2021 (2) TMI 899 - AT - Customs

Customs Brokers Licensing Regulations: Interpretation of 'Issue' and Time Limit

The Tribunal determined that the term 'issue' in Regulation 17(1) of the Customs Brokers Licensing Regulations 2018 does not encompass 'serve'. ... Time limit for issue of Notice - Customs Broker - 'Issue of Notice' versus 'Service of Notice' - Third Member Bench - Interpretation of Statute - Regulation 20(1) CBLR, 2013 - Whether the word ‘issue’ in Regulation 20(1) CBLR, 2013 should include ‘serve’? - time limit prescribed in Regulation 20(1) CBLR 2013 - mandatory or directory in nature? - whether the expression issue of a notice occurring in regulation 17(1) of the Customs Brokers Licensing Regulations 2018 [2018 Regulations] would mean service of notice? - HELD THAT:- The decision of the Supreme Court in RK UPADHYAYA VERSUS SHANABHAI P. PATEL [1987 (4) TMI 5 - SUPREME COURT] and COLLECTOR OF CENTRAL EXCISE VERSUS MM RUBBER CO. [1991 (9) TMI 71 - SUPREME COURT] and the decision of the Full Bench of the Punjab and Haryana High Court in JAI HANUMAN TRADING CO. PVT. LIMITED VERSUS COMMISSIONER OF INCOME-TAX, PATIALA II AND ANOTHER [1977 (4) TMI 27 - PUNJAB AND HARYANA HIGH COURT] were not brought to the notice of the Bench deciding M/S RP CARGO, HANDLING SERVICES VERSUS COMMISSIONER OF CUSTOMS (AIRPORT & GENERAL) [2019 (5) TMI 80 - CESTAT NEW DELHI]. The Supreme Court in the aforesaid two decisions pointed out that when a statute distinguishes between issue of notice and service of notice by using both the expressions in the statute, the requirement of issue of notice would be satisfied when such notice is actually issued and not when it is served. The Supreme Court also pointed out that when there is a limitation for an authority to make an order, date of exercise of that power is the relevant date for exercise of such power and the decision of such authority comes into force or becomes operative and becomes an effective order on the date when it is signed. Thus, the date of communication of the order to the party is not relevant for the purpose of determination whether the power has been exercised within the prescribed time. However, if the statutory provision protects the interest of the person adversely affected by providing a remedy against the order, the period of limitation would commence from the date of communication of the order. Thus, in view of the aforesaid decisions of the Supreme Court in R.K. Upadhyaya and M.M. Rubber and Company, which have not been considered in R.P. Cargo Handling, it has to be held that the expression issue in regulation 17(1) of the 2018 Regulations would not mean service of notice. It needs to be noted that regulation 17(1) of the 2018 Regulations is in pari materia with regulation 20 (1) of the 2013 Regulations. Whether the time limit prescribed in regulation 20(1) of the 2018 Regulations is mandatory or directory in nature? - HELD THAT:- A perusal of the aforesaid judgment in INDAIR CARRIER PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (GENERAL) [2016 (5) TMI 775 - DELHI HIGH COURT] shows that the period of ninety days prescribed for issuance of a show cause notice under regulation 22(1), which provision is similar to the provisions of regulation 17(1) of the 2018 Regulations, was held to be mandatory in nature and, therefore, the directions issued by the Tribunal to complete the proceedings contemplated under regulation 22 within sixty days from the date of receipt of the order of the Tribunal was held not to be correct since the notice contemplated under article 17(1) had not been issued within a period of ninety days from the date of receipt of offence report - The Delhi High Court and the Madras High Court, while dealing with the provisions of regulation 22(1) of the 2004 Regulations and regulation 20(1) of the 2013 Regulations, which are similar to regulation 17(1) of the 2018 Regulations, have held that time limit prescribed for issuance of a notice within ninety days from the date of receipt of the offence report is mandatory in nature and non-compliance of the notice would result in revival of the License. The Delhi High Court has, in very clear terms, held that the time limit prescribed under the regulations for issuance of the notice within ninety days from the date of receipt of the offence report is mandatory in nature. Such being the position of law, the Licence would automatically stand revived if a notice contemplated under regulation 17(1) of the 2018 Regulations is not issued within ninety days from the date of receipt of the offence report. The answer to the two issues referred by the Division Bench are, therefore, as follows; (i) The word ‘issue’ in regulation 17 of the 2018 Regulations or regulation 20(1) of the 2013 Regulations would not include ‘serve’; (ii) The time limit prescribed in regulation 17(1) of the 2018 Regulations or regulation 20(1) of the 2013 Regulations is mandatory in nature. Issues Involved:1. Whether the word 'issue' in Regulation 20(1) CBLR, 2013 should include 'serve'.2. Whether the time limit prescribed in Regulation 20(1) CBLR 2013 is mandatory or directory in nature.Detailed Analysis:1. Interpretation of the Word 'Issue':The primary issue was whether the term 'issue' in Regulation 17(1) of the Customs Brokers Licensing Regulations 2018 (CBLR 2018) means 'serve'. The appellant argued that the notice must be served within ninety days from the date of receipt of the offence report, failing which the revocation order would lapse. The Department contended that the regulation only required the notice to be issued within ninety days, which was complied with by tendering the notice to the Postal Department within the stipulated period.The Tribunal examined the meaning of 'issue' in various legal contexts, including definitions from Black's Law Dictionary and interpretations in different regulations and statutes. It was noted that the term 'issue' is distinct from 'service' and 'given' as used in the Customs Act, 1962. The Tribunal referred to several judgments, including R.K. Upadhyaya vs. Shanabhai P. Patel and The Collector of Central Excise vs. M/s M.M. Rubber & Co., which clarified that 'issue' means the act of sending out or promulgating a notice, not necessarily its receipt by the addressee.The Tribunal concluded that the term 'issue' in Regulation 17(1) of the 2018 Regulations does not mean 'serve'. This interpretation was supported by the fact that different expressions used in the same regulation should be assigned different meanings, as established in Devidayal Electronics and Wires Limited and another vs. Union of India and another and Commissioner of Trade Tax, U.P. vs. S. S. Ayodhya Distillery.2. Nature of the Time Limit in Regulation 20(1):The second issue was whether the ninety-day time limit for issuing a notice under Regulation 20(1) of the CBLR 2013 is mandatory or directory. The Tribunal reviewed various judgments, including those from the Delhi High Court and the Madras High Court, which held that the time limits prescribed in similar regulations were mandatory. For instance, in Indair Carrier Pvt. Ltd. vs Commissioner of Customs (General) and Ors., the Delhi High Court emphasized the mandatory nature of the ninety-day period for issuing a show cause notice under Regulation 22(1) of the Customs House Agents Licensing Regulations, 2004 (CHALR 2004).Conversely, the Bombay High Court in The Principal Commissioner of Customs (General) Mumbai vs. Unison Clearing Pvt. Ltd. held that the time limits in Regulation 20 of the CBLR 2013 were directory, not mandatory. The Calcutta High Court in OTA Fallons Forwarders Pvt Ltd. vs. Union of India also followed this view.The Tribunal decided to follow the Delhi High Court's interpretation, which considered the time limits mandatory. This decision was based on the principle that when different High Courts have conflicting views, the Tribunal should follow the jurisdictional High Court's decision. The Larger Bench of the Tribunal in Collector of Central Excise, Chandigarh vs. Kashmir Conductors established that the Tribunal must follow the jurisdictional High Court's view if it has expressed an opinion on the subject matter.Conclusion:The Tribunal concluded that:1. The word 'issue' in Regulation 17(1) of the 2018 Regulations or Regulation 20(1) of the 2013 Regulations does not include 'serve'.2. The time limit prescribed in Regulation 17(1) of the 2018 Regulations or Regulation 20(1) of the 2013 Regulations is mandatory in nature.The papers were directed to be placed before the Division Bench for deciding the appeal.