TaxTMI 
TaxTMI 
2020 (3) TMI 438
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....STAT also on the only point of limitation had concluded that, the order of the Revenue dated 09.05.2018 in Order-in-Original revoking the Customs Broker Licence of the Respondent/Customs Broker was beyond the Statutory Limitation Period, accordingly the said order was set aside and the customs appeal was allowed by the impugned order of the CESTAT in Final Order No.40627/2019 dated 27.03.2019. Felt aggrieved over the said order of the CESTAT, the Revenue preferred this Appeal by raising the following substantial questions of law: "A. Whether in the facts and circumstances of the case, the Tribunal is right in restoring the Customs Broker License of the respondent herein? B. Whether in the facts and circumstances of the case, the Tribunal is right and justified in allowing the appeal of the assessee by accepting the contention of the assessee that the Show Cause Notice was issued on 06.06.2017 and the inquiry officer report was submitted only on 29.11.2017 and the date of revocation of the license was on 09.05.2018 which again is more than 90 days beyond the Inquiry officer report, and overlooking the fact that the offence report dt.09.06.2017 was received by the a....
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.... 2.3. It is the strong case of the Customs Authorities in respect of the said consignment of import from a foreign country (China) that though originally it was declared in the Invoice, the aforesaid four items viz., Water filter, Toy Baby Chair, Toy Ball and Toy Rattle, in the intended amendment through the second Invoice, it was claimed the following three goods viz., Toy Baby Chair Assorted, Toy Ball and Chloro di fluoro methane. 2.4. The said item viz., "Chloro di fluoro methane", is a restricted item as per the Export Import Policy of the Government. Therefore, prima facie, the Customs seems to have found that, in the name of Toy Rattle, the importer wanted to smuggle the restricted goods viz., "Chloro di fluoro methane", and in order to cover up their intended smuggling activity, they, according to the Customs, wanted to make the amendment in the Invoice/Bill of Entry, without even submitting the consignment for check up, as directed by the Customs Authorities. 2.5. These issues triggered the Customs Authorities to issue a very detailed show cause notice dated 06.06.2017 under Section 28 and 124 of the Customs Act, 1962 ("the Act"). 2.6. In the said show cause notice....
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....s (P) Ltd. for the clearance of goods declared as "Water filter, toy baby chair, toy ball and toy rattle and the said Bill of Entry was ordered for first check on 06.04.2016 by the group. (iv) However, upon learning the detention of the subject goods SIIB, the importer through the Customs Broker submitted a letter dated 21/04/2016 requesting for amendment of the Bill of Entry by adding a second invoice and by changing the description of the goods, quantity and value as per the second invoice thereby the importer amended the bill of entry to include Chlorodifluoromethane (R22 gas), a restricted item for import which requires licence from DGFT. (v) Shri.Kundan Kumar, who claimed himself to be the authorised person of M/s. Payal Enterprises vide a letter dated 02/05/2016 played innocent that the item Chlorodifluoromethane was imported from China without knowing that the item was a restricted item despite the fact that the same was not declared in the bill of lading and the booking request. (vi) Shri.S.Padmanabhan, Managing Director of the Customs Broker company M/s. Sea Queen Shipping Services (P) Ltd., had not presented the imported goods for exami....
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.... R22 gas and by his failure to ensure compliance of Regulation 11(d) and Regulation 11(n) of the Customs Broker Licensing Regulation, 2013. (vi) Penalty under the SEction 114AA of the Customs Act, 1962, should not be imposed on the Customs Broker, M/s.Sea Queen Shipping Services (P) Ltd., for giving false declarations in respect of the imported goods before Customs." 2.7. Pursuant to the show cause notice, the Customs Authorities as contemplated under Regulation 20(1) of CBLR, 2013 had sent an Offence Report on 09.06.2017 in the following terms to the Commissioner of Customs Broker Section, Commissionerate VIII, Custom House, Chennai. "Upon scrutiny of the scanned images of the container in respect of the consignment imported by M/s.Payal Enterprises, it was found that the items declared in the IGM did not tally with the images and the container was detained by SIIB Section for detailed investigation. After the completion of the investigation, Show Cause Notice had been issued under Section 28 and Section 124 of the Customs Act, 1962. 2. The Customs Broker M/s.Sea Queen Shipping Services (P) Ltd., License No.R226, who is also a noticee in the aforesaid....
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....dent and not by the inaction of the Revenue. Therefore, the learned counsel would contend that, the Order-in- Original revoking the licence is sustainable one, therefore, the order impugned passed by the CESTAT on the only ground of limitation is liable to be interfered with, since the same has not been made by analysing the issue in proper perspective by the CESTAT. 5.Per contra, Mr.J.V.Niranjan, learned counsel appearing for the Respondent/Custom Broker would make his submissions that, as to whether the time limits in CBLR, 2013 are mandatory one or mere directory, is no more res integra, as the said issue has been decided by various High Courts in number of cases and our High Court also atleast in more than two or three decisions, have taken the same view that, the CBLR, 2013 is a mandatory one and therefore, it should be construed and to be followed in stricto sensu, therefore, the argument advanced by the Revenue side, according to the learned counsel for the Respondent, is completely unsustainable, in view of the settled legal position in this regard. 6.The learned counsel for the Respondent would also contend that, even in respect of the fine imposed by the Customs Aut....
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....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 inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs Broker, for the purpose of ascertaining the correct position. (4) The Customs Broker shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his ....
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.... the CBLR, 2013 is only directory and not mandatory, whether the said contention can be accepted or not is the question where if we look at the earlier decisions in this regard, the said point raised by the Revenue as to whether the time limits in CBLR, 2013 is mandatory or directory can be easily answered. 13.In this context, a similar issue came up before a Coordinate Bench of this Court in the matter of Santon Shipping Services Vs. The Commissioner of Customs, Tuticorin and another reported in 2017-TIOL- 2388-HC-Mad-Cus. The Coordinate Bench of this Court, wherein one of us is Party (R.Suresh Kumar, J.), having considered a number of decisions of various High Courts, have concluded that, the CHALR-2004 i.e., the erstwhile Regulation which dealt with the Customs Broker Licence and that was replaced subsequently by the present CBLR, 2013, is a Mandatory Regulation. For an easy reference and understanding of the said decision, the relevant portion of the said Division Bench order are quoted hereunder: "31. Insofar as the issue of limitation is concerned, it is the case of the appellant that, admittedly, the offence report of DRI was generated on 21.09.2010. If the said ....
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....v. The Commissioner of Customs (General)] [2016(338) E.L.T.365 (Del.)] this Court reiterated that the time-limits in Regulation 20 of the CBLR/Regulation 22 of the CHALR are sacrosanct. 9. Admittedly, the SCN under the CHALR/CBLR in the present case was issued only on 9th December, 2013, i.e., beyond the mandatory period of 90 days from 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. 10.Consequently, the Court set asides the impugned order dated 1st June, 2015 passed by the Respondent revoking the licence of the petitioner. 37. That apart, atleast in two Judgments of this Court, where a similar issue came up for consideration, before one of us sitting singly (Rajiv Shakdher,J), a similar view was taken. The first Judgment is dated 15.12.2016, which was passed in W.P.No.37796 of 2016, in the matter of M/s. Sowparnika Shipping Services Vs. The Commissioner of Customs, Chennai and another wherein, the Judgments referred to hereunder were....
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....riate cases where immediate action is necessary. Regulation 22(3) prescribes a time limit of 15 days. Regulation 22(1) prescribes a time limit within which action is to be initiated. It also prescribes the time limit under Regulation 22(5). Therefore, considering the fact that the whole proceedings are to be commenced within a time limit and also concluded within a time frame, I am of the view that the show cause notice issued to the petitioner on 08.05.2010 with a copy marked to the first Respondent should be taken as the date of receipt of the offence report. Consequently, the period of 90 days should commence only from that date. If so calculated, the impugned proceedings have obviously been initiated beyond the period of 90 days. 21. ...... 22. ...... 23. Relying upon the decision of the Supreme Court In Sambhaji vs. Gangabai(2009 (240) E.L.T.161 (S.C.), it is contended by Mr.A.P.Srinivas, learned Standing Counsel for the respondents, that a procedural law should not ordinarily be construed as mandatory. But the said contention is wholly unsustainable, for the simple reason that a period of limitation prescribed by a Rule of procedure, cannot....
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....3.07.2016, is not relevant to the present facts and circumstances, since in that case this Court has considered the question as to whether the respondent therein had sufficient power to sustain the license invoking Regulation 19(1) of the Regulations. In this case, the petitioner has raised the issue on the time limit fixed under Regulation 20(5) and not 19(1). When the facts placed before this Court are very clear that the report itself was prepared and filed beyond 90 days as statutorily required and when the decision of this Court and the Delhi High Court clearly indicate that such time limit fixed is mandatory, this Court is of the view that the report so filed beyond the period of 90 days cannot be considered as a valid report and consequently further proceedings cannot be allowed to go as a follow up action. 11. Regulation 20(5) contemplates that the Commissioner shall furnish the copy of the report to the customs broker and shall require the customs broker to submit their reply within 30 days against the said report. Regulation 20(7) contemplates that the Commissioner shall after considering the report of the inquiry officer and the representation of the broker, pas....
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....we, by respectfully following those decisions and concurring with the view taken by the various High Courts as well as the Coordinate Benches of this Court, once again reiterate and amplify that, the time limits in CBLR, 2013 is mandatory, therefore, it has to be strictly followed. 17.However, in the case in hand, at the three check points viz., under Regulation 20(1), 20(5) and 20(7), whether the Revenue has passed the test of limitation and if not, where it failed, has to be gone into. 18.To appreciate the said aspects, the dates are relevant. On 09.06.2017, Offence Report was generated or sent by the Customs Authorities to the Appellant/Revenue pursuant to which show cause notice under Regulation 20(1) was issued on 06.09.2017, in between there were only 87 days, therefore, in the first stage, the Revenue passed the test of limitation. At the second stage, since the show cause notice was issued on 06.09.2017, the Revenue should have prepared and sent the Enquiry Report under Regulation 20(5) on or before 05.12.2017, the fact remains that, such Enquiry Report was sent on 29.11.2017 and in between there were only 83 days, therefore, the Revenue in the second stage also has c....
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....rred on the request of the Respondent/Licensee. On 28.11.2017 in fact, the Respondent approached the Appellant/Revenue to defer the matter even to complete the Enquiry Report on the ground that, this Court in W.P.No.26820 of 2017 as well as W.P.No.20994 of 2017 granted interim order of stay of suspension of the Customs Broker Licence of the respondent and therefore, in that context, the Respondent seems to have requested for deferral of Enquiry. However, the fact remains that, the Customs Broker Licence of the Respondent had already been revoked vide Order No.59094/2017 dated 13.10.2017 in some other case, therefore the stay order granted against the suspension order in the present case will not have any effect and therefore, that seems to have not detained the Revenue to prepare the Enquiry Report on 29.11.2017 for further proceedings. 25.In these context, after Enquiry Report, the copy of which was also given to the Respondent to respond, after several dates, at one point of time, the Respondent on 05.02.2018 has sent a request to the Appellant/ Revenue in the following terms: "Respect Sir, Sub: Personal Hearing against SCN dated 6/9/17 - Request for time -re....
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.... definitely shall be reduced from the overall 90 days limitation period provided under sub-regulation (7) of Regulation 20 of CBLR, 2013. For the said arrangement, which had been made purely on the request of the Petitioner, one Mr.Padmanabhan, Managing Director of the Respondent/Licensee has signed it in the very Note file itself on 12.02.2018. 28.Therefore, it has become very apparent and obvious that, it is not the Revenue, who kept the file, without passing the final order under Regulation 20(7) within the 90 days limitation period and it has been kept pending only at the instance of the Respondent/Licensee. 29.Moreover, it has been specifically agreed by the Respondent/ Licensee that, whatever period to be consumed for keeping the file in abeyance as per its request, would be reduced from the overall limitation period of 90 days and this has been specifically agreed upon by the Respondent/Licensee as it is evidenced from the Note file where the Managing Director of the Licensee has signed. 30.These factors have never been unearthed nor been considered by the CESTAT before deciding the issue merely on the limitation point alone. 31.Law is well settled in this regard....
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....d by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. Whenever waiver is pleaded it is for the party pleading the same to show that an agreement waiving the right in consideration of some compromise came into being. Statutory right, however, may also be waived by his conduct." (iv) State of Punjab v. Davinder Pal Singh Bhullar and others [(2011) 14 SCC 770]: "41.Waiver is an intentional relinquishment of a right. It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege, which except for such a waiver, a party could have enjoyed. In fact, it is an agreement not to assert a right. There can be no waiver unless the person who is said to have waived, is fully informed as to his rights and with full knowledge about the same, he intentionally abandons them. (Vide:Dawsons Bank Ltd. v. Nippon Menkwa Kabushihi Kaish, AIR 1935 PC 79; Basheshar Nath v. CIT, AIR 1959 SC 149; Mademsetty Satyanarayana v. G. Yelloji Rao, AIR 1965 SC 1405; Associated Hotels of India Ltd. v. S. B. Sardar Ranjit Singh, AIR 1968 SC 933;....
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.... abeyance, therefore, in the present case, there is absolutely no material to come to a conclusion that, the Revenue has failed in strictly adhering the limitation period under Regulation 20(7) of CBLR, 2013. 36.In para 42 of the order in Santon Shipping Services (cited supra), the Coordinate Bench of this Court has made it clear that, once the limitation prescribed is mandatory, as has been declared by the Courts of law, it cannot be stated that, because of the other issues, i.e., the merit of the case, this mandatory requirement of the limitation can be ignored. 37.Thereby the Division Bench in the said case has made it clear that, the mandatory requirement of the limitation cannot be ignored because of the influence of other issues. 38.Here in the case in hand, the mandatory requirement of the limitation has never been ignored by the Revenue. Even in respect of the 90 days limitation under Regulation 20(7) of CBLR, 2013, the Revenue was very conscious and was very particular about the limitation within which, they wanted to pass the final order. However, it was the Respondent/Custom Broker/Licensee should voluntarily given up its right to insist the limitation clause by....