2017 (2) TMI 1056 - HC - Customs

Jurisdiction of Commissioner of Customs (Imports) to issue SCN - time limitation - the petitoner has approached the court at its own leisure, whether the delay on the part of petitioner can be condoned?- Held that - the mere fact that the petitioner approached this Court not too early in the point of time would not disentitle him from claiming reliefs sought in the instant writ petitions - More so, as the petitioner, was at liberty to challenge either the issuance of SCN or, wait till the time a final order was passed. The final order of revocation was passed on 09.02.2015. Insofar as the delay between the date when the revocation order was passed and the writ petitions were presented, the delay has been sought to be explained by the petitioner by taking the stand that the matter was being handled by his Manager who had left his services and therefore, the petitioner was unable to approach the Court with due expedition. This stand is supported by an affidavit which has not been rebutted by the respondent - the stand of the petitioner will have to be accepted, qua, the delay - SCN quashed - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Challenge to show cause notice dated 15.12.2011 under Regulation 22 of Customs House Agents Licence Regulations, 2004.
2. Challenge to the order dated 09.02.2015 revoking the petitioner's licence and forfeiting the security deposit.

Analysis:
1. The petitioner was granted a Customs House Agents (CHA) Licence by the Commissioner of Customs. Two importers used the petitioner's services for importing goods, but the declaration made in the Bills of Entries was incorrect. An investigation was initiated, leading to a show cause notice under Section 124 of the Customs Act, 1962, and a subsequent notice under Regulation 22 of the 2004 Regulations. The petitioner failed to reply to these notices and did not attend several hearings, leading to the revocation of the licence and forfeiture of the security deposit.

2. The petitioner challenged the show cause notice and revocation order on the grounds that the time frame provided in Regulation 22 had expired when the notice was issued. The petitioner cited relevant judgments to support this argument. The respondents argued for dismissal based on delay and latches, highlighting the long gap between the issuance of the notices and the filing of the petitions. However, the Court found that the 90-day period for issuing the show cause notice was mandatory, as established in previous judgments, and the lack of a timely response from the petitioner was explained by the departure of the manager handling the matter. The Court quashed the show cause notice and revocation order, ruling in favor of the petitioner based on the legal precedents and the explanation provided for the delay in approaching the Court.

3. The Court referenced various judgments, including those of a learned single Judge and a Division Bench of the Delhi High Court, to support the mandatory nature of the 90-day period for issuing show cause notices in cases involving Customs Brokers Licences. The Court emphasized the importance of following prescribed time limits to ensure swift action against Customs Brokers and maintain accountability. The lack of a specific definition of "offence report" in the Regulations led to a discussion on when the prescribed period should commence, with the Court ultimately upholding the significance of the 90-day timeline. The consistent view of Courts on this issue guided the Court's decision to quash the show cause notice and revocation order in this case.

4. In conclusion, the Court allowed the writ petitions, quashed the show cause notice and revocation order, and closed the connected pending applications. The Court acknowledged the petitioner's explanation for the delay in approaching the Court, accepted it as valid, and made no order as to costs in the matter.