2012 (10) TMI 196 - AT - Customs

Appeal against continuation of suspension of CHA license pending enquiry under Regulation 22 of CHALR, 2004 - assessee contended that prescribed time limit under Regulation 20(2) of CHALR, 2004 has not been followed - whether the timeframe prescribed under Regulation 20 is to be followed strictly or is to be interpreted liberally - whether the timeframe work as prescribed under the guidelines issued by CBEC through Circular No. 09/2010 dated 08.04.2010 are to be followed strictly by the Licensing authority or not - Held that - In present case, investigation started in the month of December,2010, statement of the appellant recorded in June, 2011, Inquiry Report received in the month of April 2012 and licence has been suspended on 23.05.2012, vide order dated 18.06.2012. Since, vide order dated 23.5.2012. the licence was suspended by the Commissioner of Customs and also afforded an opportunity of post decisional hearing and thereafter order dated 18.6.2012 was passed. In these circumstances, the order dated 23.5.2012 is merged with order dated 18.6.2012 which is under challenge. Hence it cannot be said that the appellants are required to file separate appeal against the order passed by licensing authority dated 23.5.2012. The question is answered accordingly. As per provisions of the Regulation 20(2) of CHALR, 2004 the suspension order is to be passed within 15 days from the date of receipt of the report of investigating agency. From the records, it is found that report of the investigating agency was received on 25.4.2012 and the proposal to suspend the licence was put up before the Commissioner of Customs and the proposal was approved on 10.5.2012. From the record, further, it is found that draft suspension order in respect of the CHA is prepared and it was put to the Deputy Commissioner on 18.5.2012 and thereafter put to the Additional Commissioner on 21.5.2012 and ultimately signed by the Commissioner of Customs on 23.5.2012. Since order suspending the licence is only passed on 23.5.2012, hence no merit found in the contention of the Revenue that the order of suspension was passed on 10.5.2012 i.e. 15 days after receipt of the report of the Investigating Agency, and it is passed in violation of the provisions of Regulation 20 (2) of the CHALR, 2004 - Decided against Revenue

Issues Involved:
1. Whether the timeframe prescribed under Regulation 20 of CHALR, 2004 is to be followed strictly or interpreted liberally.
2. Whether the guidelines issued by CBEC through Circular No. 09/2010 dated 08.04.2010 are to be followed strictly by the Licensing authority.
3. Whether the appellants are required to file a separate appeal against the order passed by the Licensing authority on 23.05.2012.
4. Whether the Member (Judicial) or Member (Technical) is correct in their interpretation of the relevant case laws and regulations.

Issue-wise Detailed Analysis:

1. Strict vs. Liberal Interpretation of Regulation 20:
The Member (Judicial) held that the timeframe prescribed under Regulation 20(2) of CHALR, 2004 must be followed strictly. The regulation mandates that if immediate action is necessary, the Commissioner of Customs must suspend the licence within fifteen days from the date of receipt of a report from the investigating authority. The Member (Judicial) emphasized that the legislative intent and the guidelines provided by CBEC Circular No. 09/2010 dated 08.04.2010 clearly prescribe this time limit, and any deviation from it is not permissible. The Member (Technical), however, argued for a more liberal interpretation, suggesting that the delay in issuing the suspension order could be condoned based on the peculiar facts of the case, such as delays in putting up the file to the Commissioner or dispatching the order.

2. Guidelines by CBEC:
The Member (Judicial) asserted that the guidelines issued by CBEC through Circular No. 09/2010 dated 08.04.2010 are to be followed strictly. These guidelines stipulate that the investigating authority must furnish its report within thirty days of detecting an offence, and the Licensing authority must take necessary suspension action within fifteen days of receiving the report. The Member (Judicial) noted that in this case, the investigation report was received in April 2012, and the suspension order was issued on 23.05.2012, beyond the prescribed timeframe. The Member (Technical) did not explicitly address the strict adherence to these guidelines but implied that procedural delays could justify a more lenient interpretation.

3. Requirement for Separate Appeal:
The Member (Technical) argued that the appellant should have filed a separate appeal against the suspension order dated 23.05.2012. However, the Member (Judicial) disagreed, stating that the suspension order dated 23.05.2012 merged with the subsequent order dated 18.06.2012, which continued the suspension pending inquiry. Therefore, the appeal against the latter order suffices to challenge the suspension.

4. Interpretation of Relevant Case Laws and Regulations:
The Member (Judicial) relied on several case laws, including Om Freight Forwarders Pvt Ltd., Sunil Bhatia, and Kamal Sehgal, to support the strict interpretation of Regulation 20(2) and the necessity of adhering to the prescribed timeframes. These cases emphasized that any delay in issuing suspension orders beyond the stipulated period renders the action invalid. The Member (Technical), on the other hand, cited cases like Worldwide Cargo Movers and OTA Kandla Pvt. Ltd., which suggested that the Tribunal should not interfere with the decisions of the Commissioner of Customs in disciplinary matters unless the actions are shockingly disproportionate or mala fide.

Conclusion:
The third Member, S.S. Kang, agreed with the Member (Judicial), holding that the impugned order was not sustainable as it was issued beyond the prescribed timeframe under Regulation 20(2) of CHALR, 2004. The third Member emphasized that the order suspending the licence was only passed on 23.05.2012, which exceeded the fifteen-day limit from the receipt of the investigation report on 25.04.2012. Consequently, the appeal was allowed, and the suspension of the CHA licence was revoked with immediate effect.

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