TMI Blog2023 (5) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... the other. The primary charge is that the appellant has been in breach of regulation 10 of Customs Broker Licensing Regulations, 2013 requiring the licence to be operated only by the licencee or his authorized person/employee which the inquiry authority, on the basis of certain facts and circumstances as well as statements of two persons said to be employees of M/s Millenium Freight Forwarders, concluded as having been sublet or otherwise transferred. The findings on the other charges, relating to obligations devolving upon customs brokers, held against the appellant herein is inevitable consequence of the finding on the primary charge. Accordingly, it would be appropriate to examine the sustaining of the primary charge and only proceed to look at the submissions in relation to other charges upon such being so. The impugned order has arraigned the appellant on the other charge of not knowing the customer upon the foundation that the licence had been sub-let to the two persons. It is alleged that the customs broker had granted access of the credentials, necessary for undertaking customs clearance, to persons not in their employment. The submission of customs broker, and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside - appeal allowed. - CUSTOMS APPEAL NO: 86564 OF 2016 - A / 85525 /2023 - Dated:- 11-4-2023 - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Shri Prashant Patankar, Consultant for the appellant Shri Ashwini Kumar, Additional Commissioner (AR) for the respondent ORDER In this appeal, M/s Mahendra Shipping Agency, a customs broker, challenges revocation of licence no. 11/369 and forfeiture of security deposit under regulation 20 and regulation 18 of Customs Brokers Licensing Regulations, 2013 in order [order-in-original no. 77/CAC/PCC(G)/BB/CBS/ (Admn) dated 17th February 2016] of Principal Commissioner of Customs (General), New Custom House, Mumbai. 2. It is seen from the records that proceedings were initiated against the appellant by notice dated 15th April 2014 enclosing the grounds of imputation and articles of charge, for breach of regulation 10, 11(a), 11(b), 11(d), 11(e), 11(m) and 11(n) of Customs Broker Licensing Regulations, 2013, in connection with the handling of 66 packages of readymade garments for export to Sudan and Nigeria against 12 shipping bills of M/s Orient Exports that were taken up for investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Authorised Representative submits that the proceedings were completed within the time allowed by the Hon ble High Court of Bombay and the impugned order issued on 17th February 2016 upon completion of enquiry on 5th January 2016. It is also pointed out that the impugned order had specifically addressed that very ground raised in the impugned proceedings. 7. It would appear that the licensing authority has assumed that the order of the Hon ble High Court of Bombay had, in fact, shifted the commencement of time-lines and, thereby, precluded challenge to non-adherence thereof. This, in our view, is far from a correct appreciation of the decision of the Hon ble High Court. 8. Before the Hon ble High Court was challenge of order of Tribunal dated 9th December 2014 revoking suspension of licence and disposed off on fact that was not existent when the appeal had been filed viz., commencement of enquiry contemplated under Customs Brokers Licensing Regulations, 2013 the lack of which had prompted the decision of the Tribunal. The temporary overruling of that decision by the Hon ble High Court of Bombay was, specifically, conditional upon completion of enquiry within three months w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue or the Customs House Agent would result into consequences of declaring the entire action invalid if the provision is construed as mandatory. On the other hand, if the provision the construed as directory, the Customs House Agent would be deprived of his licence for considerable long time, if the time schedule is not adhered to the Revenue at its sweet choice would prolong the procedure and which is a likely situation, no attempts would be made to complete the inquiry within the stipulated period. This is what has weighed in the mind of the High Courts while dealing with the said regulation and holding the same to be mandatory The catena of judgments on which reliance has been placed to declare the provision as mandatory have referred to the extraordinary delay caused at the instance of the revenue in conducting inquiry against the Customs House Agent, depriving them of their means of livelihood and it was observed that the purpose of prescribed time limit was to safeguard the interest of the Customs Broker and smooth import and export of goods. By relying on a celebrated principle, when a statute prescribes a thing to be done in a particular manner, it must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Apex Court, and specifically in Delhi Air Take Services Pvt. Ltd. and Another v. State of West Bengal and Another, CESTAT has concluded that while deciding whether the time period is directory or mandatory, it would be seen that the purpose of law prescribing it as mandatory and consequently the absence of provisions of consequences in case of non-compliance with the requirement would indicate that the provisions are directory irrespective of use of the word shall . The CESTAT has concluded that if the time limits are construed as mandatory and the matter is put to an end, the purpose of Regulation would be defeated and so would be the intention behind framing such a Regulation. On the other hand, if there is no consequence stated in the regulation for non-adherence is a time period for conducting the inquiry, the time line cannot be proved to be fatal to the outcome of the inquiry. Based on these observations the Tribunal had held the Regulation is directory in nature. However, in the present judgment which is impugned before us, the CESTAT has taken a view contrary to its earlier view in Unison Clearing Pvt. Ltd. (supra) and after referring to certain precedents where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ium Freight Forwarders, concluded as having been sublet or otherwise transferred. The findings on the other charges, relating to obligations devolving upon customs brokers, held against the appellant herein is inevitable consequence of the finding on the primary charge. Accordingly, it would be appropriate for us to examine the sustaining of the primary charge and only proceed to look at the submissions in relation to other charges upon such being so. 10. According to the inquiry report, M/s Orient Exports had been a client of M/s Millenium Freight Forwarders which the two individuals, associated with the export process and whose statements had been relied upon in the enquiry, had undertaken as employees of, and remunerated with salaries from, M/s Millenium Freight Forwarders despite which access was provided by the appellant to credentials required for handling of shipping bills and obtaining of customs clearance. According to Learned Consultant, the appellant was not aware that the two persons were employees of M/s Millenium Freight Forwarders which, he contends in any case, is no bar to employment by appellant and, therefore, cannot be said to have excluded them from being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such surmise that records of salary or letter of appointment are material to employment without scrutiny of practice prevailing in the business segment of the appellant is not a proper basis for enquiry proceedings to build its report upon. We cannot but take notice that the Regulations are also deficient in prescribing that the employees of customs broker licencee eschews part-time employment elsewhere and, in the absence of such directions/ conditions, it would be improper for the licensing authority to insinuate so for invoking detriment. The deficiencies, or deliberate omissions, in the Regulations is not a weapon of resort in the absence of evidence clearly bringing out alienation of the licence. Therefore, there is not sufficient evidence to establish the charge that the appellant has been in breach of regulation 10 of Customs Broker Licensing Regulations, 2013. 13. The impugned order has arraigned the appellant on the other charge of not knowing the customer upon the foundation that the licence had been sub-let to the two persons. It is alleged that the customs broker had granted access of the credentials, necessary for undertaking customs clearance, to persons not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any Customs Station. Regulation 13(n) ibid casts a duty on the CHA to discharge his duties as Customs House Agent with utmost speed and efficiency and without avoidable delay. Regulation 19(8) cast the liability on the Customs House Agent to exercise such supervision as may be necessary to ensure the proper conduct of any such employees in the transaction of business as agents and be held responsible for all acts or omissions of his employees in regard to their employment. It was strongly argued by the ld. Counsel that the Inquiry Officer had dropped all the charges, whereas the Commissioner established all charges to be true without any basis. In our view it is settled position that being the deciding authority under the Regulation, the Commissioner can differ with the Inquiry Officer. However we have to examine whether in the facts of the present case the ld. Commissioner is justified in differing with the findings recorded by the Inquiry Officer. We have carefully considered the rival submissions and also perused the records. There is no delay or inefficiency on the part of the Appellants. Soon after the cargo and papers were received, the formalities of registration were com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evidence on record that the appellant came to know about any irregularity before the same was detected by the department or that he misguided the concerned client. All that the CHA is required to do, is to discharge its function in accordance with CHALR, which in our considered view the Appellant did in the present case. Therefore there is no violation of Regulation 13(n) or Regulation 19(8) ibid. 11. In a matter on similar facts titled as Krishna Shipping Agency Vs. C.C. (Airport Admin.), Kolkata reported in 2017 (348) E.L.T. 502 (Tri.-Kolkata), in which after differing with the inquiry report the which after differing with the inquiry report the 10 C/516/2012 Adjudicating Authority held CHA guilty and revoked its license, a coordinate Bench of the Tribunal at Kolkata allowed the Appeal filed by CHA and held as under:- As per the above regulation appellant is required to verity the antecedents of his clients and suitably advise them. It is observed that at no stage appellant had the knowledge that there is any irregularity in the export/import consignments. The goods imported were put to first check examination and the importer very well exists. Similarly the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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