TaxTMI 
TaxTMI 
2022 (2) TMI 372
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....espondent on the ground that the respondent had filed certain shipping bills on behalf of M/s. A.R.K. Enterprises, M/s. Y.K. Trends and M/s.Otex Overseas in collusion with the said exporters with an intention to over value the goods for obtaining excess duty drawback. The principal allegation against the respondent was that he had not complied the obligations arising under the Regulations 11(b), 11(d), 11(e) and 11(n) of the Customs Brokers Licensing Regulations, 2013 (hereinafter referred to as "the C.B.L.R., 2013"). 3. Pursuant to the prohibition orders, the appellant herein suspended the licence of the respondent vide order dated 06.02.2019 and granted post-decisional hearing on 19.02.2019 and thereafterwards on 16.04.2019, a show cause notice was issued to the respondent proposing to revoke the licence and forfeit the security deposit and impose penalty in terms of Regulation 14 of the C.B.L.R., 2013. In the meanwhile, the order of suspension of licence of the respondent was continued. After receiving reply to the show cause notice from the respondent, an Inquiry Officer was appointed by the appellant, who thereafterwards submitted a Inquiry report on 15.07.2019. In his repo....
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....ner of Customs (General), Mumbai -vs- Unison Clearing P.Ltd. and 2019 (370) E.L.T. 1750 (Tri.-Del.) in the case of Leo Cargo Services Pvt. Ltd. vs- Commissioner of Customs, New Delhi. He also placed reliance on the judgment of the High Court of Calcutta reported in 2020 (373) E.L.T. 323 (Cal.) in the case of Asian Freight -vs- Principal Commissioner of Customs (Airport and Administration). He further submits that the CESTAT has erred in holding that lending of IEC is not an offence under the Customs Act, 1962. He submits that lending of IEC is an offence under the Foreign Trade (Development and Regulation) Act, 1962 and therefore, the CESTAT was not justified in holding that it was not an offence under the Customs Act. He submits that a clear case of impersonation is made out and therefore, the Tribunal was not justified in giving a finding that lending of IEC will not amount to an offence under the Customs Act. 6. Per contra, learned counsel appearing for the respondent argued in support of the impugned order passed by the Tribunal and submits that having regard to the wordings used in Regulation 17 of the C.B.L.R. 2018, it has to be held that the time prescribed for com....
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....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 permission 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 (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, ....
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....stant Commissioner of Customs. Explanation.-Offence report for the purposes of this regulation means a summary of investigation and prima facie framing of charges into the allegation of acts of commission or omission of the Customs Broker or a F card holder or a G card holder, as the case may be, under these regulations there under which would render him unfit to transact business under these regulations." 9. A reading of the said Regulation would make it very clear that within a period of 90 days from the date of receipt of an offence report, a show cause notice is required to be issued to the Customs Broker stating the grounds on which it is proposed to revoke the licence or impose penalty and on receipt of such notice within 30 days, the Customs broker is required to submit a report making it very clear whether he desires to be heard in person by the officer appointed under the said provision of law. After receipt of such a reply, an Inquiry Officer would be appointed under Regulation 17(2) of the C.B.L.R., 2018, who shall hold an inquiry as provided under Regulation 17(3) of the C.B.L.R., 2018. A reading of Regulation 17(3) and 17(4) would go to show that during the....
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.... opportunity of hearing to the customs broker, whose licence is suspended, the Commissioner of Customs is authorised to pass such order as he deems fit either revoking the suspension or continuing it, as the case may be. However, when the Commissioner passes an order for continuing the suspension, it is imperative for him to follow the procedure under Regulation 20. The procedure for revocation of licence is provided in Regulation 20 and the issue involved before us in the present set of appeals is whether the time frame prescribed in the said Regulation is mandatory or directory. If the time frame is mandatory then the necessary consequences of not completing the inquiry within the time stipulated would result into restoration of a licence and declaring the action to revoke the licence as being invalid. If it is construed as directory, then even on expiry of period of 90 days, the procedure for revocation of licence which is initiated would continue and mere failure to adhere to the time line prescribed in the Regulation would not confer a positive benefit in favour of the Customs Broker. . . . . . . . . . . . . . . . . . . . . 11. While construing the p....
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.... is also authorised to initiate an action in form of suspension of licence with immediate effect contemplating or pending an inquiry. The imminence of the action, postponement of the opportunity of hearing that Regulation 19 provides for post decisional hearing when an action is taken to suspend the licence. Thus, the regulation aims at securing interest of the customs house agent and also the revenue. Thus, the urgency and expediency of the action permits the Authority to step in immediately or with promptitude. A balancing of interests is achieved by ensuring prompt action and avoiding undue delay in taking it to its logical conclusion. The question therefore is whether non-adherence to the time frame as mentioned in regulation 20 would be so strictly construed so as to result in declaring initiation of action itself invalid, if that is not adhered to. There might be circumstances and situations which are not within the control either of the customs house agent or the Revenue. It is possible that a customs house agent is unable to attend the proceedings on account of his ill-health or any other unforeseen contingency, resultantly, the proceedings are required to be postp....
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....se 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." 11. The High Court of Calcutta in the case of Asian Freight (supra) at para-43 has observed as follows: "43. Looking to the object of the statute in question (the 2013 Regulations read with the Customs Act) and its broad purpose, and on weighing the consequence that would ensue if the time-limit in regulation 20(1) for issuance of show notice were held mandatory instead of holding it to be directory, it is well-nigh difficult to conclude that unless revocation proceedings are initiated within ninety days of receipt of an offence report, the principal commissioner or the commissioner of customs, as the case may be, would stand denuded of the power to proceed in that direction. This Bench is of the opinion that the time-limit that has been prescribed serves a dual purpose. First, it acts as a check on the public functionary vested with the power to in....
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.... act, non-compliance of the same would not lead to any specific consequence. 14. A reading of the Regulation 17 would also go to show that the Inquiry Officer during the course of his inquiry is not only required to record the statement of the parties but also to give them an opportunity to cross-examine and produce oral and documentary evidence. In the event of the respondents not co operating, it would be difficult for the Inquiry Officer to complete the inquiry within the prescribed period of 90 days, as provided under Regulation 17(5). Therefore, we find force in the argument of the learned counsel for the appellant that the Regulation No.17 is required to be considered as directory and not mandatory. Though the word "shall" has been used in Regulation 17, an overall reading of the said provision of law makes it very clear that the said provision is procedural in nature and non-compliance of the same does not have any effect. If there is no consequence stated in the Regulation for non-adherence of time period for conducting the inquiry or passing an order thereafterwards, the time line provided under the statute cannot be considered as fatal to the outcome of inquiry.....