TMI Blog2019 (9) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... mandatory or directory has come up time and again before Courts under different circumstances. One of the earliest cases to draw the attention of the Constitution Bench of the Supreme Court was DATTATRAYA MORESHWAR VERSUS STATE OF BOMBAY [ 1952 (3) TMI 32 - SUPREME COURT] . The Court in that case created a dichotomy between (i) the provisions of statutes creating public duties and (ii) those conferring private rights. The provisions of statutes creating public duties were held to be directory and those conferring private rights were considered mandatory - In RAZA BULAND SUGAR CO. LTD. VERSUS MUNICLPAL BOARD, RAMPUR [ 1964 (10) TMI 82 - SUPREME COURT] , another Constitution Bench of the Supreme Court, without referring to the dichotomy created in Dattatreya Moreshwar laid down certain independent tests. The petitioner contended that if the time prescribed by Regulation 20 (7) is not held to be mandatory, there can be no check on the power of the authority and they can pass orders at any time they like. In fact, he went to the extent of contending that the time limit prescribed in Regulation 20 (7) should be construed to mean the availability of the power only up to a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. P. Balaji Varma, learned counsel for the petitioner and Mr. B. Narasimha Sarma, learned Senior Standing Counsel appearing for the respondents. 3. The petitioner holds a licence as a Customs Broker, under Hyderabad Customs, with permission to transact operations by Mumbai Customs Zone. 4. An offence report was received by Customs Broker Section (CBS), Mumbai from the Directorate of Revenue Intelligence (DRI), Mumbai on 24-01-2017 alleging that the petitioner was carrying out clearances of undervalued assorted consumer goods that were imported from China by using fake Import Export Code (IEC) obtained in the name of M/s. Victor Enterprises. A copy of the offence report along with the relied upon documents and enclosures were forwarded by CBS, Mumbai to the Customs Commissionerate, Hyderabad, vide letter dated 18-8-2017. 5. Therefore, a show cause notice dated 11-10-2017 was issued to the petitioner calling upon them to show cause as to why the Customs Broker Licence given to them shall not be revoked in terms of Regulation 18(1) read with Regulation 20 of the Customs Brokers Licensing Regulation (CBLR), 2013, for contravention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question of driving him to the Tribunal would not arise. If the petitioner fails on all these three issues, we can always direct him to raise the contentions on merits before the Tribunal. 12. In exercise of the power conferred by sub-section (2) of Section 146 of the Customs Act, 1962, the Central Board was issuing regulations from time to time. A set of regulations issued in the year 2004 known as Customs House Agents Licensing Regulations, 2004 were superseded in the year 2013 by a set of regulations known as Customs Brokers Licensing Regulations, 2013 . 13. Regulation 18 of these Regulations empowers the Commissioner of Customs to revoke the licence of a Customs Broker on certain grounds, with which we are not concerned in the present case. Regulation 19 empowers the Commissioner even to order the suspension of the licence of a Customs Broker, when an enquiry against such agent is pending or contemplated. 14. Regulation 20 prescribes the procedure for revocation of licence and for imposition of penalty. It reads as follows: 20. Procedure for revoking licence or imposing penalty.- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs or Assistant Commissioner of Customs, as the case may be, and shall require the Customs Broker to submit, within the specified period not being less than thirty 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 Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5) : Provided that no order for revoking the license shall be passed unless an opportunity is given to the Customs Broker to be heard in person by the Commissioner of Customs. 15. The steps to be taken by the Commissioner of Customs and the time limit prescribed for him to take action, before revoking the licence and imposing a penalty upon the Customs Broker, can be easily understo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the show cause notice was admittedly issued on 11-10-2017. Therefore, it was obviously after more than 8 months of the offence report that the show cause notice under Regulation 20(1) was issued. 17. But the stand taken by the respondents is that the offence report was first received by the Mumbai Commissionerate and immediately they prohibited the petitioner from transacting business in Mumbai Customs area by an order dated 17-3-2017. The prohibition was continued by a further order dated 11-5-2017. According to the respondents, the Hyderabad Commissionerate, by their letter dated 22-6-2017 sought a copy of the offence report. Therefore, the copy of the offence report along with necessary enclosures was forwarded by CBS, Mumbai, vide letter dated 18-8- 2017 to the Hyderabad Commissionerate. 18. In the light of the stand taken by the respondents as aforesaid, we are of the view that the first objection taken by the petitioner cannot be sustained. An attempt was made by Mr. P. Balaji Varma, learned counsel for the petitioner, to contend that the actual date of receipt of the offence report was not established by the respondents and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 that the allegations are not backed by evidence and the statements recorded by DRI are coercive. In this regard it is to put forth that a statement made before the Customs officials under Section 108 of the Customs Act, 1962, is a material piece of evidence unlike a statement recorded under Section 161 of the Criminal Procedure Code, 1973. Therefore, the statements recorded under Section 108 of the Customs Act, 1962, can be used as evidence against the CB to the extent of establishing the omissions and commissions of the CB with regard to the contravention of the provisions of the CHALR, 2004 as held in the case of Jasjeet Singh Marwah v. UOI by the Hon ble High Court of Delhi reported in 2009 (239) ELT 417 (Del.). The statements can therefore be used as substantive evidence to hold the CB liable for violation of CBLR, 2013. Also, Shri Arjun Pilane and Shri Pramod Bhor have declared in their statements that they have given the statement voluntarily and not under any coercion. Therefore, it can be seen that the allegations are based on material evidence like the Bill of Entry filed, goods imported and the statements recorded by DRI under Section 108 of the Customs Act, 1962 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements of Arjun Pilane and Pramod Bhor, the Prohibition order and the submissions of the CB, read with CBLR 2013. 24. Therefore, it is clear that there was a gross violation of the principles of natural justice. Unfortunately for the Department, the principles of natural justice have also been in-built into Regulation 20(4). Therefore, the Enquiry Officer could not have violated the mandate of law. It would have been a different matter if the Enquiry Officer had chosen not to rely upon the statements of those two witnesses, but to proceed only on the basis of other available documents. But in more than one place, the Enquiry Officer affirmed his reliance upon the statements of witnesses, among other things. Therefore, the impugned order based upon such an enquiry report is contrary to the procedure prescribed by Regulation 20(4) and clearly in violation of the principles of natural justice. 25. The third and last contention of the petitioner is that the impugned order was not passed within ninety days from the date of submission of the enquiry report and that therefore the prescription contained in Regulation 20(7) was violated. 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was suspended pending enquiry. Therefore, the learned Senior Standing Counsel contended that the petitioner cannot make much ado about the non-adherence to the time limit prescribed in Regulation 20(7). 30. We have carefully considered the rival contentions. 31. Before proceeding further, it must be pointed out that at least two High Courts namely Madras and Delhi High Courts have construed the time stipulated in Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulations of 2013 to be mandatory and not directory. The decisions of the Delhi High Court taking such a view are in Commissioner of Customs (General) v. S.K. Logistics (2016 (337) ELT 39 (Delhi)), Indair Carrier Pvt. Ltd., v. Commissioner of Customs (General) (2016 (337) ELT 41 (Delhi)) and Overseas Air Cargo Services v. Commissioner of Customs (General) (2016 (340) ELT 119 (Delhi)) . The decisions of the Madras High Court supporting the contention of the petitioner are in Sanco Trans Ltd., v. Commissioner of Customs (2015 (322) ELT 170) . However, the Calcutta and Bombay High Courts took a contrary view, the Calcutta High Court in M/s. Ota Falloons Forwarder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he acts done. 35. In Raza Buland Sugar Co Ltd., v. Municipal Board, Rampur AIR 1965 SC 895 , another Constitution Bench of the Supreme Court, without referring to the dichotomy created in Dattatreya Moreshwar laid down certain independent tests. After holding that the question cannot be resolved merely on the basis of the use of the word shall and that the answer to the question would depend upon the facts of each case, the Constitution Bench laid down the following tests Raza Buland Sugar Co Ltd: 1) To see the object of the statute; 2) The purpose for which the provision was made and its nature; 3) The intention of the legislature in making the provision; 4) The serious general inconvenience or injustice to persons resulting from whether the provision is read one way or the other; and 5) The relation of the particular provision to other provisions dealing with the same subject. 36. The decision in Raza Buland Sugar Co Ltd., v. Municipal Board, Rampur was quoted with approval by another Constitution Bench in Selam Advocates Bar Association v. Union of India (2005 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, it was pointed out, may be mandatory as to some aspects and may be directory as to the rest. One of the important observations made in M/s. M.R.F. Ltd v. Manohar Parrikar , while quoting from the HALSBURY S Laws of England reads as follows: The court will be more willing to hold that a statutory requirement is merely directory if any breach of the requirement is necessarily followed by an opportunity to exercise some judicial or official discretion in a way which can adequately compensate for that breach. 39. Mr P. Balaji Varma, learned counsel for the petitioner contended that if the time prescribed by Regulation 20 (7) is not held to be mandatory, there can be no check on the power of the authority and they can pass orders at any time they like. In fact, he went to the extent of contending that the time limit prescribed in Regulation 20 (7) should be construed to mean the availability of the power only up to a period of time, beyond which the authority vested with the power cannot invoke his jurisdiction. 40. We are unable to agree with the second part of the contention. It is only in cases where authorities or qua ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
