TMI Blog2020 (3) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... ion order dated 15 October, 2019 passed by the Commissioner of Customs does not mention that an enquiry against the Customs Broker is pending or is contemplated. To provide a safeguard to a license holder whose license has been suspended on account of necessity of immediate action, sub-regulation (2) of regulation 16 provides that the Commissioner of Customs shall within 15 days from the date of suspension of license under sub-regulation (1) give an opportunity of hearing to the Customs Broker and may pass such order as he deems fit either revoking the suspension or continuing the suspension. In the present case, after providing opportunity of hearing to the appellant, the Commissioner of Customs considered it appropriate to continue the suspension. The proviso to sub-regulation (2) of regulation 16 provides that the Commissioner of Customs shall thereafter follow the procedure as contemplated in regulation 17. The issue as to whether issuance of a notice within the stipulated period was mandatory or directory was examined by the Delhi High Court in Indair Carrier Pvt. Ltd. vs. Commissioner of Customs (General) and Ors. [ 2016 (5) TMI 775 - DELHI HIGH COURT ] where it was held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpretation or proposition of law, that view has to be followed, but if the jurisdictional High Court has not expressed any view in regard to the subject matter and there are conflicting views of other High Courts, then the Tribunal will be free to formulate its own view. In view of the aforesaid decision of the Larger Bench of the Tribunal, the judgements rendered by the Delhi High Court would have to be followed. The Delhi High Court has, in very clear terms, held that the time limit prescribed under the Regulations for issuance of the notice within 90 days from the date of receipt of the offence report is mandatory in nature. Such being the position of law, the Brokers Licence would automatically stand revived if a notice contemplated under regulation 17(1) of the 2018 Regulations is not issued within 90 days from the date of receipt of the offence report - In the present case, the notice contemplated under regulation 17(1) was not issued within 90 days from 27 September, 2019. The suspension order dated 15 October, 2019, as continued subsequently by order dated 5 November, 2019, cannot survive. The Brokers Licence of the Appellant shall, therefore, stand revived. The revoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Bills of Entry was reported. Thereafter, on 06 August, 2019, a show cause notice was issued under section 124 of the Customs Act, 1962 Customs Act to an employee of the appellant and an order dated 16/18 September, 2019 was issued by the Principal Commissioner of Customs at Mumbai for withdrawal of the permission granted to the appellant to transact business at Mumbai Customs Zones with immediate effect. This order together with a copy of the show cause notice dated 6 August, 2019 was communicated to the Commissioner of Customs at Indore by letter dated 23 September, 2019 which was received by the Commissioner of Customs at Indore on 27 September, 2019. Thereafter, by order dated 15 October, 2019, the Commissioner of Customs at Indore, in exercise of the powers conferred by regulation 16(1), suspended the license of the appellant with immediate effect. The appellant was also granted an opportunity of being heard on 22 October, 2019 in terms of regulation 16(2). It was after hearing the appellant that the Commissioner at Indore by order dated 05 November, 2019 directed for continuation of the suspension of the License of the Appellant. This appeal has been filed to assail the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station; (d) adjudicated as an insolvent; (e) of unsound mind; and (f) convicted by a competent court for an offence involving moral turpitude or otherwise. 10. Regulation 16 deals with suspension of license and is as follows:- 16. Suspension of license. - (1) Notwithstanding anything contained in regulation 14, the Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated : Provided that where the Principal Commissioner or Commissioner of Customs may deem fit for reasons to be recorded in writing, he may suspend the license for a specified number of Customs Stations. (2) Where a license is suspended under sub-regulation (1), the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose license is suspended and may pass such order as he dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish to make against the said report. (7) The Principal Commissioner or 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 license of the Customs Broker 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 Principal Commissioner of Customs or Commissioner of Customs, as the case may be. (8) xxxxxxxxxxxxxxxxx Explanation. - Offence report for the purposes of this regulation means a summary of investigation and prima facie framing of charges into the allegation of acts of commission or omission of the Customs Broker or a F card holder or a G-card holder, as the case may be, under these regulations thereunder which would render him unfit to transact business under these regulations. 12. Regulation 19 provides that a Customs Broker w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant whereafter the suspension of the Brokers Licence of the appellant was continued by order dated 5 November, 2019. 16. The proviso to regulation 16(2) provides that in case the Commissioner of Customs passes an order for continuing the suspension, further procedure thereafter shall be as provided in regulation 17. 17. Regulation 17 (1) provides that the Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the license or impose penalty requiring the said Customs Broker to submit within thirty days a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person. 18. It is non compliance of this provision contained in regulation 17 (1) that is the bone of contention between the parties. According to learned Counsel for the appellant non-compliance of this provision would result in revival of the license. In this connection, it has been pointed out that though the period of 90 days should be counted from 07 February, 2019, but even if the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to transact any business in the Customs Station; (d) adjudicated as an insolvent; (e) of unsound mind; and (f) convicted by a competent court for an offence involving moral turpitude or otherwise. 23. Regulation 16 deals with suspension of license. It provides that notwithstanding anything contained in regulation 14, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated. Thus, regulation 16(1) confers power on the Commissioner of Customs to suspend the license if immediate action is necessary, but this action can be taken either when an enquiry against the Customs Broker is pending or is contemplated. 24. The suspension order dated 15 October, 2019 passed by the Commissioner of Customs does not mention that an enquiry against the Customs Broker is pending or is contemplated. To provide a safeguard to a license holder whose license has been suspended on account of necessity of immediate action, sub-regulation (2) of regulation 16 provides that the Commissioner of Customs shall within 15 days from the date of suspension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 28. The issue as to whether issuance of a notice within the stipulated period was mandatory or directory was examined by the Delhi High Court in Indair Carrier Pvt. Ltd. vs. Commissioner of Customs (General) and Ors. 2016 (337) ELT 41(Del) The provisions of the Customs House Agents Licensing Regulations, 2004 2004 Regulations had come up for interpretation. Regulation 22(1) is reproduced below:- 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 Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs House Agent desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs : Provided that the procedure prescribed in regulation 22 shall not apply in respect of the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds 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 Schankar Clearing Forwarding v. C.C. (Import General) - 2012 (283) E.L.T. 349 (Del.), the order dated 25th April, 2016 passed by this Court in Customs Appeal No. 14/2016 (Commissioner 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.). 8. Consequently, the Court is unable to sustain the directions issued by the CESTAT in the impugned order dated 11th March, 2015, permitting the Respondents to proceed with and complete the inquiry within a further period of 60 days from the date of the impugned order of the CESTAT despite noting that the mandatory time-limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 22(1) of the 2004 Regulations are mandatory in nature and the relevant paragraphs are as follows:- 13. This Court has in a series of judgments dealt with the question of mandatory nature of time limits set out in CHALR, 2004 and the corresponding provisions under the CBLR, 2013. This Court has in the following judgments reiterated the mandatory nature of the time limits set out in the CHALR, 2004 and corresponding provisions in the CBLR, 2013: (i) Order dated 29th April, 2016 in WP(C) 3071/2015 [Mr. Sunil Dutt, through Proprietor v. Commissioner of Customs (General), New Customs House] [2016 (337) E.L.T. 162 (Del.)]; (ii) Order dated 12th May, 2016 in CUSAA 25/2015 [Indair Carrier Pvt. Ltd. v. Commissioner of Customs (General)] [2016 (337) E.L.T. 41 (Del.)]; (iii) Order dated 24th May, 2016 in WP(C) No. 1734 of 2016 [HLPL Global Logistics Pvt. Ltd. v. The Commissioner of Customs (General)] [2016 (338) E.L.T. 365 (Del.)]; (iv) Order dated 1st June, 2016 in WP(C) No. 5300 of 2016 [Impexnet Logistic v. Commissioner of Customs (General)] [2016 (338) E.L.T. 347 (Del.)]. 15. The SCN dated 14th October, 2011 that was issued to the appellant is the same SCN that wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier decision of the Madras High Court in The Commissioner of Customs, Chennai vs. CESTAT and Others) 2014 (310) ELT 673, the Madras High Court in Saro International held that the time limit prescribed under regulation 20(1) of the 2013 Regulations is mandatory. The observations of the High Court are as follows:- 24. The Customs Broker Licensing Regulations, 2013 were promulgated in exercise of powers conferred under sub-section (2) of Section 146 of the Customs Act, 1962. It is only under the regulations, the licence is granted and the regulations also contain various provisions to regulate the affairs of the customs broker including the revocation of the licence. The regulations contemplate action against the customs broker de hors the provisions under the Customs Act. Therefore, the regulations cannot be treated as subordinate legislation. Moreover, every implementing authority of any fiscal statute is only performing a public duty. Therefore, it cannot be said that the provision is to be termed as directory just because its adherence is in the nature of performance of a public duty. What is to be considered is the object of the enactment in prescribing a period for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -4-2010, amendments prescribing time period for initiating action and completing proceedings was made. The same was given effect by notification dated 20-1-2014. Whereas, under the CBLR, 2013 having found the necessity to prescribe a period, the Central Board, the statutory authority had included the same in the Regulations 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 . 31. Therefore, this Court is of the view that the impugned show cause notice issued by the respondent is without jurisdiction, as it has been issued beyond the period prescribed in the regulations, which have statutory force and hence, not sustainable. (emphasis supplied) 36. Thus, the Delhi High Court and the Madras High Court, while dealing with the provisions of regulation 22(1) of the 2004 Regulations and regulation 20(1) of the 2013 Regulations, which are similar to regulation 17(1) of the 2018 Regulations, have held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he only way by which the provisions contained in Regulation 20 can be effectively implemented in the interest of both parties, namely, the Revenue and the Customs House Agent. (emphasis supplied) 39. This decision of the Bombay High Court was subsequently followed by the Bombay High Court in Commissioner of Customs (General) vs. Razvi Shipping Agency 2019 (368) ELT 850 (Bom). 40. The Calcutta High Court in OTA Fallons Forwarders Pvt Ltd. vs. Union of India 2018 (362) ELT 947 (Cal), after referring to the aforesaid judgments of the Delhi High Court, the Madras High Court and the Bombay High Court followed the view expressed by the Bombay High Court and held that the time limit prescribed in regulation 22(1) of the 2004 Regulations or regulation 20(1) of the 2013 Regulations is not mandatory in nature. Paragraph 16 of the judgment is reproduced below:- 16. Regulations of 2004 as well as the Regulations of 2013 are products of exercise of powers under Section 146 of the Customs Act, 1962. Both the Regulations regulate the affairs of a Customs House Agent, subsequently known as the Customs Agent in the Regulations of 2013. Regulation 22 of the Regulations of 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal in Collector of Central Excise, Chandigarh vs. Kashmir Conductors 1997 (96) ELT 257 (Tri). One issue that was addressed by the Larger Bench was what should be done when the Tribunal is faced with conflicting decisions of High Courts. The five member Larger Bench of the Tribunal held that if the jurisdictional High Court has taken a particular view on an interpretation or proposition of law, that view has to be followed, but if the jurisdictional High Court has not expressed any view in regard to the subject matter and there are conflicting views of other High Courts, then the Tribunal will be free to formulate its own view. The relevant paragraphs of the decision of the Larger Bench are reproduced below:- 10. The question as to how the Tribunal should proceed in the face of conflicting decisions of High Courts has been considered in M/s. Atma Steels P. Ltd. and others v. Collector of Central Excise, Chandigarh reported in l984 (17) E.L.T. 331 wherein the Larger Bench consisting of five Members held that, in view of its All India jurisdiction and peculiar features, the Tribunal cannot be held bound to the view of any one of the High Courts, but has the judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. The Tribunal has held that since the adjudication of vires of a provision of a statute or Notification is outside the jurisdiction of the Tribunal and the jurisdictional High Court i.e., the High Court having jurisdiction over the authority and the assessee, has not struck down the provision or Notification as ultra vires, the Tribunal has to follow the same and the assessee is entitled to take the stand that he is entitled to the benefit of the particular provision or Notification since the jurisdictional High Court has not struck it down, even though some other High Court may have done so. In case the conflict of decisions among High Courts does not relate to vires of any provision or Notification, it has been held that the Tribunal has to proceed in accordance with the decision in Atma Steels P. Ltd. in the light of the decision of Supreme Court in the East India Commercial Company case i.e. where the jurisdictional High Court has taken a particular view on interpretation or proposition of law, that view has to be followed in cases within such jurisdiction. If the jurisdictional High Court has not expressed any view in regard to the subject matter and there is conflict of vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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