2015 (10) TMI 273 - AT - Customs

Revocation of License Appellant challenging order passed by Commissioner of Customs revoking licence issued to appellant under Custom Broker Licensing Regulation, 2013 on ground that appellant had aided and abetted in commitment of breach of law using various IECs of others and there were undervaluation of goods imported Held that - No doubt, consequent upon allegation made by DRI as to commitment of offence made by appellant, prohibitory order was issued by Commissioner Despite entire materials were there on record, before Commissioner, he failed to proceed against appellant in terms of Regulation 20 within stipulated time When that Regulation is mandatory and requires public authority to act publicly to pass public order and he fails to do so within time prescribed, recourse to that provision is no more available to him on expiry of period so stipulated Therefore, when mandatory requirement of Regulation was paid scanty regard, appellant is correct to plead that he is entitled to benefit of principles relating to limitation Violation of principles of natural justice by belated action of authority made its order fatal Therefore, appeal allowed Impugned order set aside Decided in favour of Appellant.

Summary

Issues:
Challenge to revocation of license under Custom Broker Licensing Regulation, 2013 (CBLR 2013) based on aiding and abetting in breach of law and undervaluation of imported goods. Compliance with Regulation 20 of CBLR 2013 regarding the timeline for issuing notice. Adherence to principles of natural justice and limitation period in taking action against the appellant.

Analysis:
The appellant appealed against the revocation of their license by the Commissioner of Customs for allegedly aiding and abetting in the breach of law and undervaluation of imported goods. The Commissioner found the appellant guilty of using others' Importer Exporter Code (IEC) in contravention of the law, acting without proper authorization, and failing to exercise due diligence, causing prejudice to customs. However, the inquiring authority had previously found the appellant not guilty of the allegations but held them responsible for improper authorization. The appellant challenged the revocation order, citing a specific timeline under Regulation 20 of CBLR 2013 for taking action after the offense report, as per a judgment by the High Court of Madras in a related case.

The Revenue argued that the revocation was justified due to the appellant's involvement in customs fraud. During the proceedings, both sides presented their arguments, and the records were examined. The Tribunal emphasized the importance of adhering to the prescribed limitation period under the law. It noted that the customs authority failed to act within the specified timeline, as required by Regulation 20 of CBLR 2013, citing the High Court's decision in a previous case.

The record showed that the appellant received a notice under the Customs Act, 1962, but there was no outcome mentioned. Despite responses and filings by the appellant following the offense report and prohibitory order, the Commissioner of Customs failed to proceed within the stipulated time under Regulation 20. The Tribunal highlighted the mandatory nature of the regulation and the public authority's obligation to act promptly. Due to the authority's delay in taking action, the appellant was entitled to the benefit of the limitation principles as per the High Court's judgment.

The Tribunal criticized the belated revocation of the license, which occurred 16 months after the offense report, without issuing a notice within the prescribed timeline. It emphasized that such actions violated natural justice principles and rendered the order fatal. Consequently, the appeal was allowed, setting aside the impugned order based on the High Court's decision and principles of natural justice.