TaxTMI 
TaxTMI 
2018 (6) TMI 656
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.... are of 2012. A proceeding was initiated by the Directorate of Revenue Intelligence, Ludhiana through a show-cause notice dated January 9, 2014 under Section 124 of the Customs Act, 1962. Such show-cause was adjudicated by the Additional Commissioner of Customs, Ludhiana, and an order in original dated February 27, 2015 was passed. A penalty of Rs. 1,00,000/- was imposed upon the petitioner, under Section 124 of the Act of 1962. The adjudicating authority did not find any violation of Customs House Agents Licensing Regulations, 2004. The petitioner preferred an appeal to the Commissioner of Customs (Appeal) on April 16, 2015. The petitioner received a show-cause notice dated June 23, 2017 under Customs House Agents Licensing Regulations, 2004. The petitioner replied thereto. Learned Advocate for the petitioner submits that, Regulation 22 of the Customs House Agents Licensing Regulations, 2004 prescribes a time limit of 90 days for the initiation of proceedings thereunder from the date of receipt of the offence report. In the present case, the alleged offence having taken place in 2012, a proceeding under the Regulations of 2004 in view of Regulation 22 thereof, is barred by limitat....
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.... applied to be tried under the provisions of the Customs Brokers Licensing Regulations, 2013. He submits that, quoting of a wrong section, without any prejudice being caused to a party, does not ipso facto, vitiate the order. In support of such contention he relies upon 1996 (82) Excise Law Times page 441 (SC) (Collector of Central Excise, Calcutta v. Pradyumna Steel Ltd.) and 1978 (2) Excise Law Times page J 399 (SC) (N.B. Sanjana, Assistant Collector of Central Excise, Bombay & Ors. v. The Elphinstone Spinning & Weaving Mills Co. Ltd.). He submits that, Regulation 22 of the Customs House Agents Licensing Regulations, 2004 and the Regulation 20 of the Customs Brokers Licensing Regulations, 2013 are similar to the extent that, it requires the authorities to initiate the proceedings within the time specified from the date of receipt of the offence report. In the present case, the petitioner suffered proceedings initiated at the instance of the Directorate of Revenue Intelligence, Ludhiana. The authorities in Kolkata who initiated the proceedings under the Customs House Agents Licensing Regulations, 2004, did not have any knowledge of such proceedings pending against the petitioner. ....
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..../s. Uttam Scaffolds, Mohali in respect of such transaction. The Directorate of Revenue Intelligence issued a show- cause notice dated January 9, 2014 to the petitioner proposing to impose penalty. The show-cause notice was adjudicated upon. An order in original dated October 27, 2015 was passed which imposed a penalty upon the petitioner. The petitioner preferred an appeal before the Commissioner of Customs (Appeal). Thereafter, the respondent no. 2 issued the impugned show-cause notice on June 23, 2017. The petitioner raised the contention of limitation before the adjudicating authority. By the impugned order dated November 22, 2017, such contention was rejected. Indair Carrier Pvt. Ltd. (supra) is of the view that, an issue of limitation is an issue of jurisdiction and can be raised in a writ jurisdiction despite the availability of a statuary alternative remedy. It remands the matter to the adjudicating authority for consideration on the point of limitation. The writ petition raises issues with regard to limitation. Such issues are required to be considered. The first issue is answered accordingly. Two Regulations are relevant for consideration of the issue of limitation r....
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....g to the Customs House Agent within ninety days from the date of receipt of offence report, stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs House Agent desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. Provided that the procedure prescribed in regulation 22 shall not apply in respect of the provisions contained in sub- regulation (2) to regulation 20. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs House Agent, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs shall, i....
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.... the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the licence or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inqu....
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....ipt of the offence report, stating the grounds on which it is proposed to suspend or revoke the licence. It goes on to allow the Customs House Agent an opportunity, to submit a written statement of defence, and a right of personal hearing, if so demanded by the Customs House Agent. Regulation 20 of the Regulations of 2013 also requires the Commissioner of Customs, to issue a notice to the Customs Brokers within a period of 90 days, from the date of receipt of the offence report. The Regulations of 2013 were not invoked when the show-cause notice to the petitioner was issued as apparently, the offence committed was during the period covered under the Regulations of 2004. The show- cause was issued under the provisions of the Regulations of 2004. Madras and the Delhi High Courts are of the view that, the time period stipulated in Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulations of 2013 are mandatory and not directory. Such view of the Delhi High Court is expressed in S.K. Logistics (supra), Indair Carrier Pvt. Ltd. (supra) and Overseas Air Cargo Services (supra). The view of the Madras High Court finds place in Sanco Trans Ltd. (supra). Our High ....
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....e often than not, determinative of the very question whether the provision is mandatory or directory. Where the design of the statute is the avoidance or prevention of public mischief, but the enforcement of a particular provision literally to its letter will tend to defeat that design, the provision must be held to be directory, so that proof of prejudice in addition to non- compliance of the provision is necessary to invalidate the act complained of. It is well to remember that quite often many rules, though couched in language which appears to be imperative, are no more than mere instructions to those entrusted with the task of discharging statutory duties for public benefit. The negligence of those to whom public duties are entrusted cannot by statutory interpretation be allowed to promote public mischief and cause public inconvenience and defeat the main object of the statute. It is as well to realise that every prescription of a period within which an act must be done, is not the prescription of a period of limitation with painful consequences if the act is not done within that period. ***" 43. Looking to the object of the statute in question (the 2013 Regulations re....
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....hamed (supra), regulation 22 of the 2004 Regulations was under consideration. Finding that separate time frames were provided in the various sub-regulations of regulation 22 to regulate the proceedings from its commencement till its conclusion, the learned Judge was of the view that the show cause notice ought to have been issued within ninety days. Significantly, in paragraph 25 of the decision it is recorded that the respondents did neither contend that the time limit of ninety days was directory and not mandatory, nor that the time limit need not be strictly adhered to. Considering all such aspects, the learned Judge upheld the contention raised and set aside the impugned notice. 45. Masterstroke Freight (supra) and Saro International Freight System (supra) were decided by the same learned Judge. The former decision was followed in the latter. With respect, the learned Judge appears to have taken a too narrow legalistic view on the basis of certain decisions of the Supreme Court laying down the law that when a statute requires a thing to be done in a particular manner, it must be performed in such a manner or not at all. The learned Judge also construed 'shall' ....
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....d in the statute, would in most cases be determinative. Viewed in the light thereof, the relevant regulation (regulation 20) not providing for any consequence that might necessarily follow in favour of a customs broker should any of the acts envisaged therein be not performed within the specific time frame provided therefor, has to be construed as directory. 50. The same view appears to have been taken in the Division Bench decision of this Court in Md. Yeasin (supra), relied on by Mr. Saraf. Clause 21 of the West Bengal Public Distribution System (Maintenace and Control) Order, 2003 requiring completion of proceedings within three months from date of service of notice asking for explanation from the delinquent dealer, was held not to be mandatory on a survey of various authorities by Hon'ble Asok Kumar Ganguly, J. (as His Lordship then was) speaking for the Division Bench. Paragraph 25 of the decision being important, is reproduced below: "25. But the provision is silent as to what will happen if the proceedings are not completed within a period of 3 months. It is well-settled that where a statute provides for consequences for non-compliance with a time-limit....
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....iding for the consequence of non-adherence can be interpreted to mean that, the time limit provided is directory and not mandatory. Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulations of 2013 are provisions for the purpose of checking unwholesome practices at the instance of a Customs House Agent or a Customs Agent as the case may be. These are provisions which empower the authority to revoke the licence granted as a measure of punishment for a wrongdoing of the licensed person. Any licence granted unless coupled with a grant or interest, is revocable. These provisions provide for the procedure for the revocation of the licence granted. These provisions seek to regulate the affairs of the licensed persons, so that, such licensed persons obeys the grant of licence in true spirit, on the pain of cancellation of the licence upon being found to have transgressed its parameters. The licence granted under the Regulations of 2004 or 2013 cannot be said to be coupled with any grant or interest making it irrevocable. Such is not the contentions of the petitioner. M/s. Asian Freight (Unit of Esan Freight & Travel Pvt. Ltd.) & Anr. (supra) went into the question w....
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.... show- cause notice dated January 9, 2014 to have it considered as an offence report. The averments in paragraph 10 of the writ petition are based on a surmise, and at best can be said to be speculative. There are not positive averments from the petitioner, with cogent evidence to back such statements that, the respondent no. 2 was aware of the show- cause notice dated January 9, 2014 issued by the Directorate of Revenue Intelligence, Ludhiana to the petitioner, prior to the date as noted in the impugned order. On the contrary, the show-cause notice dated January 9, 2014 was not marked to the respondent no. 2 as would appear from the records produced on behalf of the respondent no. 2, being a photocopy of such show-cause notice. The respondent no. 2 became aware of the misdeeds of the petitioner upon receipt of the order of original passed by the Directorate of Revenue Intelligence, Ludhiana dated February 27, 2015. This is the finding in the impugned order. The point of limitation was considered in the impugned order. The impugned order finds that, the respondent no. 2 received the order in original dated February 27, 2015 on March 27, 2017. It proceeds to treat the order in or....
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....rder of suspension issued under the Regulations of 2013 failed. An order in original, can in given facts of a case, be considered to be an offence report. Neither Regulation 22 of the Regulations of 2004 nor Regulation 20 of the Regulations of 2013, excludes an order in original, from the purview of being considered as an offence report. In the present case, the order in original, treated as an offence report, is not one which was issued by an adjudicating authority exercising jurisdiction under the Regulations of 2004. Therefore, I find no infirmity in the authority treating the order in original dated February 25, 2015 as the offence report under Regulation 22 of the Regulations of 2004. The fact that, the order in original dated February 25, 2015 was received by the authority concerned, invoking the provisions of the Regulations of 2004 on March 27, 2017, is not disputed on behalf of the petitioner. Nothing to the contrary is established by the petitioner. The show-cause notice under the Regulations of 2004 was issued on June 23, 2017. The impugned show-cause notice is, therefore, within the period of 90 days from the date of receipt of the order in original dated February 25, 2....