2023 (7) TMI 892 - AT - Customs

Custom Broker's license revocation overturned due to procedural error; lack of evidence for collusion in misdeclaration considered.

The tribunal set aside the revocation of the Custom Broker's license, forfeiture of the security deposit, and penalty imposition due to non-compliance ... Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - availment of drawback wrongfully - mis-declaration in terms of Quality and Quantity in 29 Shipping Bills - HELD THAT:- It can be seen from Regulation 20 that the Department has to issue the Show Cause Notice in writing to the customs broker within a period of 90 days from the date of receipt of an offence report informing the Customs Broker, the grounds on which it is proposed to revoke the license or impose penalty - In the present case, there is no offence report. In the case of M/S. M.M. LOGISTICS VERSUS COMMISSIONER OF CUSTOMS (AIRPORT & GENERAL) , NEW DELHI [2020 (4) TMI 80 - CESTAT NEW DELHI] it was held that in the absence of filing of a specific offence report the date of occurrence itself should be considered as the offence report. In the present case, the date of occurrence /examination of goods is 31.01.2017. The Show Cause Notice ought to have been issued within 90 days from this date. However, the Show Cause Notice has been issued only on 19.01.2018, which is beyond the stipulated time limit of 90 days. The higher courts have always considered that it is mandatory to follow the time period stipulated in these Regulations - The Hon’ble High Court in the case M/S. SABIN LOGISTICS PVT. LTD., MR. S. LOGANATHAN VERSUS COMMISSIONER OF CUSTOMS, SHRI FELIX RAJ [2019 (4) TMI 1713 - MADRAS HIGH COURT] held that when Regulation spells out specific period of limitation, such period has to be mandatorily complied. In the case of M/S. HSN SHIPPING PRIVATE LIMITED VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS [2020 (2) TMI 175 - MADRAS HIGH COURT] the Hon’ble Jurisdictional High Court held that time limit for issuing the Show Cause Notice is mandatory and the notice issued after 90 days of offence report is to be quashed. The revocation of license ordered is vitiated for not complying with mandatory procedure. The impugned order therefore cannot sustain - Appeal allowed. Issues involved:The appeal against revocation of Custom Brokers license, forfeiture of security deposit, and imposition of penalty.Revocation of Custom Broker's License:The case involved an investigation into misdeclaration and attempt to avail wrongful drawback by an exporter through a Customs Broker. The goods were found to be mis-declared with respect to quantity and value, leading to the revocation of the license, forfeiture of security deposit, and imposition of a penalty. The appellant argued that the Show Cause Notice was issued beyond the stipulated time limit of 90 days from the date of the offense report, as mandated by Regulation 20. The appellant also contended that there was no evidence to prove collusion or abetment in misdeclaration. The appellant further argued that revocation of the license was an extreme punishment and not warranted in this case as there was no knowledge of the variation in quantity and quality of the goods intended for export.Compliance with Time Limits:The appellant raised concerns regarding the compliance with time limits for issuing the Show Cause Notice and providing the inquiry report. It was argued that the Show Cause Notice was issued much later than the required 90 days from the date of the offense report, as mandated by Regulation 20. The appellant cited previous court decisions emphasizing the mandatory nature of time limits specified in regulations and contended that the revocation of the license was vitiated due to non-compliance with the mandatory procedure.Legal Precedents and Compliance:The judgment referred to previous court decisions highlighting the mandatory nature of time limits specified in regulations. It was noted that the Show Cause Notice should have been issued within 90 days from the date of the offense report, as per Regulation 20. Failure to comply with this time limit was deemed to vitiate the revocation of the license. Citing cases such as M.M Logistics Vs. Commissioner of Customs and Sabin Logistics Pvt. Ltd., the judgment emphasized the importance of adhering to the specified time limits in regulatory procedures.Decision and Conclusion:After considering the arguments presented and legal precedents, the tribunal concluded that the revocation of the license was vitiated due to non-compliance with the mandatory procedure of issuing the Show Cause Notice within the stipulated time limit. The impugned order was set aside, and the appeal was allowed with consequential relief, if any, as per law. The judgment was pronounced in open court on 21.07.2023.