2016 (9) TMI 473 - AT - Customs

Tribunal overturns CHA license revocation due to missed deadline, citing legal precedents.

M/s. Schankar Clearing & Forwarding Versus Commissioner of Customs (Import & General)

The tribunal set aside the revocation of the CHA license and forfeiture of security due to the breach of the timeline prescribed under the Customs House ... Revocation of CHA licence - Regulation 22(7) of the Customs House Agent Licensing Regulations 2004 - forefeiture of security deposit - CHA Regulation No. 22(5) - Madras High Court judgment in the case of AM Ahmad Co. vs CC Chennai [2014 (9) TMI 237 - MADRAS HIGH COURT] is relied upon. - Held that: - At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording his findings thereon submit the report within a period of 90 days from the date of issue of notice under sub-Regulation 1. The SCN in this case under Regulation 22(1) ibid was issued on 05.06.2012 but the inquiry report was submitted on 20.03.2015 i.e. more than 21 months after issuance of SCN - the impugned order is unsustainable on account of time bar - appeal disposed off - decided in favor of appellant. Issues:Revocation of CHA license under Regulation 22(7) of the Customs House Agent Licensing Regulations 2004 and forfeiture of security; Breach of timeline prescribed under Regulation 22(5) of CHALR; Interpretation of mandatory vs. discretionary timelines in judgments by Madras High Court and Delhi High Court.Analysis:The appeal was filed against the revocation of CHA license and forfeiture of security by the Commissioner of Customs New Delhi. The appellant's advocate argued that the offense was not severe enough to warrant license revocation. The advocate also highlighted a breach of timeline, stating that the inquiry report was submitted more than 21 months after the issuance of the Show Cause Notice (SCN) under Regulation 22(1) of CHALR. Reference was made to the Madras High Court judgment in AM Ahmad Co. vs. CC Chennai, emphasizing that breaching time limits in CHALR is fatal to the order.The Departmental Representative (DR) contended that the appellant had violated CHALR significantly, justifying the punishment. However, acknowledging the breach of timeline, the DR cited a Delhi High Court judgment in Burleigh International vs. CC, stating that timelines under CHALR are not mandatory. The tribunal considered both arguments and examined the relevant regulations.The tribunal noted that the inquiry report was submitted well beyond the prescribed 90-day timeline under Regulation 22(5) of CHALR. Referring to the Madras High Court judgment in AM Ahmad, it was established that breaching the timeline is fatal to the order. A comparison was made with the Delhi High Court judgment in Burleigh International, clarifying the distinction between mandatory and discretionary timelines in different regulations. The tribunal found no conflict between the two judgments.Based on the analysis and the precedence set by the Madras High Court, the tribunal concluded that the impugned order was unsustainable due to being time-barred. Citing the Allahabad High Court judgment in Commissioner vs. Monsanto Manufacturing Pvt. Ltd., the tribunal refrained from delving into the case's merits once the time bar was established. Consequently, the tribunal set aside the impugned order with any consequential relief.In conclusion, the tribunal's decision was based on the breach of the timeline prescribed under CHALR, following the legal precedents set by various High Courts.