to thirty days in both the cases under the Regulations." 7. This Court has consistently emphasised the mandatory nature of the aforementioned time limits in several of its decisions. These include the decision in Shankar Clearing & Forwarding v. C. C. (Import & General) 2012 (283) E.L.T. 349 (Del.) = 2012-TIOL-657-HC-DEL-CUS , the order dated 25th April, 2016 passed by this Court in Customs Appeal No. 14/2016 (Commissioner .....

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d 24th April, 2016 in W.P.(C) No. 1734/2016 [HLPL Global Logistics Pvt. Ltd. v. The Commissioner of Customs (General)] this Court reiterated that the time limits in Regulation 20 of the CBLR/Regulation 22 of the CHALR are sacrosanct. 9. Admittedly, the SCN under the CHALR/CBLR in the present case was issued only on 9th December 2013, i.e., beyond the mandatory period of 90 days from the date of receipt of the offence report by the Respondent, i.e., 31st January, 2013. Consequently, all proceedin .....

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ribed under these Regulations during the relevant period are as follows: CHALR, 2004 CBLR, 2013 Purpose Specified Time Period 22(1) 20(1) Insurance of Show Cause Notice to the CHA/CB by the Commissioner. Within 90 Days from the date of receipt of an offence report. 22(5) 20(5) Preparation of Report of Inquiry by the Deputy/ Assistant Commissioner. Within 90 Days from the date of issuance of the show cause notice. 22(7) 20(7) Passing of order by the Commissioner. Within 90 Days from the date of s .....

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ence report. The show cause notice proposing revocation has been issued on 12.07.2013, well beyond the ninety days limit prescribed for the same in regulation 22(1). The inquiry report which is mandated to be completed within ninety days from the date of the show cause notice has been filed only on 27.11.2014, very much beyond the ninety days time limit prescribed for the same. Finally the impugned order has been passed within ninety days from the date of inquiry report. However, the overall tim .....

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n 20(2), for instance, entitles the Commissioner, to suspend the licence of an agent, in appropriate cases where immediate action is necessary. Regulation 22 (3) prescribes a time limit of 15 days. Regulation 22(1) prescribes a time limit within which action is to be initiated. It also prescribes the time limit under Regulation 22 (5). Therefore, considering the fact that the whole proceedings are to be commenced within a time limit and also concluded within a time frame, I am of the view that t .....

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cisions such as- (i) M/s Altharva Global Logistics vs. Commissioner of Customs, New Delhi - 2016-TIOL-157-CESTAT-DEL (ii) M/s Lohia Travels and Cargo vs. Commissioner of Customs (General), New Delhi - 2015-TIOL-2467-CESTAT-DEL. (iii) 2016-TIOL-524-CESTAT-DEL M/s Zen Cargo Movers Pvt. Ltd. vs. Commissioner of Customs, New Delhi - 2016-TIOL-524-CESTAT-DEL. 8. We find the Hon'ble High Court decision cited above is directly dealing with CBLR and sanctity time limit under the regulation. As such .....

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nly what is an 'offence report'. The Hon'ble High Court categorically held that the Commissioner is duty bound to initiate proceedings within ninety days from the date of receipt of offence report. The Hon'ble High Court held that it is not the case of Revenue that time limit prescribed in Regulation 22(1) is only directory and not mandatory. It was held that it is an accepted fact that the time limit prescribed therein has to be strictly adhered to. The Hon'ble High Court is .....

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expiry period. The Hon'ble High Court was dealing with entirely different set of legal provisions and facts and circumstances. We find the Hon'ble High Court decision in A. M. Ahamed & Co. (supra) is directly dealing with CBLR and the legal sanctity of time limit prescribed under the Regulations. As such, we find the order of the lower authority which was issued without adhering to the time schedule in every stage is liable to be set-aside on this ground. 7. Further, we find that the .....

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On the one hand, he finds that the inquiry report, which is a verbatim reproduction of show cause notice issued under Customs Act and as such he is not taking cognizance of the said report; on the other hand, he finds no infirmity in the report. It is not clear, if inquiry report was not given cognizance, then on what material records the original authority can proceed and decide the case resulting in the revocation of license of the appellant. 8 Considering the above discussion, we find that t .....

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ation of licence under CHALR, 2004/CBLR, 2013 must be strictly adhered to, else entire proceeding will be void on limitation itself. 9. As regard the debate that whether the time line prescribed under the regulation is directory or mandatory, we are of the view that in the circumstances that the specific time limit prescribed under the regulation and no power for condoning the delay was provided, the time line prescribe in mandatory. It is a strite law that in a particular act if specific time l .....

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this regard we are of the view that when the board circular which is not even law, is binding on the departmental officer, then why a statutory regulation cannot be binding on the officer. Therefore there is no hesitation in saying that the regulation made under the Act is strictly binding on the departmental officer particularly where no provision is made for condonation of any delay. The Hon ble Supreme Court/High Court time and again held that the time limit prescribed under the Act/Rule mus .....

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