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2017 (10) TMI 621 - HC - CustomsValidity of SCN - revocation of CHA license - time limit for issuance of SCN - Whether the orders for revocation of licence of the appellant is without jurisdiction in that the show cause notice for the same was issued beyond the mandatory time limit of 90 days as fixed by Regulation 20(1) of the CHALR, 2004? - Regulation 22(1) of the CHALR, 2004. Held that - the Court held that the show cause notice issued beyond the limitation period and was not sustainable - reliance placed in the case of Sanco Trans Limited Versus The Commissioner of Customs Sea Port/Imports Customs House 2015 (7) TMI 455 - MADRAS HIGH COURT , where it was held that when the impugned show cause notice has been issued beyond the statutory period, as rightly pointed out by the learned senior counsel for the petitioner that the same cannot be sustained for want of jurisdiction. Once the limitation prescribed is mandatory, as has been declared by the courts of law, it cannot be stated that, because of the other issues, that is the merit of the case, this mandatory requirement of the limitation can be ignored. It is not the case of the 1st respondent that the 90 days limitation contemplated under Regulation 22(1), is directory. It is also not the case of the 1st respondent that the show cause notice was issued within the limitation period of 90 days from the date of offence report - Since the offence report was dated 22.9.2010 and the show cause notice, admittedly, was issued only on 18.11.2011, there can be no doubt that the said show cause notice was issued well beyond the period of limitation of 90 days. The Revenue has not issued the show cause notice dated 18.11.2011 within the period of limitation prescribed under Regulation 22(1) CHALR, 2004 and thus, the consequent proceedings involving revocation of the appellant s CHA licence and forfeiture of its security deposit, is unlawful. Appeal allowed - decided in favor of appellant-assessee.
Issues Involved:
1. Jurisdictional validity of the show cause notice issued beyond the mandatory time limit of 90 days as per Regulation 22(1) of CHALR, 2004. 2. Whether the Tribunal acted in excess of its jurisdiction by confirming the revocation of the appellant's license without evidence of violation. 3. Whether the Tribunal exceeded its jurisdiction by confirming the revocation of the license in the absence of evidence of mis-declaration of goods or any legally required act or omission by the appellant. Issue-wise Detailed Analysis: 1. Jurisdictional Validity of the Show Cause Notice: The primary issue raised by the appellant was the jurisdictional validity of the show cause notice issued beyond the mandatory time limit of 90 days as fixed by Regulation 22(1) of CHALR, 2004. The appellant argued that the Directorate of Revenue Intelligence (DRI) generated the offence report on 21.09.2010, and the show cause notice should have been issued within 90 days, i.e., by 21.12.2010. However, the show cause notice was issued only on 18.11.2011, well beyond the stipulated period. The appellant contended that this delay rendered the entire subsequent proceedings, including the revocation of the CHA license and forfeiture of the security deposit, unlawful. The respondent countered that the appellant did not raise the issue of limitation at the time of issuance of the show cause notice and participated in the inquiry process, thereby waiving the right to contest the delay. The respondent further argued that the appellant's violations of various CHALR regulations were established, justifying the revocation of the license. The court examined several judgments, including those from the Madras High Court and Delhi High Court, which consistently held that the time limits prescribed under CHALR, 2004 are mandatory. The court concluded that the issuance of the show cause notice beyond the 90-day period was indeed fatal to the proceedings. Therefore, the revocation of the appellant's license and forfeiture of the security deposit were deemed unlawful. 2. Tribunal's Jurisdiction and Evidence of Violation: The appellant argued that the Tribunal acted in excess of its jurisdiction by confirming the revocation of the license without any evidence of violation of CHALR provisions. The appellant maintained that there was no substantial proof of mis-declaration of goods or any act or omission that warranted the revocation of the license. The respondent asserted that the appellant violated several regulations under CHALR, 2004, including obtaining endorsements from two different Deputy Commissioners for the same consignment, which indicated procedural lapses and potential malpractices. The Tribunal, in its judgment, found that the appellant's actions, such as preparing another set of documents and obtaining fraudulent examination reports, clearly indicated involvement and violation of CHALR regulations. The court, however, did not delve into the merits of these contentions, as the jurisdictional issue regarding the timeliness of the show cause notice was sufficient to decide the appeal in favor of the appellant. 3. Evidence of Mis-declaration and Legal Acts or Omissions: The appellant contended that there was no evidence of mis-declaration of goods or any legally required act or omission that justified the revocation of the license. The appellant provided explanations for the procedural lapses, attributing them to human error and lack of malafide intent. The respondent maintained that the appellant's actions, such as obtaining endorsements from different Deputy Commissioners and failing to verify documents from the importer, constituted significant violations of CHALR regulations. The Tribunal upheld these findings, concluding that the appellant's involvement in the procedural irregularities was evident. Again, the court did not address these merits due to the overriding issue of the untimely show cause notice, which invalidated the entire proceedings. Conclusion: The court held that the show cause notice issued beyond the mandatory 90-day period was unlawful, rendering the subsequent revocation of the appellant's CHA license and forfeiture of the security deposit invalid. The appeal was allowed, and the impugned order of the Tribunal was set aside. The court emphasized the mandatory nature of the time limits prescribed under CHALR, 2004, and ruled in favor of the appellant on this jurisdictional ground.
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