2018 (7) TMI 2365 - HC - Customs

Show-cause notice for customs broker license revocation set aside due to 90-day limitation under Regulation 20(1)

M/s. T. Shanmugasundaram Versus The Commissioner of Customs,

The HC set aside the show-cause notice for revocation of customs broker's license due to limitation. The court held that under Regulation 20(1) of Customs ... Revocation of the Customs Broker's license was within the prescribed time limit under the Customs Brokers Licensing Regulations, 2013 - HELD THAT:- The detection of the offence must have led to recording of statements from concerned individuals. In view of that matter, this statement recorded in respect of an importer namely M/s.ASP Senna Traders, Kutch, Gujarat must be after detecting the offence and the statement recorded from the petitioner himself was on 05.06.2014. Therefore, it is very clear that some offence was detected against the petitioner as early as on 28.05.2014 much less on 05.06.2014, when a statement was recorded. As per 20(1) of the Regulation, 2013, the Commissioner shall issue a show-cause notice within 90 days from the date of offence report. Since there is no offence report mentioned in the representation, it is construed that the date of offence shall be prior to 28.05.2013 and it came to the knowledge of the Commissioner before recording the statement. If that is taken as date of offence and same offence report is sent to the Commissioner, the Commissioner should have issued a show-cause notice for revoking the licence on or before 05.09.2014, much less before 25.02.2015, whereas the show-cause notice came to be issued only on 11.11.2015. The contention, therefore, made by the petitioner that the show-cause notice dated 11.11.2015 is barred by limitation, has some force. Conclusion - Regulation 20 is mandatory in nature and if any failure in not issuing show-cause notice within 90 days, would vitiate the entire proceedings. Therefore, the show-cause notice dated 11.11.2015 issued by the respondent is liable to be set aside. SCN is set aside - petition allowed. The issues presented and considered in the judgment are as follows:1. Whether the show-cause notice issued for the revocation of the Customs Broker's license was within the prescribed time limit under the Customs Brokers Licensing Regulations, 2013.2. Whether the failure to issue the show-cause notice within the specified time period vitiates the entire proceedings.Issue-Wise Detailed Analysis:The Court examined Regulation 20(1) of the Customs Brokers Licensing Regulations, 2013, which mandates the Commissioner of Customs to issue a notice within 90 days from the date of receipt of an offense report to the Customs Broker. The petitioner contended that the show-cause notice for revocation of license was barred by limitation as it was not issued within the stipulated 90-day period.The Court analyzed the relevant legal framework and precedents, including a previous judgment in AM Ahamed & CO. Vs. Commissioner of Customs (Imports), Chennai, which discussed the meaning of an offense report and the grounds for revocation of a license. The Court emphasized the mandatory nature of Regulation 20 and the importance of adhering to the prescribed time limits.Key evidence and findings included various documents relied upon by the respondent, such as statements from individuals and circulars providing procedural guidelines. The Court noted that the offense must have been detected based on these documents, and the show-cause notice was issued long after the alleged offense took place.The Court applied the law to the facts by determining that the show-cause notice was indeed issued beyond the 90-day period stipulated in Regulation 20(1). The Court cited previous judgments to support the conclusion that failure to adhere to the time limit for issuing a show-cause notice would render the proceedings invalid.Competing arguments were considered, with the petitioner arguing that the delayed issuance of the show-cause notice should invalidate the proceedings, while the respondent likely argued for the validity of the notice despite the delay.Significant Holdings:The Court held that the show-cause notice issued on 11.11.2015 for the revocation of the Customs Broker's license was indeed beyond the 90-day period mandated by Regulation 20(1). As a result, the Court set aside the show-cause notice and allowed the writ petition, emphasizing the mandatory nature of the time limit prescribed in the regulations.In conclusion, the Court's decision in this case underscores the importance of complying with statutory time limits for issuing show-cause notices in matters related to the revocation of licenses. Failure to adhere to such time limits can result in the invalidation of proceedings, as demonstrated in this judgment.