TMI Blog2024 (2) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... ura Shipping Agency a Customs Broker against revocation of CB license forfeiture of the security deposit and imposition of penalty under Regulation 18 of CBLR 2018. 2. The Learned Counsel for the appellant pointed out that the time limits prescribed in the Customs Brokers Licensing Regulation, 2018 have not been followed. She pointed out that Regulation 17 (1) requires the Show cause noticed to be issued within 90 days from the receipt of office offence report. However, in the instant case the show cause notice has been delayed by 14 days over and above the 19 days limit prescribed in Regulation 17 (1). The regulation 17 (5) requires enquiry report to be prepared within the 90 days from the date of show cause notice. 2.1 It has been argue that there is the delay of 66 days over and above the 90 days time limit prescribed under Regulation 17 (5). It was further pointed out that Regulation 17 (7) requires the final order to be passed within 90 days from the date of enquiry report. 2.2 It was argued that there was a delay of 31 days over and above the 90 days limit prescribed Regulation 17 (7) of the CBLR, 2018. The learned Counsel argued that the time limits prescribed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered rival submissions. 4.1 We find that for all the primary ground traced by the appellant relate to failure of department to follow the time limits prescribed under CBLR, 2018. The following are the various time limits, which the revenue has failed to followed;- Relevant Regulation of Customs Brokers Licensing Regulations, 2018 Statutory Time Limit prescribed under respective Regulation Actual date of receipt of office report, issuance of Show-cause Notice and issuance of impugned order. Delay, beyond the statutory time limit mentioned in col. (2) (1) (2) (3) (4) 17 (1) Show-cause Notice to be issued within 90 days from the receipt of report office Office Report dtd. 21/07/2022 Show-cause Notice dtd. 04/11/2022 Was required to be issued on or before 21/10/2022 Delay after 90 days' time limit is - 14 days 17(5) Inquiry Report to prepared within 90 days from the date Show-cause Notice Show-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 19-7-2018, holding time prescribed under the provision under Section 14 of the SARFAESI Act, cannot be applied to the present case by the Revenue, since the facts and circumstances are different therein and the parties therein are not affected by any consequences. Moreover, the said order was issued taking note of the public interest. (c) Board Circular No. 9/2010, which was issued before framing the Regulation clearly stipulated at Paragraph 7.1 overall time limit of 9 months to be followed in completing the proceedings. 6. In support of the above contentions, the Learned Counsel for the petitioners relied on the following decisions : (i) Order made in W.P. No. 26923 and 26934 of 2018, dated 22-11-2018; (ii) 2016 (338) E.L.T. 347 (Del. - DB), Impexnet Logistic v. Commissioner of Customs (General) (iii) 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2018, 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) E.L.T. 947 (Cal.), OTA Fallons Forwarders P. Ltd. v. UOI; (ii) Manu/WB/0814/2016, Asian Freight v. Principal Commissioner; (iii) 2018 (361) E.L.T. 321 (Bom. DB), Principal Commissioner v. Unison Clearing P Ltd.; (iv) the Division Bench decision of this Court made in W.P. (MD) No. 11986 of 2019, etc., in the case of C. Bright v. District Collector, Nagercoil, dated 19-7-2019. 9. Heard the Learned Counsels for the petitioners and the Learned Counsels for the respondents. Perused the materials placed before this Court. 10. These writ petitions are filed by the holders of Customs Broker license issued under the relevant Customs Broker Licensing Regulations. In these writ petitions, they have challenged the respective order of suspension/the show cause notice issued with a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Regulation 20(5) and 20(7) of 2013 Regulations. Thus, for better clarity, Regulation 20 of 2013 regulations in full is extracted hereunder : 20. Procedure for revoking licence or imposing penalty. (1) 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 licence or impose penalty requiring the said Customs Broker 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 stipulated therein. Under 19(1) of 2013 Regulations, the Commissioner of Customs is empowered to suspend the license in an appropriate case, where immediate action is necessary and where an enquiry against such agent is pending or contemplated. It is further seen that if a license is suspended under sub-regulation (1) of Regulation 19, the Commissioner shall give an opportunity of hearing to the customs broker within 15 days from the date of suspension of license and pass such order, as he deems it fit, either revoking the suspension or continuing it within 15 days from the date of hearing granted to such customs broker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein and also after following the Division Bench decision of the Delhi High Court in a case reported in 2016 (338) E.L.T. 347, (Del), Impexnet Logistic v. 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 as follows : 7. The challenge made in these two writ petitions is against the show cause notice and the order of suspension of the petitioner s customs broker license. The prime contention of the petitioner against the show cause notice is that the third respondent/Inquiry Officer has failed to file the report within 90 days from the date of issuance of the show cause notice and therefore, the entire proceedings are vitiated. There is no dispute to the fact that the show cause notice was issued on 13-4-2018. It is also not in dispute that the petitioner filed their reply and participa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 prescribe an overall time limit of nine months 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 representation agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 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 13-7-2016, 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(1) of the Regulations. In this case, the petitioner has raised the issue on the time limit fixed under Regulation 20(5) and not 19(1). When the facts placed before this Court are very clear that the report itself was prepared and filed beyond 90 days as statutorily required and when the decision of this Court and the Delhi High Court clearly indicate that such time limit fixed is mandatory, this Court is of the view that the report so filed beyond the period of 90 days cannot be considered as a valid report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 8-4-2010 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 in a case reported in 2014 (310) E.L.T. 673 (Mad), Commissioner of Customs (Sea Port Import) v. CESTAT, Chennai, wherein the Division Bench has observed that it is not open to the Revenue to take a contra stand in respect of the time limit prescribed, since the Board Circular issued by the Central Board of Excise and Customs is binding on the Revenue. (Emphasis Supplied) 18. In 2017 (348) E.L.T. 640 (Mad), Commissioner of Customs v. MKS Shipping Agencies Pvt. Ltd., the Division Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 v. 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) E.L.T. 321, Principal Commissioner v. Unison Clearing P. Ltd., in support of his submission that the time limit is only directory as non-compliance of the provision is not visited with some penalty. In view of the decisions made by this Court as extracted supra and more particularly, decision of this Court made in Carewell Shipping Private Limited as discussed supra arising out of the same issue, which has become final and not questioned, I find that the above decisions taking contra view not having a binding nature on this Court will not help th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime 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. 23.2 In view of the foregoing and also the fact that no contrary decision by Hon ble High Court of Gujarat has been brought to our notice by either side on mandatory and declaratory nature of the time lines prescribed as well as to indicate that Board Circular No/. 09/2010-Cus at 08.04.2010 has been withdrawn or superseded, we have no difficulty in observing as deduced from decisions above that time lines are mandatory conditions and need to be observed including those prescribed in the Board Circular of 09/2010-Cus as indicated above. In the instant case since there is a breach of time lines prescribed by the Board, we therefore hold that in the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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