High Court overturns CHA license revocation, emphasizes procedural fairness

Overseas Air Cargo Services Versus Commissioner of Customs (General) New Delhi,

Overseas Air Cargo Services Versus Commissioner of Customs (General) New Delhi, - 2016 (340) E.L.T. 119 (Del.) Issues:
Revocation of Customs House Agent (CHA) license due to fraudulent activities; Violation of time limits under Customs Broker Licensing Regulations, 2013.

Issue 1: Revocation of CHA License
The case involved the revocation of a Customs House Agent (CHA) license due to fraudulent activities related to claiming fraudulent drawback on exports. The investigation revealed poor quality goods, over-invoicing, and fictitious addresses of exporters. The Commissioner of Customs imposed a penalty on the Appellant, which was paid, and later issued a show cause notice for revocation of the CHA license. The Appellant argued that the time limits under the CHALR, 2004 were not adhered to during the proceedings. The revocation was confirmed by the Commissioner, and the appeal to CESTAT was dismissed based on the seriousness of the violation. However, the High Court emphasized the mandatory nature of time limits under CHALR, 2004 and CBLR, 2013 in various judgments, leading to the conclusion that the revocation of the CHA license was unsustainable in law.

Issue 2: Violation of Time Limits
The Appellant raised the issue of non-compliance with the time limits set out in the Custom Broker Licensing Regulations, 2013 during the proceedings. The Court highlighted the mandatory nature of time limits under CHALR, 2004 and corresponding provisions in CBLR, 2013 in several judgments. It was noted that the SCN was issued after the prescribed time limit and the inquiry report was submitted more than three years after the issuance of the SCN, violating the regulations. The Court cited previous cases where revocation of licenses was deemed unlawful due to non-adherence to time limits. Consequently, the Court set aside the orders revoking the CHA license, emphasizing the importance of complying with the prescribed time limits in such cases.

In conclusion, the High Court ruled in favor of the Appellant, setting aside the orders revoking the CHA license and affirming the mandatory nature of time limits under the relevant regulations. The judgment highlighted the significance of adhering to procedural requirements and time limits in matters concerning the revocation of licenses, emphasizing the principles of natural justice and procedural fairness in such proceedings.