2016 (7) TMI 1521 - AT - Customs

Suspension of CHA License - regulation 20(2) of the Customs House Agents Licensing Regulations 2004 - suspension on the ground of failure to obtain authorisation from importer failure to advise the importer to comply with the provisions of the Customs Act 1962 and failure to verify the antecedents of importer the last was not proved but the other two were - HELD THAT - The proceedings were initiated under the erstwhile Customs House Agents Licensing Regulations 2004 and completed under Customs Brokers Licensing Regulations 2013; both these Regulations prescribe a schedule for completion of the proceedings and for each intermediate stage. The inquiry report is to be submitted within six months of receipt of offence report and decision on revocation passed within another three months thereafter. We find that thirty months have elapsed between the incident and submission of report of inquiry officer. There is no evidence of contributory negligence on the part of the appellant in this delay. The revocation order was itself passed more than seven months after submission of the inquiry report. Besides the delay on the part of the Commissioner there has been an inordinate and unexplained delay in the entire proceedings from the beginning to the end. The relationship between the customs broker and licensing authority is a statutory one. While the authority is not employer of the brokers the brokers themselves are dependent upon the licence for their livelihood as well as that of their dependents and their employees. Considering the relationship though certainly not one of master-servant revocation of a licence has as grave consequences as that of dismissal of an employee in an organisation. Accordingly the sanctity of procedure and adherence to principles of natural justice can be no less rigorous than that prescribed for disciplinary proceedings. The Regulations prescribe strict adherence to time-lines and in the event of non-compliance the proceedings stand vitiated - the restoration of licence of the appellant is directed with immediate effect.

Summary

Issues:
Alleged contravention of Customs House Agents Licensing Regulations, 2004; Suspension and subsequent revocation of license; Delay in completion of proceedings; Interpretation of regulations regarding time limits; Adherence to principles of natural justice in revocation of license.

Detailed Analysis:

1. Alleged Contravention of Regulations:
The case involved M/s. Vee Vee Gearing and Forwarding Pvt. Ltd. being proceeded against for contravention of Customs House Agents Licensing Regulations, 2004 while handling imports. The charges included failure to obtain authorization from importer, failure to advise compliance with Customs Act, and failure to verify importer antecedents. The inquiry officer found two charges proven, leading to suspension and subsequent revocation of the license under the new Customs Brokers Licensing Regulations, 2013.

2. Suspension and Revocation of License:
The appellant argued that the mis-declaration incident was a one-time occurrence, emphasizing lack of privy to container contents until examination. The proceedings initiated under the old regulations were completed under the new regulations. The Tribunal noted a significant delay of over thirty months in the proceedings, with the revocation order itself taking more than seven months after the inquiry report submission.

3. Interpretation of Time Limits in Regulations:
The Tribunal referred to legal precedents emphasizing strict adherence to time limits in initiating and completing proceedings against customs brokers. Failure to comply with the prescribed timelines could render the revocation order invalid. The court highlighted the necessity of timely action against brokers to ensure accountability and efficient enforcement of regulations.

4. Adherence to Principles of Natural Justice:
The relationship between customs brokers and licensing authorities was deemed statutory, with the revocation of a license carrying severe consequences akin to dismissal in an organization. Therefore, procedural sanctity and adherence to natural justice principles were considered crucial in such cases, requiring rigorous compliance with disciplinary proceedings standards.

5. Judicial Precedents and Decision:
Citing various judicial decisions, the Tribunal concluded that any delay in intermediate steps such as issuing notices or passing revocation orders beyond the prescribed periods would invalidate the final revocation order. Therefore, the impugned revocation order was set aside, and the restoration of the appellant's license was directed with immediate effect.

In conclusion, the judgment highlighted the importance of procedural compliance, adherence to time limits, and principles of natural justice in cases involving the suspension and revocation of licenses of customs brokers. The decision underscored the need for accountability, efficiency, and fairness in regulatory enforcement within the customs brokerage industry.