2017 (5) TMI 800 - AT - Customs

Revocation of CHA licence - forfeiture of security deposit - illicit export of red sanders - time limit to complete inquiry proceedings - Held that - the inordinate delay in completing the inquiry proceedings has vitiated the detriment visited upon the appellant. Accordingly, the revocation of the license and forfeiture of the security deposit is held to be violative of the Regulations - Revocation of licence and forfeiture of security amount withheld - appeal allowed - decided in favor of appellant-CHA.

Summary

Issues:
1. Inordinate delay in completion of revocation process of customs broker license.
2. Compliance with time-frame stipulated in Customs House Agents' Licensing Regulations, 2004.
3. Impact of delay on disciplining errant customs broker.
4. Legality and sanctity of proceedings based on adherence to timelines.
5. Precedent set by Maa Krupa Forwarders Pvt Ltd v. Commissioner of Customs.

Analysis:

The appeal before the Appellate Tribunal CESTAT MUMBAI concerned the revocation of a customs broker license due to alleged involvement in illicit activities. The main issue raised was the inordinate delay in completing the revocation process, contrary to the prescribed time-frame in the Customs House Agents' Licensing Regulations, 2004. The licensing authority had ordered the revocation of the license after a significant delay of 2072 days from the initiation of proceedings, well beyond the stipulated 270 days. Despite the suspension of the license and the timely submission of the inquiry report, delays in issuing the charge sheet and completing the inquiry process were highlighted by the appellant.

The Tribunal considered the argument that the time-frame in the Regulations is directory, not mandatory, and that delays due to peculiar circumstances should not hinder disciplinary action against the customs broker. However, it emphasized that adherence to the prescribed timelines is crucial for the legality and sanctity of proceedings. While acknowledging the prompt revocation after receiving the inquiry report, the Tribunal deemed the delays in issuing the charge sheet and conducting the inquiry as unacceptable, emphasizing the importance of timely compliance with procedural requirements.

Referring to a previous decision in Maa Krupa Forwarders Pvt Ltd v. Commissioner of Customs, the Tribunal held that the inordinate delay in completing the inquiry proceedings had tainted the actions taken against the appellant. Consequently, the revocation of the license and forfeiture of the security deposit were deemed violative of the Regulations, leading to the setting aside of the impugned order. It was clarified that the Tribunal did not assess the propriety or proportionality of the penalties imposed by the licensing authority in this case.

In conclusion, the appeal was allowed by the Tribunal, highlighting the significance of adhering to prescribed timelines in regulatory procedures and ensuring procedural fairness in disciplinary actions against customs brokers.