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2018 (8) TMI 1526 - AT - CustomsInterpretation of Statute - Offence report - Revocation of CHA License - Forfeiture of Security deposit - stay of the operation of the impugned order as per Rule 41 read with Rule 28C of the CESTAT(Procedure) Rules, 1982 - Time Limitation. Held that - By letter dt. 26/10/2016, the Tuticorin Customs Commissionerate intimated the Cochin Customs Commissionerate and the Order-in-Original was also sent to the Cochin Customs Commissionerate along with this letter and it was requested by Tuticorin Customs to the Cochin Customs to take action under CBLR 2013 against the appellant. This Order-in-Original and the letter dt. 26/10/2016 can be considered as offence report because the Order-in-Original is very clear regarding the alleged offence committed by the appellant. The date of knowledge gained by the Commissioner by himself of any communication be it a show-cause notice or the Order-in-Original or a letter narrating the offence committed has to be construed as an offence report and the date of receipt by the Cochin Commissionerate has to be taken as the date of offence report. Time Limitation - Held that - The show-cause notice proposing to revoke the licence was issued on 01/06/2017 which is beyond the period of 90 days time limit prescribed by the CBLR - In the case of Ambika Enterprises, 2016 (6) TMI 265 - CESTAT NEW DELHI , the Division Bench of this Tribunal considered an identical issue and held that show-cause notice issued beyond 90 days is not sustainable in law being violative of the Regulations. Further, the enquiry report which as per the Regulation should be submitted within 90 days from the date of issuance of such show-cause notice has also been not adhered to in the present case. The enquiry report forwarded on 15/09/2017 but the said report is not dated. The enquiry report was served on 26/09/2017 which is also beyond 90 days prescribed under the Regulations. Order of revocation of CHA License set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Revocation of Customs Broker License and forfeiture of security deposit under CBLR 2013. 2. Allegation of smuggling and misuse of IE Code and AD Code. 3. Time limitation for issuing show-cause notice under Regulation 20(1) of CBLR 2013. 4. Due diligence and verification responsibilities of the Customs Broker. 5. Liability of the Customs Broker for the actions of its employee. Issue-wise Detailed Analysis: 1. Revocation of Customs Broker License and Forfeiture of Security Deposit under CBLR 2013: The appeal challenges the order dated 28/11/2017 by the Commissioner of Customs, Cochin, which revoked the Customs Broker (CB) license of the appellant and ordered the forfeiture of the security deposit. The revocation was based on the alleged failure of the CB to exercise due diligence and verify the authenticity of documents submitted by their employee, as required under CBLR 2013. 2. Allegation of Smuggling and Misuse of IE Code and AD Code: The proceedings were initiated based on a complaint from the Commissioner of Customs, Tuticorin, alleging that the appellant attempted to smuggle Red Sanders by filing Shipping Bills using the IE Code and AD Code of M/s. Scott Garments, Bangalore. The appellant's employee, Shri J.J. Ebanesar, filed the shipping bill and cleared the cargo, leading to the issuance of a show-cause notice alleging failure to exercise due diligence. 3. Time Limitation for Issuing Show-Cause Notice under Regulation 20(1) of CBLR 2013: The appellant argued that the show-cause notice was issued beyond the 90-day period prescribed by Regulation 20(1) of CBLR 2013. The relevant Regulation mandates that the Commissioner of Customs must issue a notice within 90 days from the date of receipt of an offence report. The appellant contended that the offence report was received on 03/11/2016, and the show-cause notice issued on 01/06/2017 was beyond the statutory period, making the notice time-barred and invalid. 4. Due Diligence and Verification Responsibilities of the Customs Broker: The appellant argued that they had collected the KYC documents of the exporter but had not physically verified the details by directly contacting the exporter. The appellant contended that they should not be held responsible for the misconduct of their employee, which was beyond the scope of his employment. The appellant cited several judicial precedents to support their argument that the failure to adhere to the time limits prescribed under Regulation 20 is fatal to the proceedings under CBLR. 5. Liability of the Customs Broker for the Actions of its Employee: The appellant asserted that the misconduct of their employee, Shri J.J. Ebanesar, was outside the scope of his employment, and therefore, the appellant should not be held liable for his actions. The appellant relied on various judicial decisions to argue that the revocation of the license and forfeiture of the security deposit were unjustified and should be set aside. Analysis and Findings: The Tribunal considered the submissions of both parties and examined the relevant regulations and judicial precedents. It was noted that the time limits prescribed under CBLR 2013 are mandatory and must be strictly followed. The Tribunal found that the letter dated 26/10/2016 from the Tuticorin Commissionerate, along with the Order-in-Original, constituted the offence report, and the show-cause notice issued on 01/06/2017 was beyond the 90-day period prescribed by Regulation 20(1). The Tribunal also observed that the enquiry report, which should be submitted within 90 days from the issuance of the show-cause notice, was not dated and was served beyond the prescribed period. The Tribunal concluded that the Department had not adhered to the mandatory time limits, rendering the proceedings invalid. Conclusion: The Tribunal set aside the order of revocation of the CB license and forfeiture of the security deposit, solely on the ground of non-compliance with the mandatory time limits prescribed under CBLR 2013, without delving into the merits of the case. The appellant's appeal was allowed, and the stay application was disposed of accordingly.
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