Tribunal overturns Customs broker license revocation citing procedural timeline violation under CHALR, 2004

M/s S.K. Logistics Versus CC (General) New Delhi

M/s S.K. Logistics Versus CC (General) New Delhi - 2016 (331) E.L.T. 486 (Tri. - Del.) Issues:
Revocation of Customs broker license and forfeiture of security deposit.

Analysis:
The case involved an appeal against the revocation of a Customs broker license and the forfeiture of the security deposit. The appellant had filed shipping bills under the Duty Drawback Scheme for consignments of readymade garments, which were found to be short and of inferior quality during examination. Investigations revealed that the exporter mentioned in the shipping bills was non-existent, leading to the revocation of the appellant's license based on violations of CHALR, 2004 regulations. The appellant raised several contentions, including the delay in investigations, compliance with regulations, and the introduction of new norms post the filing of shipping bills.

The tribunal considered the arguments presented by both sides. It was established that the appellant did not obtain authorization from the non-existent exporter, never met or contacted the exporter, and failed to fulfill obligations under Regulation 13(a), (d), and (e). The tribunal agreed that the appellant could not be held guilty of violating Regulation 13(o) as it came into existence after the filing of shipping bills. However, the proceedings were found to violate the timeline prescribed under Regulation 22 of CHALR, 2004, as the enquiry report was submitted more than three years after the notice was issued, rendering the proceedings unsustainable.

The tribunal rejected the Revenue's argument that the timeline under Regulation 22 should be considered directory rather than mandatory. It emphasized the importance of respecting prescribed timelines in subordinate legislation, even if considered directory. The tribunal referenced the Delhi High Court judgment in a similar case involving the suspension of a license and concluded that the gross violation of Regulation 22 warranted setting aside the impugned order and allowing the appeal. The tribunal highlighted that the judgments cited by the Revenue did not address such blatant violations of Regulation 22, further supporting its decision to overturn the revocation of the license and forfeiture of the security deposit.