2016 (2) TMI 10 - AT - Customs

Revocation of Custom Broker License - forfeiture of bank guarantee - period of limitation of 90 days - Held that - the Show Cause Notice under Regulation 20(1) has been issued on 17.6.2014 which is admittedly beyond a period of 90 days prescribed under Regulation 20(1) of the Customs Broker CBLR. 2013. - proceedings against the appellant are not sustainable being time-barred - proceeding initiated against the appellant under CBLR, 2013 set aside - Decided in favor of appellant.

Summary

Issues:
Revocation of Custom Broker License under Custom Broker Licensing Regulation, 2013 based on violation of regulations and forfeiture of bank guarantee.

Analysis:
The appellant, a Custom House Broker, appealed against the revocation of their Custom Broker License and forfeiture of the bank guarantee by the Commissioner of Customs (General), New Delhi. The initial suspension of the license was due to the appellant's failure to supervise employees properly, leading to misconduct. Subsequently, proceedings were initiated under Regulation 20, culminating in the revocation of the license based on alleged involvement in undervaluation of imported goods. The appellant contested the revocation citing procedural violations, specifically the delay in issuing the Show Cause Notice beyond the prescribed time limit. The appellant relied on precedents such as the case of M/s Surpass Freight Forwarders and the decision of the Hon'ble High Court of Madras in CC Vs. AM. Ahmed & Co. to support their argument.

The Commissioner of Customs contended that the appellant had indeed violated the regulations, justifying the revocation of the license and the subsequent proceedings. The Tribunal examined Regulation 20 of the Custom Broker Licensing Regulation, 2013, which outlines the procedure for revoking a license or imposing penalties. The regulation mandates the issuance of a notice within 90 days of receiving an offense report, specifying the grounds for revocation and allowing the broker to defend themselves. The Tribunal noted that in this case, the Show Cause Notice was issued beyond the prescribed 90-day period, rendering the proceedings time-barred. Citing the case of M/s Surpass Freight Forwarders, the Tribunal held that adherence to the statutory time limit is crucial, and failure to do so invalidates the proceedings.

The Tribunal referenced the judgment of the Hon'ble High Court of Madras in CC Vs. A.M. Ahmed & Co., which emphasized the importance of timely issuance of notices under Regulation 20. As the Commissioner of Customs failed to comply with the prescribed time limit, the Tribunal set aside the proceedings initiated against the appellant under the Custom Broker Licensing Regulation, 2013. Consequently, the order revoking the Custom Broker License and forfeiting the security deposit was overturned, making the license operational with immediate effect. The Tribunal's decision was guided by the principles of natural justice and adherence to statutory timelines, as highlighted in relevant legal precedents.