TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 270
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.... suspension of the license has been continued under regulation 16(2) would continue to operate, even if a notice contemplated under regulation 17(1) is not issued within a period of 90 days from the date of receipt of the offence report. 4. The appellant was granted a Broker License by the Commissioner of Customs at Indore and was transacting business at Mumbai Customs Zone. This License was to continue upto October, 2024. It transpires that on 05 February, 2019, M/s. Opera enterprises and M/s. Om Traders filed two separate Bills of Entry and on 07 February, 2019, information regarding mis-declaration of goods in the said Bills of Entry was reported. Thereafter, on 06 August, 2019, a show cause notice was issued under section 124 of the Customs Act, 1962 Customs Act to an employee of the appellant and an order dated 16/18 September, 2019 was issued by the Principal Commissioner of Customs at Mumbai for withdrawal of the permission granted to the appellant to transact business at Mumbai Customs Zones with immediate effect. This order together with a copy of the show cause notice dated 6 August, 2019 was communicated to the Commissioner of Customs at Indore by letter dated 23 Septem....
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.... Revocation of licence or imposition of penalty. - The Principal Commissioner or Commissioner of Customs may, subject to the provisions of regulation 17, revoke the license of a Customs Broker and order for forfeiture of part or whole of security, on any of the following grounds, namely :- (a) failure to comply with any of the conditions of the bond executed by him under regulation 8; (b) failure to comply with any of the provisions of these regulations, within his jurisdiction or anywhere else; (c) commits any misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station; (d) adjudicated as an insolvent; (e) of unsound mind; and (f) convicted by a competent court for an offence involving moral turpitude or otherwise." 10. Regulation 16 deals with suspension of license and is as follows:- "16. Suspension of license. - (1) Notwithstanding anything contained in regulation 14, the Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Br....
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....Commissioner of Customs, as the case may be, shall prepare a report of the inquiry and after recording his findings thereon submit the report within a period of ninety days from the date of issue of a notice under sub-regulation (1). (6) The Principal Commissioner or Commissioner of Customs shall furnish to the Customs Broker a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, and shall require the Customs Broker to submit, within the specified period not being less than thirty days, any representation that he may wish to make against the said report. (7) The Principal Commissioner or Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the license of the Customs Broker within ninety days from the date of submission of the report by the Deputy Commissioner 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 Cus....
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.... order does not mention that an inquiry against the Customs Broker was pending or contemplated. 15. Regulation 16 (2) provides that where a license is suspended under sub-regulation (1), the Commissioner of Customs shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose license has been suspended and may pass such order as he deems fit either revoking the suspension or continuing the suspension within fifteen days from the date of hearing granted to the Customs Broker. Personal hearing was provided to the appellant whereafter the suspension of the Brokers Licence of the appellant was continued by order dated 5 November, 2019. 16. The proviso to regulation 16(2) provides that in case the Commissioner of Customs passes an order for continuing the suspension, further procedure thereafter shall be as provided in regulation 17. 17. Regulation 17 (1) provides that 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 license or impose penalty requiring the said....
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....t to the provisions of regulation 17, revoke the license of a Customs Broker and order for forfeiture of part or whole of security, on any of the following grounds :- "(a) failure to comply with any of the conditions of the bond executed by him under regulation 8; (b) failure to comply with any of the provisions of these regulations, within his jurisdiction or anywhere else; (c) commits any misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station; (d) adjudicated as an insolvent; (e) of unsound mind; and (f) convicted by a competent court for an offence involving moral turpitude or otherwise." 23. Regulation 16 deals with suspension of license. It provides that notwithstanding anything contained in regulation 14, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated. Thus, regulation 16(1) confers power on the Commissioner of Customs to suspend the license if immediate action i....
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....as a Customs Broker. The submission is that in order to achieve this purpose, regulation 17(1) provides for issue of a notice within 90 days from the date of receipt of the offence report In the present case, it is not disputed by the Revenue that the offence report was received by the Commissioner of Customs at Indore on 27 September, 2019. 27. It is in the light of the aforesaid discussion that the decisions relied upon by learned Counsel for the Appellant and the learned Authorized Representative of the Department need to be examined. 28. The issue as to whether issuance of a notice within the stipulated period was mandatory or directory was examined by the Delhi High Court in Indair Carrier Pvt. Ltd. vs. Commissioner of Customs (General) and Ors. 2016 (337) ELT 41(Del) The provisions of the Customs House Agents Licensing Regulations, 2004 2004 Regulations had come up for interpretation. Regulation 22(1) is reproduced below:- "22. Procedure for suspending or revoking licence under Regulation 20. - (1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent within ninety days from the date of receipt of offence report, stating the grounds on w....
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....eipt of offence report, by prescribing time limits at various stages of Issue of Show Cause Notice, submission of inquiry report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs recording his findings on the issue of suspension of CHA license, and for passing of an order by the Commissioner of Customs. Suitable changes have been made in the present time limit of forty five days for reply by CHA to the notice of suspension, sixty days time for representation against the report of AC/DC on the grounds not accepted by CHA, by reducing the time to thirty days in both the cases under the Regulations." 7. This Court has consistently emphasised the mandatory nature of the aforementioned time-limits in several of its decisions. These include the decision in Schankar Clearing & Forwarding v. C.C. (Import & General) - 2012 (283) E.L.T. 349 (Del.), the order dated 25th April, 2016 passed by this Court in Customs Appeal No. 14/2016 (Commissioner of Customs (General) v. S.K. Logistics) and the order dated 29th April, 2016 in W.P. (C) No. 3071/2015 (M/s. Sunil Dutt v. Commissioner of Customs (General) New Customs House). The same position has been reiterated by the Ma....
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....rom the date of receipt of the offence report by the Respondent, i.e., 31st January, 2013. Consequently, all proceedings pursuant thereto are held to be invalid. Further, even the enquiry report was not submitted within a period of 90 days of the issuance of the SCN." 33. In Overseas Air Cargo Services vs. Commissioner of Custom (General), New Delhi 2016 (340) ELT 119 (Del), the Delhi High Court again after placing reliance upon a number of judgments, observed that the provisions of regulation 22(1) of the 2004 Regulations are mandatory in nature and the relevant paragraphs are as follows:- "13. This Court has in a series of judgments dealt with the question of mandatory nature of time limits set out in CHALR, 2004 and the corresponding provisions under the CBLR, 2013. This Court has in the following judgments reiterated the mandatory nature of the time limits set out in the CHALR, 2004 and corresponding provisions in the CBLR, 2013: (i) Order dated 29th April, 2016 in WP(C) 3071/2015 [Mr. Sunil Dutt, through Proprietor v. Commissioner of Customs (General), New Customs House] [2016 (337) E.L.T. 162 (Del.)]; (ii) Order dated 12th May, 2016 in CUSAA 25/2015 [Indair Carrier Pv....
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.... 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 defence 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." 35. After taking note of the earlier decision of the Madras High Court in The Commissioner of Customs, Chennai vs. CESTAT and Others) 2014 (310) ELT 673, the Madras High Court in Saro International held that the time limit prescribed under regulation 20(1) of the 2013 Regulations is mandatory. The observations of the High Court are as follows:- "24. The Customs Broker Licensing Regulations, 2013 were promulgated in exercise of powers conferred under sub-section (2) of Section 146 of the Customs Act, 1962. It is only under the regulations, the licence is granted and the regulations also contain various provisions to regulate the affairs of the customs broker including the revocation of the licence. The regulations contemplate action against the c....
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....in Regulation 18 and procedure in Regulation 20(1), the use of the term "shall" cannot be termed as "directory". It is pertinent to mention here that the CBLR, 2013 have replaced the CHA Regulations. The CHA Regulations did not have any time limit to complete the proceedings. Therefore, by a Circular 9/2010, dated 8-4-2010, the necessity to include a time limit for initiating action was addressed by the Board after field inspection and by a notification dated 8-4-2010, amendments prescribing time period for initiating action and completing proceedings was made. The same was given effect by notification dated 20-1-2014. Whereas, under the CBLR, 2013 having found the necessity to prescribe a period, the Central Board, the statutory authority had included the same in the Regulations itself, when they were brought into force. Therefore, when a time limit is prescribed in Regulations, which empowers action under Regulation 18 by following the procedure in Regulation 20(1), the use of the term "shall" cannot be termed as "directory". Under such circumstances, the rule can only be termed as "mandatory". 31. Therefore, this Court is of the view that the impugned show cause notice issued....
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....ot prolonged and some checks and balances must be ensured. One step by which the unnecessary delays can be curbed is recording of reasons for the delay or non-adherence to this time limit by the Officer conducting the inquiry and making him accountable for not adhering to the time schedule. These reasons can then be tested to derive a conclusion whether the deviation from the time line prescribed in the Regulation, is "reasonable". This is the only way by which the provisions contained in Regulation 20 can be effectively implemented in the interest of both parties, namely, the Revenue and the Customs House Agent." (emphasis supplied) 39. This decision of the Bombay High Court was subsequently followed by the Bombay High Court in Commissioner of Customs (General) vs. Razvi Shipping Agency 2019 (368) ELT 850 (Bom). 40. The Calcutta High Court in OTA Fallons Forwarders Pvt Ltd. vs. Union of India 2018 (362) ELT 947 (Cal), after referring to the aforesaid judgments of the Delhi High Court, the Madras High Court and the Bombay High Court followed the view expressed by the Bombay High Court and held that the time limit prescribed in regulation 22(1) of the 2004 Regulations or regulat....
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.... notice within 90 days from the date of receipt of the offence report is mandatory in nature, whereas the Bombay High Court and the Calcutta High Court have held that the requirement of issuance of the notice within the stipulated period is not mandatory in nature. 42. The issue, therefore, is which set of decisions should be followed. Fortunately, this issue has been examined by a Larger Bench (Five Member Bench) of the Tribunal in Collector of Central Excise, Chandigarh vs. Kashmir Conductors 1997 (96) ELT 257 (Tri). One issue that was addressed by the Larger Bench was what should be done when the Tribunal is faced with conflicting decisions of High Courts. The five member Larger Bench of the Tribunal held that if the jurisdictional High Court has taken a particular view on an interpretation or proposition of law, that view has to be followed, but if the jurisdictional High Court has not expressed any view in regard to the subject matter and there are conflicting views of other High Courts, then the Tribunal will be free to formulate its own view. The relevant paragraphs of the decision of the Larger Bench are reproduced below:- "10. The question as to how the Tribunal should ....
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....eported in 1996 (82) E.L.T. 512, it has been held that the decision of a particular High Court should certainly be followed by all authorities within the territorial jurisdiction of that High Court and that the authorities in another State are not bound to follow the views taken by a particular High Court in the absence of a decision by the jurisdictional High Court with regard to constitutionality of a provisions. The Tribunal has held that since the adjudication of vires of a provision of a statute or Notification is outside the jurisdiction of the Tribunal and the jurisdictional High Court i.e., the High Court having jurisdiction over the authority and the assessee, has not struck down the provision or Notification as ultra vires, the Tribunal has to follow the same and the assessee is entitled to take the stand that he is entitled to the benefit of the particular provision or Notification since the jurisdictional High Court has not struck it down, even though some other High Court may have done so. In case the conflict of decisions among High Courts does not relate to vires of any provision or Notification, it has been held that the Tribunal has to proceed in accordance with th....