TaxTMI 
TaxTMI 
2022 (8) TMI 115
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....oms, Excise and Service Tax Appellate Tribunal (hereinafter referred to as the 'CESTAT'). 3. By an order dated 29.03.2022, this Court framed the following questions of law: - "(i) Whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) misdirected itself in law by holding that the timeline prescribed under Regulation 20(5) of the Customs Brokers Licensing Regulations, 2013 is directory? (ii) Whether the revocation of the Appellant's Licence was vitiated on account of the failure to afford him the opportunity to cross-examine the persons, based on whose statements, his licence was revoked?" 4. We were informed by the counsel for the Appellant on 23.05.2022 that the Appellant does not wish to press the second question of law framed above. Therefore, this judgment is confined to only the following question: - "(i) Whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) misdirected itself in law by holding that the timeline prescribed under regulation 20(5) of the Customs Brokers Licensing Regulations, 2013 is directory?" 5. The brief facts relevant for the purpose of this judgment are as follows:- 5.1 Information was r....
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....ravention of Regulations 10(d), (g) and (q) of the Custom Broker Licensing Regulations, 2018 (CBLR 2018) read with erstwhile CBLR 2013 and be made liable for action under Regulation 14 read with Regulation 17 and 18 of the said Regulations for revocation of their Custom Broker Licence, forfeiture of part or whole security and penalty. 5.5 The show-cause notice dated 10.08.2018 (SCN) further stated that Ms. Anamika Singh, Deputy Commissioner, ACC Import was appointed as the Inquiry Officer and asked the Appellant to reply within 30 days from the issuance of the show-cause notice. 5.6 The Appellant sent a written statement of defence dated 05.10.2018 to the Inquiry Officer. In the written statement, it is stated by the Appellant that though the charge against him is that he diverted goods from a customs bonded warehouse, he is neither an importer and/or owner of the goods, nor the CHA, and the entire allegation against him is based on uncorroborated statements of witnesses and certain persons. The Inquiry Officer granted a personal hearing to the Appellant herein and the same was attended on 30.11.2018. Thereafter, the Inquiry Officer submitted its Inquiry Report dated 06.12.20....
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....o finding on the issue of limitation as raised by the Appellant was set forth in the order. 5.10 The Appellant preferred an appeal against the Order-in-Original before the CESTAT, New Delhi. The CESTAT passed an order dated 01.10.2019 in which it is stated that the Appellant contended the following as his defence:- "3. It is submitted that the grounds of defence of the appellant have not been considered by the adjudicating authorities below. It is impressed upon that the findings about violation of Regulations of CBLR 2018/2013 on the part of the Appellant are liable to be set aside on the ground of limitation alone as the enquiry report was submitted after expiry of 90 days of the issuance of show cause notice and the same was not submitted as per the provisions carried out under Regulations 20(5) of CBLR, 2013. However, the said ground has not been considered by the Commissioner. Thus, the Order is liable to be set aside on this score only. With respect to merits, it is submitted that there is no evidence on record except mere statements of various people without any corroboration thereto. Those statement makers were never allowed to be cross-examined by the ....
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....lso observed that vide his letter dated 30.10.2017, Shri Sanjeev Maggu had stated that no firm in the name of M/s. Leo Cargo Services ever existed at the address on which the hearing notices were served. Thus, the malafide intentions to not to enable the DRI officials to unearth the modus operandi of committing the alleged illegal act were very much apparent on the record. These reasons are sufficient to hold that the Inquiry officer could not maintain the time line of 90 days for submitting the report. Accordingly, we are of opinion that the customs house agent cannot be permitted to take benefit of his own wrong, on the ground that the process is not completed within the stipulated period. In such circumstances, if the provision is construed in such a rigid form and no flexibility is allowed, though it results into declaration of the entire action of the revenue as illegal, it would not ensure justice rather shall defeat it? Thus, we answer the question framed, as above, as follows: In view of the above noticed intention of CB to not to enable the Department to adhere to the impugned time limit despite that the illegal act of diverting the warehoused goods to domestic ma....
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....itted on 06.12.2018 and considering all the facts, final order has been passed by the Competent Authority vide Order-in-Original No. 05/MK/Policy/2019 dated 04.02.2019. Therefore, the proceedings in the said case under the CBLR have been completed well within the "over all" time limit prescribed as per the above-mentioned CBIC Circular dated 08.04.2010. 7.2 It is further explained in the reply affidavit that the denial of the right to cross-examination is valid in law as the Petitioners were not able to produce on record any document that denied the charges. Since the Appellant does not wish to press the second question of law i.e. "(ii) Whether the revocation of the Appellant's Licence was vitiated on account of the failure to afford him the opportunity to cross-examine the persons, based on whose statements, his licence was revoked?" We do not propose to deal with the issue of denial of the right of cross-examination in the judgment. 7.3 It was further stated in the reply that the Adjudicating Authority had revoked the Appellant's Customs Brokers Licence by Order-in-Original dated 04.02.2019 after finding that the Appellant had grossly violated the provisions un....
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....ncy vs. Commissioner of Customs (interim); wherein, the Revenue itself has held that the time frame under the Customs Broker Licensing Regulations, 2013 is mandatory and noncompliance thereof would be fatal to the proceedings. 10. Despite being given an opportunity, the Respondent did not file any Written Submissions. 11. It is necessary to set forth the relevant statutes and regulations applicable to the present case. CBLR 2018 has been notified on 16.05.2018. The SCN in this matter was issued by the Respondent under Regulation 17 (1) of CBLR, 2018 read with CBLR 2013 on 10.08.2018, based on information received by the office of the Commissioner of Customs on 10/18.05.2018. Regulation 17 of CBLR 2018 is pari materia to Regulation 20 of CBLR 2013. 11.1 The procedure for revoking a Custom Broker's Licence or for imposing a penalty is governed by Regulation 17 of CBLR 2018, the relevant extract is set forth below: - "17. Procedure for revoking licence or imposing penalty. - (1) The Principal Commissioner or 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 repo....
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.... date of issue of show cause notice for submission of an Inquiry Report. Sub-regulation (7) of Regulation 17 once again prescribes that within 90 days from the date of the submission of the Inquiry Report and after consideration thereof, the Principal Commissioner/Commissioner shall pass orders either revoking the suspension of licence or revoking the licence of the customs broker. 11.3 Although the said Regulation does not prescribe an overall time limit for an inquiry, Circular No. 09/2010-Customs dated 08.04.2010 issued by the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India inter-alia prescribed time limits for procedures governing the suspension/revocation of CB licences. Para 7.1 of the said circular, inter alia, states that there shall be an overall limit of nine (9) months from the date of receipt of the offence report for the passing of the final order as follows: "7.1. The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by t....
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.....2019 of cancellation of the customs broker licence of the Appellant. 12.3 We would like to state here that the provisions of sub-Regulation (4) of Regulation 17 were given a complete go-by, by not allowing the customs broker any opportunity to cross examine the persons examined in support of the grounds forming the basis of these proceedings. The Inquiry Officer has declined the cross examination of the witnesses by the customs broker on an incorrect understanding of Regulation 17(4) of CBLR 2018. In view of the fact that the Appellant is not pressing this question of law, we do not propose to say anything further in this regard. 13. The issue of timelines under Regulation 17, CBLR 2018, which is pari materia to Regulation 20, CBLR 2013 are no longer res integra. This has been dealt with in a catena of judgments passed by this Court. In the matter titled Overseas Air Cargo Services V. Commissioner of Customs reported as 2016 SCC Online Del 4015, the show cause notice was issued after the lapse of ninety days from the date of receipt of the offence report and the Inquiry Report was submitted more than three years after the show cause notice was issued. While citing a decision....
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....d by the Madras High Court in Sanco Trans Ltd. v. Commissioner of Customs, SeaPort/Imports, Chennai: (2015) 322 E.L.T. 170 (Mad.) and Commissioner v. Eltece Associates 2016 (334) E.L.T. A50 (Mad.)." [Emphasis is ours] It was consequently held that the order revoking the licence of the Appellant to be unsustainable in law. 13.1 In Impex net Logistics v. Commissioner of Customs (General) reported as 2016 SCC OnLine Del 6703, where the show cause notice was issued beyond the period of 90 days from the date of receipt of offence report in contravention of Regulations 20(1) CBLR 2013, a coordinate bench of this Court has held : "6. It is plain that in the case there has been a violation of the time limits set out in regulation 20 of the Customs Brokers Licensing Regulations, 2013 (corresponding to regulation 22 of the Customs House Agents Licensing Regulations, 2004). In the decision dated May 12, 2016 (Indair Carrier P. Ltd. V. Commissioner of Customs, (2016) 40 GSTR 81 (Delhi) this court held (page 84): .... ........ 7. This Court has consistently emphasised the mandatory nature of the aforementioned time limits in several of its decisions. These in....
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....ioner 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.) 38. Ultimately, the Court held that the show cause notice issued beyond the limitation period was not sustainable. 39. Following the said Judgment in M/s. Sowparnika Shipping Services Vs. Commissioner of Customs, Chennai and another, one of us (Rajiv Shakdher, J) allowed yet another writ petition i.e., W.P.No.44344 of 2016, in the matter of M/s. Patriot Freight Logisitics System Vs. Commissioner of Customs, Commissionerate - VIII, Chennai and two others vide Judgment dated 03.02.2017. 40. Also, another learned Judge of this Court (R.Mahadeven, J) in 2016 332 E.L.T. 300 (Mad.) in the matter of Masterstroke Freight Forwarders P. Ltd. Vs. CC (1), Chennai-1 after having considered a number of Judgments, has ultimately, concluded as follows: "50. It is also to be noted that every act of bre....
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....show cause notice, admittedly, was issued only on 18.11.2011, there can be no doubt that the said show cause notice was issued well beyond the period of limitation of 90 days. 45. Whatever be the claim and counter claim on the merits, in this appeal can, in our view, they get shadowed by the failure on the part of the revenue in not acting in time, by issuing the show cause notice, within the period as contemplated under Regulation 22(1) of CHALR, 2004. 46. Therefore, we are of the considered view, and in fact have no hesitation to hold so that, the Revenue has not issued the show cause notice dated 18.11.2011 within the period of limitation prescribed under Regulation 22(1) CHALR, 2004 and thus, the consequent proceedings involving revocations of the appellant's CHA license and forfeiture of its security deposit, is unlawful..." [Emphasis is ours] 13.3 A Coordinate Bench of this Court in Sh. Harjeet Singh Johar V. The Commissioner of Custom reported in 2018 SCC Online Del 6650, while following the earlier decisions passed by this Court has held that the time limits have to be understood as strict time schedules and construed accordingly. It held that:- ....
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....rs] 13.4 It has been similarly held by this Court that orders of the CESTAT are unsustainable in law if the time limit stipulated in the CBLR Regulations has not been complied with. Reliance is placed upon Sunil Dutt V. Commissioner of Customs(General) reported as 2016 SCC Online Del. 6687 and Commissioner of Customs (SeaPort/ Import), Chennai V. Sancos Trans Ltd reported as 2016 (334) E.L.T. 274 (Mad.). 13.5 As stated in para 9.3 above, the Appellant has also placed on record the judgment of the Bombay High Court in Principal Commissioner of Customs V. Unison Clearing Pvt. Ltd. reported in 2018 SCC OnLine Bom 753, wherein while deciding a batch of petitions held that the time limit contained in Regulation 20 of CBLR 2013 is directory and cannot be held to be mandatory. The Court further observed that in a case where strict adherence to the timeline cannot be ensured, the principles of fairness would require that delay must be justified by giving reasons as to why the time limit was not adhered to. 14. It can be seen that the timelines as prescribed under various Regulations in CBLR 2018, have been consistently held by the Courts as mandatory in nature. Each timeline is sa....