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2017 (1) TMI 282 - CESTAT MUMBAI

2017 (1) TMI 282 - CESTAT MUMBAI - TMI - Revocation of CHA licence - time bar - time limits as prescribed under Customs Broker Licensing Regulations, 2013 for conduct of various activities by Revenue - amendment made in the Custom House Agent Licensing Regulations, 2004 (CHALR) vide N/N. 30/2010-Cus (NT) dated 8.4.2010 prescribing various time limits - Held that: - Revenue has taken 1221 days to complete the actions for which a period of 270 days is prescribed in CBLR, 2013. There has been a del .....

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leted. The Custom Brokers are deprived of the fundamental right to work for long periods of time. The fundamental right to work is being denied to the appellant due to failure of the Revenue to follow the time limits prescribed in the law - In the process on the one hand the Custom Broker who are unscrupulous get the advantage of these delays in their defence, the good ones who are not guilty suffer for long periods of time. In both the cases the justice is not delivered. - It was obvious th .....

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left of the hook and go scot free, which is not the intent of lawn Similarly, due to the delays, people who are not guilty will continue to suffer the suspension and revocation on account of delays by Revenue due to lack of responsibility. - The license which is revoked by the impugned order is restored forthwith and Commissioner of Customs (General), Mumbai is directed to do the needful immediately - appeal allowed on limitation - decided in favor of appellant. - C/86835/15 - A/94333/16/CB .....

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License Regulation (CBLR), 2013. On 15.7.2016 learned Counsel had argued that there has been inordinate delay in the processes in this case. She pointed that there are regulations prescribing time limits for conduct of various activities by Revenue for such actions and those time limits are prescribed under Customs Broker Licensing Regulations, 2013 (CBLR). She also highlighted the Circular No. 9/2010 dated 8.4.2010 issued by Revenue. In the said Circular, following para 7.1 & 7.2 read as: .....

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or Assistant Commissioner of Customs recording his findings on the issue of suspension of CHA license, and for passing of an order by the Commissioner of Customs. Suitable changes have been made in the present time limit of forty five days for reply by CHA to the notice of suspension, sixty days time for representation against the report of AC/DC on the grounds not accepted by CHA, by reducing the time to thirty days in Loth the cases under the Regulations, 7.2 In cases where immediate suspensio .....

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be corrected and an opportunity for personal hearing is given to the aggrieved party. Further, Board has also prescribed certain time limits in cases warranting immediate suspension under Regulation 20(2). Accordingly, the investigating authority shall furnish its report to the Commissioner of Customs who had issued tile CHA license (Licensing authority), within thirty days of the detection of an offence. The Licensing authority shall take necessary immediate suspension action within fifteen da .....

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.2010 prescribing various time limits. 1.1 It was seen that a number of cases have come before Tribunal where time limits have not been adhered to, it was seen that in the case of Lohia Travels and Cargo 2016 (331) ELT 614, the Tribunal had identified various regulations prescribing time limits. Para 3 of the order in case reads as under:- "3 In the present appeals, the appellant's main contention is that the procedure stipulated in the CHALR, 2004 and CBLR, 2013 have not been followed .....

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oner. 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 date of submission of the Inquiry Report. TOTAL DURATION 270 DAYS or 9 MONTHS In order to ascertain if such inordinate delays as in the instant case are exceptional or such delays are regular, Revenue was asked to submit data to ascertain if they are following time limits and if this case was an exception to the rule. Data was sought of such cases from th .....

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Services - 2016 (340) ELT 119 (Del) (ii) Hon ble High Court of Madras in the case of Saro International Freight System - CDJ-2015 MHC-7964. (iii) Hon ble High Court of Delhi in the case of INDAIR Carrier Pvt. Ltd. - 2016 (337) ELT 41 (Del) Learned Counsel argued that in view of the decision of Hon ble High Court of Delhi and Madras, the time Omits prescribed under the CBLR, 2013 have to be considered mandatory and therefore the proceedings against them need to be set aside as the said time limit .....

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11.2012. In the said decision, in a disciplinary matter it was held as under: - "The Court/Tribunal should not generally set aside the departmental enquiry, and quash the charges on the ground of delay in initiation of disciplinary proceedings, as such a power is de hors the limitation of judicial review. In the event that, the Court/Tribunal exercises such power, it exceeds its power of judicial review at the very threshold. Therefore, a charge-sheet or show cause notice, issued in the cou .....

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t in the interest of clean and honest administration, that the judicial proceedings are allowed to be terminated, only on the ground of delay in their conclusion. 3.2 Ld AR further relied on the decision of Hon ble High Court of Kolkata in the case of Bose Enterprises & Another vs. Union of India in Writ petition No. 143 of 2010vide Order dated 15.03.2012. Ld AR also relied on the decision of Hon ble High Court of Delhi in the case of Burleigh International - 2016 (333) ELT 9 (Del). Ld AR al .....

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of receipt of an offence report. 22(5) 20(5) Preparation of Report of Inquiry by Deputy/Assistant Commissioner. Within 90 days from the date of issuance of the Show Cause Inquiry 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. In the instant case, the following is the time limit of event in the case: Sr. No. Event Date of occurrence Prescribed date Regulation 22 Delay 1. Intimation t .....

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t is obvious that none of the time limit prescribed under the CBLR, 2013 has been followed. In fact there has been as inordinate delay of exceptional nature. The matter has been delayed by almost three years beyond time limit and almost 4 times the prescribed time limit. This is a case of exceptional delay. 4.1 Ld AR has relied on the decision of Hon ble Apex Court in the case of Chairman, LIC Vs. A. Masilamani (supra). In the said decision, Hon'ble Apex Court has interpreted the dismissal o .....

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ch non-compliance has resulted in failure of justice; (b) Whether the findings are justified; and (c) Whether the penalty imposed is excessive, adequate or inadequate, and pass orders …… xxxx xxxxxxxxxxxx" It is seen that Hon ble High Court had in that case considered delay as one of the contributing factor. It is seen that there is no time limit prescribed under regulation 46(2) (as reproduced in the said decision). In the instant case CBLR, 2013 specifically prescribed time .....

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ises (supra). In the said case, Hon ble High Court of Kolkata was interpreting the time limits prescribed by an instruction issued by CBE&C. Hon ble High Court observed as under: "The instructions issued by the Central Board of Excise and Customs are binding on the Department. The time stipulations in the Circular apparently directory and not mandatory, as will be evident from the language and tenor thereof. Furthermore, the Circular does not provide for the consequences of failure to a .....

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ecision of Hon ble High Court of Delhi in the case of Burleigh International (supra). In the said decision, the Hon ble High Court observed as follows: 3. This Court has considered the submissions. In the absence of any indication, within the Regulation, as to the consequence of not passing an order within the time stipulated, the Court is unpersuaded with the petitioner's arguments that the discretion to pass the order within fifteen days of hearing is, in fact, a mandatory requirement. At .....

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dated 13.5.2014, the Hon ble High Court of Delhi in other cases has taken a different view. The same have been discussed in para 4.5 below. 4.4 Ld AR has also relied on the decision of Hon ble Apex Court in the case of R.S. Saini (supra). In the said case, the Hon ble Apex Court held that time limit prescribed by a memorandum of Government of India cannot be held to be mandatory. The said case is distinguishable for the reason that in the instant case, the time limit is not prescribed by Adminis .....

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and held that the time limit prescribed under the CBLR, 2013 are mandatory in nature. In para 6 & 7 of the said decision, following has been observed: 6. The time-limits in the CHALR, 2004 for issuance of the SCN to the CHA licence holder and completion of the inquiry within 90 days of issuance of such SCN are sacrosanct. The aforesaid time-limits were engrafted into Regulation 22 of the CHALR, 2004 by a Notification No. 30/2010-Cus. (N.T.) dated 8th April, 2010. Simultaneously, the CBEC is .....

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from the date of receipt of offence report, by prescribing time limits at various stages of Issue of Show Cause Notice, submission of inquiry report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs recording his findings on the issue of suspension of CHA license, and for passing of an order by the Commissioner of Customs, Suitable changes have been made in the present time limit of forty five days for reply by CHA to the notice of suspension, sixty days time for represe .....

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of Customs (General) v, S.K. Logistics) and the order dated 29th April, 2016 in W.P. (C) No. 3071/2015 (M/s Sunil Dutt v. Commissioner of Customs (General) New Customs House). The same position has been reiterated by the Madras High Court in Sanco Trans Ltd v. Commissioner of Customs, Sea Port/Imports, Chennai - 2015 (322) E.L.T. 170 (Mad.) and Commissioner v. Eltece Associates - 2016 (334) E.L.T. A50 (Mad). 4.6 Hon ble High Court of Madras in the case of Saro International Freight System (supra .....

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ought to have, without any shadow of doubt, treated the word "shall" in Regulation 11 as mandatory" and not directory Therefore, when a time limit is prescribed in Regulations which empowers action in Regulation 18 and procedure in Regulation 20 (1), the use of the term shall cannot be termed as "directory . It is pertinent to mention here that the CBLR, 2013 have replaced the CHA Regulations. The CHA regulations did not have any time limit to complete the proceedings. There .....

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s itself, when they were brought into force. Therefore, when a time limit is prescribed in Regulations, which empowers action under Regulation 18 by following the procedure in Regulation 20 (1), the use of the term shall" cannot be termed as "directory . Under such circumstances, the rule can only be termed as Mandatory". 5. We find that in this case Revenue has taken 1221 days to complete the actions for which a period of 270 days is prescribed in CBLR, 2013. There has been a del .....

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h such time limit has been prescribed, is to curb the smuggling of goods and in the result to cancel the licences of the brokers if they are involved and to impose penalty, The interpretation of a statute must always be to give a logical meaning to the object of the legislation and the aim must be to implement the provisions rather than to defeat it As laid down by the Apex Court in the judgments relied upon by the learned counsel for the petitioners, when a statute prescribes a thing to be done .....

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he said time limits have not been followed. The arguments of the appellants in such cases usually start on the ground of limitation. There are various decisions which hold that the time limits prescribed under the regulations are not directory but mandatory. There are some decisions otherwise too. In similar circumstances, earlier in the case of Skylark Travel Pvt Ltd, wherein delay of 4 years had occurred (Order No. M/86739/16/CB dated 22.03.2016), the Bench had sought data to ascertain if dela .....

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ts and circumstances, the learned AR agreed to provide data of the case pending/under investigation in the Customs House and if there are any delays. However, the said data has not been submitted till date. There is an obvious resistance to providing the data. This creates a suspicion. It is obvious that some Customs Brokers suffer on account of such delays and some get benefit on account of such delays. Some custom broker, who have not committed any serious fraud and who ought not to be punishe .....

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ta is relevant. In exercise of powers under CESTAT Procedure Rules, 1982, we direct the Revenue to present the data regarding observation of various time limits prescribed under regulations. This data may be given in respect of cases taken up or pending in the Mumbai Customs since the amendment made by Notification No.30/2010-Cus dated 8.4.2010 till 30.6.2016. The respondents are directed to produce the said data on 23.8.2016 at the time of next hearing. By way of Miscellaneous Application Reven .....

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1 25.10.2011 20.2.2014 20.2.2014 11.7.2014 27.2.2015 3. Franc Cargo Clearing Services, 11/964 21.7.2010 3.8.2010 4.2.2015 4.2.2015 4.2.2015 Inquiry is still Pending 4. Vilas Transport Company, 11/470 9.3.2011 24.3.2011 5. Fairdeal Shipping Agency Pvt. Ltd., 11/091 09.09.2011 19.9.2011 20.11.2014 20.11.2014 22.3.2016 6. Kamal Clearing & Forwarding Pvt. Ltd., 11/691 18.8.2011 9.9.2011 15.12.2011 15.12.2011 15.12.2011 15.5.2013 7. Prashant Freight Forwarders, 11/477 30.6.2011 13.7.2011 9.11.201 .....

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vt. Ltd., 11/999 9.6.2011 22.6.2011 20.9.2011 20.9.2011 20.9.2011 26.12.2012 14. K.M. Commercial Servies Pvt. Ltd., 11/907 30.8.2012 13.9.2012 2.11.2012 2.11.2012 2.11.2012 18.10.2013 15. RR Joshi Shipping & Forwarding Pvt. Ltd., 11/486 8.11.2011 2.12.2011 25.1.2012 25.1.2012 25.1.2012 11.12.2012 It is seen that inquiries initiated in 2010/2011 are still pending in 2016. There is absolutely no respect for the CBEC circulars or the CBLR 2013. This data appears to be just the tip of the iceber .....

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data a lot more files than 15. 5.2 From the data it is seen that not even in one case, the time limit being followed. In fact the delays are significant in many cases and in many cases the inquiry has not been completed even more than 5 years have been elapsed. The Hon'ble Supreme Court in the case of Olga Tellis & Orsvs Bombay Municipal Corporation, 1986 AIR 180, has observed as follows: "The argument which bears on the provisions of Article 21 is elaborated by saying that the evic .....

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ty. To work means to eat and it a/so means to live." The right to live and the right to work are integrated and interdependent and, therefore, if a person is deprived of his job as a result of his eviction from a slum or a pavement, his very right to life is put in jeopardy. It is urged that the economic compulsions under which these persons are forced to live in slums or on pavements impart to their occupation the character of a fundamental right. In the instant case the appellant has been .....

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