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TMI Blog2019 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... in W.P.No.22154 of 2019 for Mrs.R.Hemalatha Senior Standing Counsel, Mr.Rajasekar in W.P.No.31383 of 2018 for Mr.A.P.Srinivas Standing Counsel, Mr.T.L.Thirumalaisamy in W.P.1855 of 2019 Standing Counsel COMMON ORDER All these petitioners are Customs House Agents/Customs Brokers. They are issued with licence under the provision of Custom House Agents License Regulations, as existed at the relevant period. Since a common issue is raised in these writ petitions, while challenging the respective impugned proceedings, all these writ petitions are heard together and disposed of by a common order, as hereunder. 2. The relevant facts touching upon the the issue raised in each of the writ petition, are as follows: a) W.P.No.3366/2019- Challenge made is against the Order in Original dated 13.08.2015, revoking the license of the petitioner issued under the Customs Brokers Licensing Regulations, 2013. The points raised in this writ petition are that, i) Enquiry Officer issued the report beyond 90 days from the date of issuance of the show cause notice and ii) The Commissioner has not passed orders within 90 days from the date of the enquiry report and therefore, the impugned order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice dated 20.12.2018. Points raised against the impugned show cause notice are that, i) Enquiry report was not filed within 90 days from the date of show cause notice. Thus, Regulation 17(5) is violated. Show cause notice was issued on 20.12.2018 whereas enquiry report was filed on 30.07.2019. ii) The Commissioner should have passed final order under Regulation 17(7) within 90 days from the receipt of the Enquiry Report. Till this date, no such order is passed, in the absence of any legal impediment against the Commissioner to pass such order. Therefore, entire proceedings are vitiated on the ground of limitation. h) W.P.No.31383 of 2018 is filed against the impugned order of suspension dated 20.11.2018. However, subsequently, a show cause notice for revocation is issued and the same is put to challenge in W.P.No.22154 of 2019. Therefore, the issue raised in this writ petition got merged with W.P.No.22154 of 2019. i) W.P.No.27948 of 2019: Challenge made in this writ petition is against the show cause notice dated 23.02.2018. The points raised against the impugned show cause notice are that, i) the Enquiry Report was submitted beyond 90 days from the date of show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crux of the contentions of the petitioners is as follows: a) i) The period of limitation prescribed in the relevant Regulation for doing each act is mandatory and not directory. ii) Even though the Regulations do not provide the consequence event, if the limitation period is not adhered to, the nature of business being done and the action initiated against the petitioners would show that such consequences are obvious and very serious in nature affecting the business and livelihood of the petitioners in toto. iii) When substantial right is affected, the Authorities are bound to comply with the time limit. iv) The order of suspension cannot be perpetuated by not passing the follow up actions within the time prescribed. Therefore, if the time prescribed is not mandatorily followed, the order of suspension would become perpetual. v) Since irretrievable loss is being caused by not passing the proceedings within the time frame, interest of the petitioners are very much affected. Therefore, the limitation period is mandatory. b) The Division Bench order passed by this Court in W.P.(MD) No.11986 of 2018, etc., dated 19.07.2018, holding time prescribed under the provision under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin 90 days from the date of the show cause notice. Because of the petitioner's non-cooperation, the time schedule could not be adhered to. Regulations are only procedural laws and therefore, prescription of time limit therein is only directory. In W.P.No.31383/2018, the time limit is fully complied with. The suspension order was issued within one month from the date of receipt of the offence report. The continuation of the suspension order was issued on 20.11.2018. Therefore, the prayer sought for in W.P.No.31383/2018 challenging the suspension has become infructuous in view of the issuance of the show cause notice on 20.12.2018 which is challenged in the subsequent W.P.No.22154/2018. In W.P.No.18041/2018, the offence report was received by the respondent on 13.11.2018 and not on 16.11.2018 as contended by the petitioner. The challenge made in this writ petition against the show cause notice is premature and therefore, the writ petitions are not maintainable. 8. In support of the above contentions, the learned counsel relied on the following decisions: (i)2018(362) ELT 947 (CAL), OTA FALLONS FORWARDERS P LTD VS. UOI; (ii) Manu/WB/0814/2016, ASIAN FREIGHT VS. PRINCIPAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sake of convenience, I refer 2013 regulations. The regulation 19 deals with the suspension of the customs broker license. It reads as follows: "19.Suspension of licence: (1) Notwithstanding anything contained in regulation 18, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending contemplated. (2) Where a licence is suspended under sub-regulation (1), the Commissioner of Customs shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose licence is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within fifteen days from the date of hearing granted to the Customs Broker: Provided that in case the Commissioner of Customs passes an order for continuing the suspension, the further procedure thereafter shall be as provided in regulation 20." 12. Regulation 17(1) of 2018 Regulations is similar to Regulation 20(1) of 2013 Regulations. Likewise, Regulation 17(5) and Regulation 17(7) of 2018 Regulations are similar to Regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh to the Customs Broker a copy of the report of the Deputy Commissioner 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." 13. Perusal of the above Regulations would show that the Authority, who suspends the license/revokes the license/imposes penalty, should act/issue certain proceedings within the time stipulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing license shall be passed, unless an opportunity of hearing is given to the customs broker in person by the Commissioner of Customs. 15. Perusal of the above Regulations thus would show that at every stage, a time limit is fixed for the authorities concerned to act. The question as to whether the time limit prescribed in the regulations is mandatory or not, has been considered by this Court in W.P.Nos.26923 and 26934 of 2018 (Carewell Shipping Pvt. Ltd vs Commissioner of Customs) dated 22.11.2018. This Court, after considering the scope of the relevant regulation and the time frame fixed therein and also after following the Division Bench decision of the Delhi High Court in a case reported in 2016 (338) ELT 347, (Del), Impexnet Logistic vs Commissioner of Customs (General) and the Division Bench decision of this Court made in CMA No.730 of 2016 dated 13.10.2017, found that the time limit fixed is mandatory and that the Enquiry Report filed beyond the period of 90 days cannot be considered as a valid report and consequently, further proceedings cannot be allowed to go as a follow up action. The relevant findings rendered at paragraphs 7 to 12 of the said order of this Court read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2015 was passed after affording the petitioner an opportunity of being heard. 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 Carrier Pvt. Ltd. v. Commissioner of Customs (General) [2016 (337) E.L.T. 41(Del)] this Court held: "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 issued Circular No. 9/2010 dated 8th April 2010 clarifying the procedures governing the suspension and revocation of CHA licence. In para 7.1 of the said Circular, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 13.10.2017 by the Division Bench of this Court. In the said decision, the Division Bench, after following the Delhi High Court decision reported in 2016 (337) ELT 41 (Del), Indair Carrier Pvt. Ltd vs Commissioner of Customs (General), has observed at paragraph No.42 as follows: "42. Once the limitation prescribed is mandatory, as has been declared by the courts of law, it cannot be stated that, because of the other issues, that is the merit of the case, this mandatory requirement of the limitation can be ignored." 10. Perusal of the above said decisions of this Court and the Delhi High Court would show that the time stipulated under the Regulations for issuing the show cause notice as well as the filing report is not directory and on the other hand, it is mandatory. No other contra decisions are placed before this Court by the learned counsel for the respondents. Even the decision, which he sought to rely made in W.P.Nos.19312 and 19313 of 2016 dated 13.07.2016, is not relevant to the present facts and circumstances, since in that case this Court has considered the question as to whether the respondent therein had sufficient power to sustain the license invoking Regulation 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich prevents further proceedings, the Revenue has to blame itself for such lapse, especially when the Courts have held that the period of limitation prescribed under the Regulation, as discussed supra, is mandatory. Therefore, it is for the authorities to be more vigilant in complying with the mandatory requirements under law, while proceeding against an offender without giving room for any lapse even on technicalities." 16. It is stated before this Court that the above order has not been challenged by the Revenue and on the other hand, the same has been given effect to. 17. It is further seen that before introducing the Regulations, Circular No.9/2010 dated 08.04.2010 was issued by the Central Board of Excise and Customs, New Delhi, wherein at paragraph No.7.1, it is stipulated that an overall time limit of 9 months is given from the date of receipt of offence report by prescribing time limits at various stages of issue of show cause notice, submission of enquiry report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs and for passing an order by the Commissioner of Customs. The said Circular NO.9/2010 was considered by the Division Bench of this Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 20(5). 22. The decision of the Apex Court made in Salem Bar Association case reported in 2005 (6) SCC 344, is also sought to be relied by the Revenue to contend that the time limit prescribed in these regulations are directory. In the above said case, the question before the Apex Court is with regard to the filing of the written statement under Order 8 Rule 1 CPC. Therefore, it is evident that facts, circumstances and the relevant provision of law are not one and the same before this Court as well as the case in Salem Bar Association. In any event, as the very same regulations were considered by this Court and decided in very many cases as discussed supra, the Revenue is not justified in relying on Salem Bar Association case. 23. Mr.V.Sundareswaran, learned counsel for the Revenue relied on the learned Single Judge decision of the Calcutta High Court Manu/WB/0814/2016, Asian Freight vs. Principal Commissioner, to contend that the time limit is only directory. He also relied on the Division Bench decision of the Bombay High Court reported in 2018 (361) ELT 321, Principal Commissioner vs Unison Clearing P Ltd., in support of his submission that the time limit is only directory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dship detrimental to the interest of the licensee is to be treated and viewed as consequence. Likewise, the revocation of the license or imposing penalty should also be done within the time prescribed so that the customs house agent will be in a position to know where does he stand. 28. Needless to state that the show cause notices are issued after suspending the license and therefore, the time limit prescribed at each stage needs to be complied with mandatorily, if not the consequence that would follow is the continuation of the suspension of his license thereby affecting/paralyzing the business activities of the licensee. These consequences, though not mentioned in the Regulations, are however evident apparently on the face of the facts and circumstances. Therefore, it cannot be said that there is no consequence for non adherence to the time limit and therefore, such time limit is only directory and not mandatory. 29. In the abovesaid decision of the Division Bench in W.P.(MD) No.11986 of 2018, etc., the point came up for consideration is with regard to the time prescribed under Section 14 of the SARFAESI Act for the District Collector to pass orders and to decide as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and thus, the compliance of the same is mandatory and not directory. 32.It is also contended by the learned counsels for the respondents that these regulations are made by exercising the power conferred under Section 146 of the Customs Act and therefore, when the said provision under the Customs Act does not prescribe any time limit, non compliance of the time limit prescribed under the present regulations cannot be fatal, since these regulations cannot go beyond the parent Act. I am not in agreement with the above submissions. First of all, it is to be noted that Section 146 of the Customs Act deals with the power to issue license. For issuing a license, obviously, there is no necessity for fixing any time limit. However, after issuing a license, if any action is sought to be taken based on an allegation of violation of terms of such license, certainly such action as contemplated under the relevant regulations is to be commenced and concluded within the time limit fixed therein at each stage. Therefore the regulations were rightly framed by fixing the time limit, since not following the time limit would result in serious consequences against the licencees as discussed supra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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