2019 (5) TMI 490 - AT - Customs

Suspension of CHA License - correctness of continuing of the order of suspension despite the long drawn investigation having failed to crystallise the memo of charges against the appellant herein - time limitation - HELD THAT - In THE PRINCIPAL COMMISSIONER OF CUSTOMS (GENERAL) MUMBAI VERSUS UNISON CLEARING PVT. LTD., AND OTHERS. 2018 (4) TMI 1053 - BOMBAY HIGH COURT , the Hon'ble High Court of Bombay had disapproved of the setting aside of the detriment imposed in accordance with Customs Brokers Licensing Regulation, 2018 merely on failing the test of adherence to the time-line. While acknowledging the prescriptions as statutorily binding, the Hon'ble High Court held that the time-line and adherence thereof needed further test against the facts and circumstances of each case and the reasons for delay should also be considered to appreciate and assign the responsibility as well as consequences thereof. The relationship of a custom broker with a licensing authority is one of near employment as a facility for smooth clearance of cargo on behalf of importers/exporters who may be at other locations. Unlike tax disputes, the consequence of detriment under the Licensing Regulations has a bearing on the lives of the brokers as well as their dependents. There can be no doubt that suspension for long periods of time or disproportionate penalties impact these persons. It is in acknowledgement of the criticality of expeditious action that the Regulations contemplate prescription of timeline, without which an atmosphere of lack of accountability would pervade the entire exercise. All that is available on record is that the investigation in a major fraudulent activity is still under way. It is not the case of the respondent- Commissioner that any act on the part of the appellant has delayed the initiation of proceedings. The explanation that investigation is pending is also not readily acceptable. It would appear that either the evidence required to sustain the proceedings is not available or that the role of the customs broker may not have been so critical in the transaction to fraudulently claim the drawback. Either way, the continuation of suspension in such circumstances does not, in our opinion, appear to be in concord with the principles of accountability or of prompt response. There is no evidence of any lack of cooperation on the part of appellant herein. The cause of justice cannot be further enabled except by an immediate revocation of the suspension and reinstatement of the licence - Appeal allowed.

Summary

Issues:
Appeal against suspension of custom broker license under Custom House Agent Licensing Regulations, 1984; Non-adherence to time limits prescribed in Customs Brokers Licensing Regulation, 2018; Justification for continuation of suspension despite investigation delays; Interpretation of time limits as mandatory or directory; Impact of suspension on brokers and dependents; Delay in confirmation of suspension and commencement of proceedings under regulation 19 of Customs Broker Licensing Regulation, 2018.

Analysis:
1. Appeal against Suspension of Custom Broker License: The appeal was made by M/s. Sai Dutta Shipping Agency Pvt Ltd against the suspension of their custom broker license, which was issued under the Custom House Agent Licensing Regulations, 1984. The suspension was based on alleged irregularities in exports under claim for drawback, identified by the Directorate of Revenue Intelligence. The suspension order was confirmed after a post-decisional hearing.

2. Non-Adherence to Time Limits: The appellant's counsel argued that the time limits set in the Customs Brokers Licensing Regulation, 2018 were not followed as per the circular by the Central Board of Excise & Customs. The delay in initiating revocation proceedings or any other action was highlighted as a breach of instructions mandating adherence to time limits.

3. Justification for Continuation of Suspension: The Authorized Representative justified the continuation of the suspension citing a letter from the Commissioner of Customs explaining the need for ongoing investigation to establish the appellant's role. Reference was made to a decision by the Hon'ble High Court of Bombay regarding the interpretation of time limits in regulations.

4. Interpretation of Time Limits: The Tribunal analyzed the correctness of continuing the suspension despite the investigation failing to crystallize charges against the appellant. The Tribunal found the justification for non-adherence to time limits insufficient, emphasizing the need to consider reasons for delays and the impact on both parties involved.

5. Impact of Suspension on Brokers: The relationship between custom brokers and the licensing authority was described as one of 'near employment,' emphasizing the criticality of expeditious action due to the consequences of suspension on brokers and their dependents. The need for accountability and adherence to timelines was stressed to avoid a lack of accountability in the process.

6. Delay in Confirmation and Commencement of Proceedings: The Tribunal noted a significant delay between the original suspension order and its confirmation, with uncertainty about the initiation of proceedings under regulation 19 of Customs Broker Licensing Regulation, 2018. Lack of evidence or critical role of the broker in fraudulent activities raised doubts about the continuation of suspension without prompt response or accountability.

7. Conclusion: Considering the circumstances, the Tribunal found no evidence of lack of cooperation from the appellant and decided to immediately revoke the suspension and reinstate the license. This decision aimed to uphold principles of justice and accountability while allowing for other permissible proceedings under the Customs Brokers Licensing Regulation, 2018 to continue.