2016 (4) TMI 1020 - AT - Customs

Cancellation of CHA licence - Export of Inorganic Chemical through Pipavav Port - On examination, goods found to be Muriate of Potash (MOP) instead of Cobalt Sulphate as declared in the shipping bills. Held that - the various statutory time limits prescribed have not been followed in the proceedings, which resulted in the cancellation of the licence. We find that the licensing authority was informed of the offence vide order received on 31.05.2011. The licence was suspended on 17.06.2011 which was confirmed on 26.07.2011. A show cause notice was issued on 11.10.2012. Such notice has been issued after more than 16 months of offence report, that too after the intervention of the Tribunal. Even after issue of such show cause notice, the inquiry report was not submitted within 90 days as required by the provisions of Regulation 22(5) of CHALR 2004- Regulation 20(5) of CBLR 2013. Even the impugned order dated 27.06.2013 was issued to the appellant on 3.7.2013 -beyond the period of 90 days of submission of inquiry report. We find that the Tribunal as well as Hon ble High Courts held that the time limit prescribed under the CHALR/CBLR are to be strictly adhered to. Delay in proceedings, in any stage, will have a bearing on the legality of the proceedings. In Sanco Trans Ltd. 2015 (7) TMI 455 - MADRAS HIGH COURT , the Hon ble Madras High Court held that the show cause notice should be issued within the period stipulated under the Regulations. Notice issued beyond the time limit cannot be sustained for want of jurisdiction. Similar views were expressed by the Tribunal in Eltece Associates 2014 (11) TMI 695 - CESTAT CHENNAI . In S.K. Logistics - 2015 (11) TMI 1155 - CESTAT NEW DELHI , it was held that the time limits prescribed for submission of inquiry report are to be followed. In view of the above the order of cancellation of licence issued without following the prescribed time limits cannot be legally sustained, accordingly, set aside. - Decided in favour of appellant

Summary

Issues:
- Appeal against the order cancelling the appellant's license as a Customs House Agent.
- Preliminary objection regarding the legality of the impugned order based on time limits prescribed under CHALR 2004/CBLR 2013.

Analysis:
1. The appeal challenged the order cancelling the appellant's license as a Customs House Agent due to discrepancies in cargo clearance. The appellant was accused of various violations, including subletting their license, failing to advise clients on compliance with the Customs Act, and lacking diligence in verifying information and client identities. The proceedings began with the suspension of the license on 17.06.2011, confirmed on 26.07.2011, followed by a show cause notice on 11.10.2012, leading to the impugned order on 27.06.2013.

2. The appellant raised a preliminary objection regarding the legality of the impugned order, arguing that the proceedings violated time limits set by CHALR 2004/CBLR 2013. The appellant contended that non-adherence to the regulatory time schedule rendered the proceedings without legal jurisdiction and requested the order to be set aside solely on this ground.

3. The appellant's objection was opposed by the respondent, who argued that the show cause notice was issued in compliance with the Tribunal's Final Order and highlighted the violations outlined in the impugned order. The respondent maintained that the appeal lacked merit due to the clear breaches of regulations by the appellant.

4. After hearing both parties and reviewing the appeal records, the Tribunal considered the appellant's argument regarding the statutory time limits. It was noted that significant delays occurred in various stages of the proceedings, such as the issuance of the show cause notice and submission of the inquiry report, exceeding the prescribed time limits under CHALR 2004 and CBLR 2013.

5. Citing legal precedents, including cases such as Sanco Trans Ltd., Eltece Associates, and S.K. Logistics, the Tribunal emphasized the importance of strict adherence to time limits prescribed under CHALR/CBLR. The Tribunal concluded that the order cancelling the license, issued without following the mandated time limits, could not be legally sustained. Consequently, the impugned order was set aside, and the appeal was allowed, with the miscellaneous petition also being disposed of.