2019 (10) TMI 1331 - AT - Customs

Customs Brokers Licensing Regulations: Interpretation of 'Issued' and Time Compliance

D.S. CARGO AGENCY Versus COMMR. OF CUS. (AIRPORT & GENERAL), NEW DELHI

D.S. CARGO AGENCY Versus COMMR. OF CUS. (AIRPORT & GENERAL), NEW DELHI - 2020 (371) E.L.T. 611 (Tri. - Del.) Issues Involved:1. Whether the word 'issued' in Regulation 20(1) of Customs Brokers Licensing Regulations (CBLR), 2013 should include 'served'.2. Whether the time-limit prescribed in Regulation 20(1) of CBLR, 2013 is mandatory or directory in nature.Detailed Analysis:Issue 1: Meaning of 'Issued' in Regulation 20(1) of CBLR, 2013Arguments by Appellant:The appellant argued that the show cause notice was barred by limitation as it was not served within 90 days from the receipt of the Offence Report by the Commissioner. They relied on the decision in M/s. R.P. Cargo Handling Services v. Commissioner of Customs, where it was held that 'issue of notice' in Rule 20(1) of CBLR, 2013 should be treated as 'service of notice.'Arguments by Department:The Department contended that the word 'issued' should not be construed to mean 'served.' They emphasized that 'issued,' 'served,' and 'given' are used differently in the Customs Act, 1962, and should not be considered synonyms or interchangeable. They argued that the notice was issued within 90 days, and it is the service that was delayed, which should not invalidate the notice.Tribunal's Analysis:The Tribunal analyzed the principles of statutory interpretation and noted that general words should take their natural wide meaning unless it leads to absurd results. It was observed that in the Customs Act, the words 'issued,' 'served,' and 'given' are used distinctly in different sections. Section 153 of the Act clarifies that issuance of a notice precedes its service. The Tribunal concluded that the issuance of a notice is a separate event from its service, and the Commissioner’s duty is completed once the notice is issued within 90 days, irrespective of when it is served.Issue 2: Nature of the Time-Limit in Regulation 20(1) of CBLR, 2013Arguments by Appellant:The appellant argued that the time-limit for issuing the show cause notice is mandatory and must be strictly adhered to. They cited the decision in M/s. R.P. Cargo Handling Services, asserting that the notice should be served within the 90-day period.Arguments by Department:The Department argued that the time-limit in Regulation 20(1) is not mandatory but directory. They relied on the Supreme Court's decision in K.M. Ganatra & Co., emphasizing the crucial role of the Customs House Agent (CHA) and the need to punish any contraventions of the obligations imposed by CBLR Regulations.Tribunal's Analysis:The Tribunal noted that the use of the word 'shall' in the provision does not necessarily make it mandatory. They referred to the Supreme Court's decision in Sharif-Ud-Din v. Abdul Gani Lone, which held that substantial compliance might be sufficient to achieve the object of the rule. The Tribunal observed that the object of Regulation 20(1) is to ensure timely action against unlawful activities and to protect the interests of both the Customs Broker and the Department. They concluded that the time-limit is directory, not mandatory, and a procedural lapse in exceeding the time-limit should not invalidate the notice.Conclusion:The Tribunal held that the word 'issued' in Regulation 20(1) of CBLR, 2013 does not include 'served,' and the issuance of the notice within 90 days is sufficient compliance. The time-limit prescribed in Regulation 20(1) is directory in nature, and substantial compliance is adequate to achieve the regulation's objectives. The matter was referred to a Larger Bench due to the difference in opinion with the Co-ordinate Bench in the R.P. Cargo Handling Services case.