2023 (9) TMI 1734 - AT - Customs

Customs broker licence suspension pending inquiry u/reg 17(1) timelines, set aside after 11-month delay

Regulation 17(1) of the Customs Brokers Licensing Regulations mandates that the Principal Commissioner initiate proceedings within 90 days of receipt of ... Suspension of Customs Broker License - Principal Commissioner has failed to take final decision within 90 days from the date of Inquiry Report - HELD THAT:- Admittedly, in the present case, the Inquiry Officer has been appointed but no inquiry has been conducted though the Licence was suspended on 17.11.2022, which shows that almost 11 months have been completed without any action being initiated as per the statutory provisions. Regulation 17 (1) is very clear that the proceedings shall be initiated by the Principal Commissioner within 90 days from the date of receipt of the Offence Report. In the case of KTR Logistics Solutions Private Limited [2019 (12) TMI 22 - MADRAS HIGH COURT], the Hon’ble Madras High Court has held that 'I am in agreement with the submission made by the Learned Counsel for the petitioner in view of the fact that Regulation 20(5) contemplates not only preparing a report of the enquiry and also submitting the same within a period of 90 days from the date of issuance of the show cause notice. Therefore, it cannot be said that preparation was made in time and thus, it satisfies Regulation 20(5).' The above cited case law is squarely applicable to the facts and circumstances of the present proceedings. Accordingly, the confirmation of suspension of CB Licence of the appellant passed by the authorities on 04.01.2023 set aside. The Department is directed to allow the normal functioning of the appellant as Customs Broker with immediate effect - Appeal allowed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the continued suspension/confirmation of suspension of a Customs Broker licence could be sustained when proceedings under Regulation 17 of the Customs Broker Licensing Regulations, 2018 were not initiated and carried forward within the prescribed timelines from the offence report. (ii) Whether non-conduct of inquiry despite appointment of an Inquiry Officer, coupled with prolonged inaction, vitiated the confirmation of suspension and required restoration of normal functioning. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Effect of failure to initiate and complete action under Regulation 17 within prescribed time limits Legal framework: The Court examined Regulation 17 of the Customs Broker Licensing Regulations, 2018, including: (a) initiation of proceedings by issuance of notice within 90 days from receipt of the offence report; (b) submission of the Inquiry Officer's report within 90 days from issuance of notice; and (c) passing of final decision within 90 days from the inquiry report. Interpretation and reasoning: The Court found that, although an Inquiry Officer had been appointed, no inquiry had been conducted and no action had been initiated as contemplated under Regulation 17, even though nearly 11 months had elapsed after the licence suspension. The Court treated the prescribed timelines as mandatory, applying the relied-upon precedents on mandatory compliance with the time limits under the licensing regulations. Conclusion: The confirmation of suspension was held unsustainable due to violation of the mandatory time-bound procedure under Regulation 17, warranting interference. Issue (ii): Whether prolonged inaction after suspension, despite appointment of Inquiry Officer, invalidated the confirmation of suspension and required restoration of operations Interpretation and reasoning: The Court considered the admitted position that, despite the suspension having been ordered earlier, no inquiry was conducted and statutory steps were not pursued. This prolonged inaction was treated as contrary to the scheme of Regulation 17 requiring timely progression of proceedings. Conclusion: The Court set aside the order confirming suspension and directed that the customs broker be permitted to resume normal functioning with immediate effect.