2019 (4) TMI 1713 - HC - Customs

Revocation of CHA License - forfeiture of security deposit - time limitation - specific case made out by the writ petitioner is that the notice issued in the present case dated 13.08.2018 under Regulation 20 is beyond the period of ninety days as stipulated statutorily and is liable to be quashed - HELD THAT - The issue as to whether the 90 day time limit for issuance of notice for revocation of licence under Regulation 20 (1) is mandatory or directory is no longer res integra. There are a series of decisions of the courts that have decided the same holding it to be mandatory. The revenue does not dispute this position either. However, learned counsel urges that in the facts of this case, the period be computed excluding the period when the order of suspension passed under Regulation 19 was stayed by this court. The period when the interim order was in force, 24.08.2017 to 27.07.2018, to be excluded from the period of 90 days from date of receipt of offence report for issuence of notice under Regulation 20(1). The impugned notice has been issued on 13.08.2018 - In the present case, though there was an order of stay passed on 24.04.2018 by this court, there was nothing that prevented the respondent from issuing the show cause notice under Regulation 20 (i) of the CBLR, 2013, within the period of 90 days since the aforementioned period commences from the date of offence report, which, in this case, is 27.02.2018. The Regulation stipulates a seamless procedure commencing from the date of offence report and there is nothing in the regulation that indicates distortion of this time frame by intervening events. Where a provision/regulation spells out a specific period of limitation, such period is mandatory and any exclusion there from should also be provided for specifically. Petition allowed.

Summary

Issues Involved:
1. Legality of the suspension of the Customs Broker's license under Regulation 19(1) of the Customs Broker License Regulations (CBLR), 2013.
2. Compliance with the 90-day timeline for issuing a notice under Regulation 20(1) of the CBLR, 2013.
3. Validity of the show cause notice issued beyond the stipulated period.

Detailed Analysis:

1. Legality of the Suspension of the Customs Broker's License:
The petitioner, a licensed Customs Broker, faced suspension of their license under Regulation 19(1) of the CBLR, 2013, due to discrepancies in a shipping bill related to the export of finished leather. The authorities found inconsistencies in the number of packages declared and the actual contents, leading to an immediate suspension of the license on 14.03.2018. The petitioner was given an opportunity to be heard as per Regulation 19(2), and the suspension was continued through an order dated 06.04.2018. The petitioner challenged this suspension in W.P.No.9395 of 2018, but the court dismissed the petition, stating that the invocation of power under Regulation 19(1) was appropriate given the circumstances.

2. Compliance with the 90-Day Timeline for Issuing a Notice:
Regulation 20(1) mandates that a notice must be issued within 90 days from the receipt of the offence report, outlining the grounds for revocation of the license or imposition of a penalty. The petitioner argued that the notice dated 13.08.2018 was beyond the 90-day period from the offence report dated 27.02.2018, thus making it invalid. The petitioner relied on several judicial precedents that established the mandatory nature of this timeline.

3. Validity of the Show Cause Notice Issued Beyond the Stipulated Period:
The respondent contended that the period during which the suspension order was stayed by the court should be excluded from the 90-day computation. The court examined the sequence of events and noted that the interim stay was granted on 24.04.2018 and remained in effect until the final order on 09.07.2018. The court concluded that the exclusion of this period is not provided for under Regulation 20(1). The court referenced multiple cases, including Masterstroke Freight Forwarders Pvt. Ltd. and MKS Shipping Agencies, which affirmed the mandatory nature of the 90-day timeline.

Conclusion:
The court held that the 90-day period for issuing a notice under Regulation 20(1) is mandatory and cannot be extended by excluding the period of the interim stay. The impugned notice issued on 13.08.2018 was beyond the statutory period and thus invalid. Consequently, the writ petition was allowed, and the impugned order was set aside. The court emphasized that any deviation from the prescribed timeline must be explicitly provided for within the regulation itself.