9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (1) TMI 1338 - HC - CustomsMaintainability of petition - availability of alternative remedy of appeal to the petitioner under Section 129 A of the Customs Act, 1962 - Revocation of Custom Broker License of the petitioner - forfeiture of entire security deposit - imposing penalty - petitioner was not granted the right to cross-examination of the witnesses whose statements were relied upon - violation of Regulation 10 (d), 10 (m), 10 (n) 10 (q) laid down in CBLR, 2018 - HELD THAT - In the case of Godrej Sara Lee Ltd. Vs. Excise and Taxation Officer-cum-Assessing Authority and Others 2023 (2) TMI 64 - SUPREME COURT , the question for determination before the Apex Court was whether the High Court was justified in declining interference on the ground of availability of an alternative remedy of appeal to the appellant under Section 33 of the VAT Act, which it had not pursued. Regulation 17 of CBLR, 2018 prescribes the procedure for revoking the license or imposing penalty. The time limit (s) prescribed under the CBLR, 2018 is mandatory and not directory and this Court in a plethora of judgment has also repeatedly held so - In terms of regulations 17 (1), a show cause notice is to be issued within 90 days from the date of receipt of the Offence report, while regulation 17 (5) prescribes a time period of 90 days from the date of issue of Show Cause Notice for submission of an Inquiry Report. Regulation 17 (7) 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 license or revocation of license of the Customs Broker. Although, the said regulation does not prescribe an overall time limit for completing the inquiry, Circular No. 09/2010/Customs dated 08.04.2010 issued by the Central Board of Excise and Customs, Department of the Revenue, Ministry of Finance, Govt. of India, inter alia prescribed time limits for procedures governing the suspension/revocation of CB licenses. As per regulation 17 (4) of CBLR, 2018, if the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines the permission to examine any person on the ground that his evidence is not relevant or material, he needs to record the reasons in writing for doing so but the Inquiry Officer assigned no reason what so ever. The Commissioner of Customs ignored the error on the part of the Inquiry Officer to grant an opportunity of cross examination of the exporters and rather observed that the object behind cross examination of the witnesses appeared to be to merely prolong/discredit the investigation and the denial of cross examination by the Inquiry Officer has not impacted the objectivity of the Inquiry. Such an observation is based on incorrect understanding of regulation 17 (4) of CBLR, 2018. Provisions of Regulation 17 (4) were given a complete go-by. Not allowing the Customs broker an opportunity to cross examine the persons examined in support of the grounds forming the basis of these proceedings has resulted in serious prejudice to the petitioner. The Court in Kunal Travels 2017 (3) TMI 1494 - DELHI HIGH COURT held that the obligation of the CHA under Section 13 (e) of the CHALR, 2004 cannot be stretched to it being obliged to undertake a further background check of the client. As such, as a Customs Broker, the petitioner cannot be held liable because exporters were not traceable, after the issuance of Let Export Orders and export of the goods out of the country. The Commissioner of Customs erred in accepting the findings of the Inquiry Officer regards the failure of Customs Broker to comply with the provisions of Regulation 10(d), 10 (m), 10 (n) 10 (q) of the CBLR, 2018 - The impugned order dated 29.06.2022, insofar as, it revokes the CB License of the petitioner and levies penalty upon the petitioner shall stand quashed and set aside. Petition allowed.
Issues Involved:
1. Revocation of Custom Broker License and imposition of penalty. 2. Alleged violations of Customs Broker Licensing Regulation, 2018. 3. Denial of the right to cross-examination. 4. Maintainability of the writ petition despite alternative remedy. 5. Compliance with procedural timelines under CBLR, 2018. Summary: 1. Revocation of Custom Broker License and Imposition of Penalty: The petitioner, a Custom House Agent (CHA), challenged the Order-in-Original dated 29.06.2022, which revoked their Custom Broker License, forfeited the security deposit, and imposed a penalty of Rs. 50,000/-. The petitioner was involved in the clearance of 23 shipping bills of ball-bearings filed by nine exporters, with five exporters found to be non-existent. 2. Alleged Violations of Customs Broker Licensing Regulation, 2018: The petitioner was accused of violating Regulations 10(d), 10(m), 10(n), and 10(q) of the Customs Broker Licensing Regulation, 2018. The Inquiry Officer found the petitioner guilty of these violations, which included failing to verify the genuineness of the exporters and not advising clients to comply with the Customs Act. The Commissioner of Customs agreed with these findings and issued the impugned order. 3. Denial of the Right to Cross-Examination: The petitioner argued that the impugned order violated principles of natural justice as they were denied the right to cross-examine witnesses whose statements were relied upon by the Inquiry Officer. The court recognized the right to cross-examination under Regulation 17(4) of CBLR, 2018, and cited precedents affirming that denial of this right vitiates the adjudication order. The court found that the Inquiry Officer did not provide reasons for denying cross-examination, resulting in serious prejudice to the petitioner. 4. Maintainability of the Writ Petition Despite Alternative Remedy: The respondent contended that the writ petition was not maintainable as the petitioner had not exhausted the remedy of appeal before CESTAT under Regulation 19 of CBLR, 2018. The court, however, noted that the controversy was purely legal and did not involve disputed facts, making the writ petition maintainable despite the availability of an alternative remedy. 5. Compliance with Procedural Timelines under CBLR, 2018: The court examined the procedural timelines under Regulation 17 of CBLR, 2018, and Circular No. 09/2010/Customs dated 08.04.2010. The court found that the timelines for issuing the Show Cause Notice, completing the inquiry, and passing the final order were not adhered to, rendering the proceedings procedurally flawed. Conclusion: The court allowed the writ petition, quashing and setting aside the impugned order dated 29.06.2022, which revoked the Custom Broker License and imposed a penalty on the petitioner. The court held that the Commissioner of Customs erred in accepting the Inquiry Officer's findings and that the denial of the right to cross-examination resulted in serious prejudice to the petitioner.
|
