2016 (5) TMI 1238 - HC - Customs

Court sets aside suspension orders due to procedural errors, emphasizes compliance and fair process.

The Court set aside the suspension orders in the case due to non-compliance with time limits for issuing show cause notices and factual errors in the ... Period of limitation - Suspension of CB licence - Violation of Regulation 11 of CBLR 2013 - Imposition of penalty under Regulation 22 read with Regulation 20 of the CBLR 2013 - Held that:- the Court is unable to agree with the submission for the simple reason that the SCN dated 19th September 2015 was not issued under the CBLR 2013. Further, it was not issued to the Petitioner. By adding the name of the Petitioner to the said SCN dated 19th September 2015 issued under the CA by way of a corrigendum dated 1st February 2016, it cannot be said that an SCN was issued to the Petitioner under the CBLR 2013 on 19th September 2015. It bears reiteration that in terms of Regulation 20(1) of the CBLR 2013, the SCN had to be issued to the Petitioner within ninety days from the date of the receipt of offence report, i.e., within 90 days from 18th February 2015. Clearly the SCN under Regulation 20(1) of the CBLR 2013 was not issued within ninety days after 18th February 2015. Therefore, the Petitioner not having been issued the SCN within ninety days of receipt of the offence report by the Customs, the SCN dated 2nd February 2016 issued to it by the Commissioner of Customs (General) is clearly unsustainable in law. The order dated 23rd March 2015 confirming the suspension of the Petitioner's CB licence cannot also be continued on account of the failure to issue the SCN and therefore complete the enquiry within the time limit specified in Regulation 20. Consequently the said order dated 23rd March 2015 is hereby declared to be invalid and set aside on that basis. Suspension of licence - Alleged illegal imports - Held that:- the name of M/s Universal Enterprises in respect of one B/E does not find mention in the table of the said order. Therefore there is an obvious error in the impugned order. It is not clear as to the precise nature of the alleged violation committed by the Petitioner and whether it was qua the transactions involving M/s Universal Enterprises or the transactions involving Chaman Lal & Sons and Shyama Corporation. What appears to have happened is that in drafting the suspension orders qua each of the 10 CHAs/CBs there has been a mix up of facts. This by itself is sufficient to show that there was a total non-application of mind to the facts involving the Petitioner as far as the decision to suspend its CB licence was concerned. Therefore, the suspension order is set aside. - Petition disposed of Issues:1. Challenge to suspension orders under Customs Brokers Licensing Regulations 2013.2. Compliance with issuance of show cause notice within specified time limits.3. Errors in suspension order leading to non-application of mind.Analysis:Issue 1: Challenge to suspension orders under Customs Brokers Licensing Regulations 2013The case involved four writ petitions challenging separate suspension orders passed by the Commissioner of Customs under Regulation 19(1) of the Customs Brokers Licensing Regulations 2013. The Petitioner held a customs broker license and was accused of violating Regulation 11 of the CBLR 2013. The suspension orders were issued based on offence reports received from the Directorate of Revenue Intelligence.Issue 2: Compliance with issuance of show cause notice within specified time limitsThe Court emphasized the mandatory nature of time limits specified under Regulation 20(1) of the CBLR 2013 for issuing show cause notices. It was observed that the Petitioner was not issued the show cause notice within ninety days of receipt of the offence report, rendering the subsequent notice and suspension order unsustainable in law. The Court cited previous judgments highlighting the importance of adhering to time limits in such cases.Issue 3: Errors in suspension order leading to non-application of mindIn another writ petition, the Petitioner's customs broker license was suspended due to alleged violations related to import transactions. However, the suspension order contained errors, including incorrect references and a lack of clarity regarding the alleged violations. The Court noted a mix-up of facts in the suspension orders, indicating a lack of proper consideration before the decision to suspend the license was made.In conclusion, the Court set aside the suspension orders in both cases due to non-compliance with time limits for issuing show cause notices and factual errors in the suspension orders. The Respondents were allowed to issue fresh show cause notices if compliant with the regulations. The petitions were disposed of accordingly, emphasizing the importance of procedural compliance and proper application of mind in such matters.