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2020 (3) TMI 438
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....ad 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 appellant herein on 12.06.2017 and SCN was issued on 06.09....
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....hat 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, the role of the Respondent/ Customs Broker had also been dealt with and in order to appreciate the same, the relevant paragraphs of the ....
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....he 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 examination even after two weeks from ordering of first check by the Appraising Group, informed the detention of the goods to the importer and agreed to seek amendment of the bill of entry considering the importer....
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....s 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 Show Cause Notice appears to have contravened the provisions of CBLR, 2013. 3.Hence, copy of the Show Cause Notice issued in F.No.ENQ 25/2016-SIIB & SIIB/19/2017 dated 06.06.2017 along with relied upon documents are forwarded for further necessary action under Custom Broker Licensing Regulations, 2013." 2.8. As contemplated under CBLR, 2....
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....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 Authorities under the parallel proceedings initiated by the Customs Authorities, pursuant to the show cause notice dated 06.06.2017, though it was ended in imposing a penalty on this Respondent/Custom Broker, the same has subsequently been set aside by the higher Authorities. Therefore, the Revenue cannot even plead that, the Respondent since has been adjudicated by ....
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....ounds 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 evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant 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 ....
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....s 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 date is taken into account for the purpose of issuance of show cause notice under Regulation 22(1) of CHALR, 2004, the show cause notice should have been issued on or before 21.12.2010, but the fact remains that the show cause notice was issued only on 18.11.2011. Therefore, whether or not the belated show cause notice issued beyond 90 days would be fatal to the entire proceedings which culminated in the Order-in-Original, whereby, the l....
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....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 noticed and followed: i)A.M.Ahamed & Co. V. Commissioner of Customs (Imports), Chennai- 2014 (309) E.L.T. 433 (Mad) ii) Masterstroke Freight Forwarders P. Ltd., V. Commissioner of Customs (I), Chennai - 2016 (332) ELT 300 (Mad.) iii) Sunil Dutt V. Commissioner of Customs (General), NCH - 2016 (337) ELT 162 (Del.) iv)Impexnet Logistics V. Commissioner of Customs (General) - 2016 (338) ELT 347 (Del.) v)Overseas Air Cargo Services V. Commissioner of Customs (General), New Dekgu- 2016 (340) ELT 119 (Del.) ....
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....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 be diluted. The decision of the Supreme Court arose out of the refusal of a Civil Court to accept a Written Statement beyond a period of 90 days stipulated in Order VIII Rule 1 C.P.C. Therefore, the decision taken in such a case cannot be relied upon. 24. Similarly, the decision of the Division Bench of the Delhi High Court, in Aval Exports vs. Union of India (2014 (301) E.L.T. 14 (Del.), relied upon by the learned counsel for the respondents, cannot also go to the rescue of the respondents. The case before the Delhi High Court concerned some applications filed for the issue of value based duty free licences in accordance with the....
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....yond 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, pass such orders, as he deems it fit either revoking the suspension order or imposing penalty within 90 days from the date of submission of the report. As this Court has already found that the very filing of the report was beyond the period of 90 days as required under Regulation 20(5) and thus taken the view that the Commissioner of Customs is not entitled to proceed further under Regulations 20(6) and 20(7) as stated supra, the impugned show cause notice cannot have legs to stand any more, as naturally it has to fall on its own, in view of the lapse committed by the Officers as stated supra, as the inquiry report, pursuant to the issuance of the show cause notice, was admitte....
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....egulation 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 certainly passed the test of limitation. 19.Hence, the issue now revolves only in a very narrow compass, i.e. whether the Revenue passed the third stage of limitation which comes under Regulation 20(7) of CBLR, 2013 or not. Again the dates are, the Enquiry Report is dated 29.11.2017 under Regulation 20(5), however, the Order-in- Original or revocation of licence was passed either on 08.05.2018 or 09.05.2018, in between there were 159 days, therefore, certainly it is beyond the 90 days limitation, as has been prescribed under Regulation 20(7). 20.Merely because of this 159 days in between these two dates, as referred to above, whether we can straight away construe that the final order of revocati....
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....t 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 -reg. Greetings to you. We have for reference Your Office Letter CHN/R-226/2013- (CHA) dtd 30/1/2018 received by us on 31/1/18 requesting our presence on 8/2/18 by 1130 AM for a personal hearing in connection with the above SCN issued by you on 6/9/17. In reply, we would like to inform you that our Consultant Shri Ajay Gupta is out of station on 8/2/18. And hence we would request an alternative date either on 12/2/18 or 13/2/18 for attending the Personal hearing before you for the referred matter. We regret for the inconvenience caused in this Regard. Thanking you." 26.Pursuant to the said request dated 05.02.2018, the Appellant/ Revenue on 09.02.2018 has communicated the following: "SUB: INTIMATION OF PERSONAL HEARIN....
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....educed 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, if the concerned party is ready to forgo or give up the limitation point out of necessity by written agreement, certainly, in such kind of situation, the doctrine of 'waiver' or doctrine of 'acquiescence' can very well be invoked. 32.The principle of 'waiver' and 'acquiescence' has been considered in a number of cases by the Hon'ble Apex Court. Illustratively, some of the Case laws where the principle was underlined by the Hon'ble Supreme Court are quoted below for easy reference. (i) P. Dasa Muni Reddy v. P. Appa Rao [(1974) 2 SCC 725]: "13. Abandonment of right is much more than mere waiver, acquiescence or laches.....Waiver is an intentional relinquishment of a known right or advantage, benefit, claim or privilege which except for such waiver t....
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....formed 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; Jaswantsingh Mathurasingh v. Ahmedabad Municipal Corporation, (1992) Supp (1) SCC 5; Sikkim Subba Associates v. State of Sikkim, AIR 2001 SC 2062; and Krishna Bahadur v. Purna Theatre & Ors., AIR 2004 SC 4282." 33.If the aforesaid principle on 'waiver' and 'acquiescence' are applied to the present facts of the case, there would be no doubt that the Respondent/Licensee intentionally relinquished his right to raise the ground of limitation, by thus, consciously abandoning the existing legal right, benefit, claim or privilege. Having known the right of raising the point of limitation against the Revenue, the Respondent/Licensee voluntarily relinquishing or abandoning such a known existing legal right by giving a written consent on 12.02.2018 stating "that this period will be reduced from the time limits when the case is d....
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....venue. 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 making a request to the Revenue to keep the file in abeyance awaiting the orders to be passed in the related/parallel proceedings initiated by the Customs Authorities where the Licensee expected some favourable orders. 39.Further, it has been specifically given up or agreed by the Licensee that, whatever period to be consumed to keep the file in abeyance as requested by it, such period would also stand excluded from the 90 days limitation prescribed under Regulation 20(7). 40.Only in these kind of situations, as we referred to above, the doctrine of 'waiver' as well as 'acquiescence', would certainly come to play. Here in the case in hand, the exact situation arose as the Respondent/ Licensee by its voluntary action has waived the limitation period. Therefore, he cannot now turn around and show the finger against the Revenue as ....