TaxTMI 
TaxTMI 
2019 (9) TMI 363
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....ai from the Directorate of Revenue Intelligence (DRI), Mumbai on 24-01-2017 alleging that the petitioner was carrying out clearances of undervalued assorted consumer goods that were imported from China by using fake Import Export Code (IEC) obtained in the name of M/s. Victor Enterprises. A copy of the offence report along with the relied upon documents and enclosures were forwarded by CBS, Mumbai to the Customs Commissionerate, Hyderabad, vide letter dated 18-8-2017. 5. Therefore, a show cause notice dated 11-10-2017 was issued to the petitioner calling upon them to show cause as to why the Customs Broker Licence given to them shall not be revoked in terms of Regulation 18(1) read with Regulation 20 of the Customs Brokers Licensing Regulation (CBLR), 2013, for contravention of the provisions of Regulations 11(a), 11(e), 11(k) and 11(n) of the CBLR, 2013. The petitioner submitted a reply dated 06-11-2017 followed by several letters. A personal hearing followed on 18-12-2017. Thereafter, the Enquiry Officer submitted a report dated 10-01-2018. 6. The enquiry report dated 10-01-2018 was forwarded to the petitioner vide letter dated 12-01-2018. Since the petitioner did not send a ....
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.... set of regulations known as "Customs Brokers Licensing Regulations, 2013". 13. Regulation 18 of these Regulations empowers the Commissioner of Customs to revoke the licence of a Customs Broker on certain grounds, with which we are not concerned in the present case. Regulation 19 empowers the Commissioner even to order the suspension of the licence of a Customs Broker, when an enquiry against such agent is pending or contemplated. 14. Regulation 20 prescribes the procedure for revocation of licence and for imposition of penalty. It reads as follows: "20. Procedure for revoking licence or imposing penalty.- (1) The Commissioner of Customs shall issue a notice in writing to 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....
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....r of Customs or Assistant Commissioner of Customs, under sub-regulation (5) : Provided that no order for revoking the license shall be passed unless an opportunity is given to the Customs Broker to be heard in person by the Commissioner of Customs." 15. The steps to be taken by the Commissioner of Customs and the time limit prescribed for him to take action, before revoking the licence and imposing a penalty upon the Customs Broker, can be easily understood if presented in a tabular column as follows: Steps to be taken/Procedure to be followed Time limit 1. Receipt of offence report --- 2. Commissioner to issue notice to the Customs Broker Within 90 days of receipt of offence receipt 3. Customs Broker to submit a written statement of defence also specifying whether he wishes to be heard in person Within 30 days of receipt of show cause notice 4. Commissioner to direct the Deputy Commissioner to inquire into the grounds which are not admitted by the Customs Broker This direction to be issued upon receipt of the written statement of defence from the Broker or after the expiry of the time limit specified for the submission of the written statement of defence 5....
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....ion of the learned counsel for the petitioner borders on disputed questions of fact. If the petitioner had chosen to go before the CESTAT by way of an appeal they could have raised these submissions. The petitioner has taken the risk of limiting their contentions only to admitted facts and hence we have to go by the assertion made by the respondents that the offence report was received only on 18-8-2017 and that therefore there was no violation of Regulation 20 (1). 20. The second contention of the learned counsel for the petitioner is that no opportunity to cross-examine the witnesses was granted, despite the petitioner making a request. We have already seen that under Regulation 20(4) a Customs Broker is entitled to cross-examine the witnesses. But Regulation 20 (4) is carefully worded. The entitlement of the Customs Broker to cross-examine, is confined only to "persons examined in support of the grounds forming a basis of the proceedings". The Inquiry Officer viz., the Deputy Commissioner or Assistant Commissioner is entitled under Regulation 20(4) to decline to examine any person on the ground that his evidence is not relevant or material. But he shall record his reasons in w....
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....esses. Therefore, the condition precedent under Regulation 20 (4) for considering the request of the Customs Broker for cross-examination, stood satisfied. Hence, the petitioner became entitled to cross-examination of these witnesses. 23. But unfortunately, the request for cross-examination was rejected by the Enquiry Officer for the reasons stated in paragraph- 27 of his report. Paragraph-27 of the enquiry report reads as follows: "27. As the request for cross-examination of witnesses was made to the Assistant Commissioner (Inquiry Officer) during the 4th PH, necessary correspondence to facilitate the same on 08-01-2018 were made as detailed in para-17 above. While the noticee has further requested for a fresh date and time for cross-examination with at least one week notice; but since the inquiry report has to be submitted within a period of 90 days from the date of issue of Notice as per Regulation 20(5) of the CBLR' 2013, the same is not possible for consideration. Further it needs to be stated that neither of the witnesses has turned up for crossexamination on the scheduled date, despite even an oral communication about the same to Shri Pramod Bhor. ... ... ... Given that....
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....tation to the enquiry report only on 06-04-2018 and that therefore the petitioner who prevented the 1st respondent from discharging his duties within the timeframe, cannot take advantage of his own wrong. 28. But the above explanation is hardly convincing. We have extracted in the tabular column the timeline within which every single step prescribed in Regulation 20 had to be followed. Under Regulation 20(6), a copy of the enquiry report should be furnished to the Customs Broker specifying a period of not less than thirty days to make a representation against the report. If he did not submit a representation within the time stipulated in the notice under Regulation 20(6), it was open to the Commissioner to proceed to pass orders after providing an opportunity to be heard in person as per the proviso under sub-regulation (7). There was no impediment for the 1st respondent to do this. But he failed to adhere to the time schedule. Therefore, the explanation offered by the respondents for not adhering to the time schedule stipulated in Regulation 20 (7) cannot be accepted. 29. Mr. B. Narasimha Sarma, learned Senior Standing Counsel for the Department, contended that the time limit ....
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.... Regulations and it was made clear in paragraph 24 of the said decision that the question of mandatory or directory nature of the Regulations was not raised. In other words, the decision of the Madras High court in A.M.Ahamed & Co did not go into the question whether the Regulation is mandatory or directory. No other court may be more competent to say so, since one of us (VRS) was the author of A.M.Ahamed & Co. 33. Thus that there are conflicting views of different High Courts, with Madras and Delhi being on one side and Bombay and Calcutta being on another side, on the question whether the Regulation is mandatory or directory. Therefore, it is now necessary to go into the root of the matter. 34. The vexed question as to whether a particular provision in a statute is mandatory or directory has come up time and again before Courts under different circumstances. One of the earliest cases to draw the attention of the Constitution Bench of the Supreme Court was Dattatreya Moreshwar v. State of Bombay AIR 1952 SC 181. The Court in that case created a dichotomy between (i) the provisions of statutes creating public duties and (ii) those conferring private rights. The provisions of st....
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....follows: "In order to find out the true character of the legislation, the Court has to ascertain the object which the provision of law in question is to sub-serve and its design and the context in which it is enacted. If the object of a law is to be defeated by non-compliance with it, it has to be regarded as mandatory. But when a provision of law relates to the performance of any public duty and the invalidation of any act done in disregard of that provision causes serious prejudice to those for whose benefit it is enacted and at the same time who have no control over the performance of the duty, such provision should be treated as a directory one. Where however, a provision of law prescribes that a certain act has to be one in a particular manner by a person in order to acquire a right and it is coupled with another provision which confers an immunity on another when such act is not done in that manner, the former has to be regarded as a mandatory one." 38. In M/s. M.R.F. Ltd v. Manohar Parrikar, the Supreme Court quoted para 1237 and 1238 of the HALSBURY'S Laws of England, 4th edition Reissue Vol.44 (1), dealing with substantive and procedural enactments. It was deduced by ....