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2021 (9) TMI 768 - AT - CustomsRevocation of the CHA license - time limitation - case of appellant is that though the exports have taken place in 2003, SCN proposing to revoke the license has been issued in 2006 under Regulation 22 of CHALR, 2004 - Availment of ineligible drawback - HELD THAT - It is clear that for the acts or omissions which are done before the CHALR, 2004 came into force vide Notification No. 21/2004-Cus. (NT) dated 23.2.2004 , the erstwhile CHALR, 1984 would apply. The shipping bills in these transactions are of the year 2003. So also in the Show Cause Notice, the department has mentioned the number of two shipping bills for which there was no IE Code mentioned in the shipping bills in respect of M/s. Gomathy Garments and M/s. Akshaya Impex. Both these shipping bills are also dated 11.3.2003. When the transactions are of the year 2003, the provisions in Regulation 2004 cannot bind the appellant. There are no hesitation to hold that the charges levelled against the appellant under CHALR, 2004 cannot sustain when the acts / omissions / cause of action has happened prior to the introduction of the Regulations. The Show Cause Notice itself is not sustainable in law and the entire proceedings are vitiated. The impugned order revoking the license or directing to forfeit the security cannot sustain in law. This apart, the ld. Counsel has also pointed out that there is much delay in adjudication and that for the export in 2003, the order of revocation has been passed in 2011. The Show Cause Notice was issued on 7.8.2006. Personal hearing was conducted before the adjudicating authority on 13.6.2007 and later on 7.2.2008. The impugned order has been passed after concluding the personal hearing with a delay of more than four-and-half years. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Maintainability of the appeal against the prohibition order. 2. Validity of the Show Cause Notice under Regulation 22 of CHALR, 2004 for exports made in 2003. 3. Allegations of failure to exercise due diligence and compliance with CHALR regulations. 4. Delay in adjudication process. Detailed Analysis: 1. Maintainability of the appeal against the prohibition order: The Tribunal initially disposed of Appeal No. C/351/2010, challenging the prohibition order dated 24.8.2010 by the Commissioner of Customs, Chennai, stating that the appeal was not maintainable. This decision attained finality as no further appeal was filed by the appellant. 2. Validity of the Show Cause Notice under Regulation 22 of CHALR, 2004 for exports made in 2003: The appellant contended that the Show Cause Notice issued on 7.8.2006 under Regulation 22 of CHALR, 2004 was not maintainable for exports conducted in 2003, as the CHALR, 2004 came into force only on 23.2.2004. The Tribunal agreed, noting that the applicable statutory provisions during the relevant period were those of CHALR, 1984. The Tribunal emphasized that the Preamble of CHALR, 2004, which superseded CHALR, 1984, did not apply retrospectively to actions done or omitted before its enforcement. Hence, the Show Cause Notice and the subsequent proceedings under CHALR, 2004 were deemed unsustainable in law. 3. Allegations of failure to exercise due diligence and compliance with CHALR regulations: The Show Cause Notice alleged violations of Regulation 13(a), (d), (e), and 19(8) of CHALR, 2004, accusing the appellant of failing to obtain necessary authorizations, not advising clients to comply with the Customs Act, and not exercising due diligence. However, the Tribunal found that these allegations could not be sustained under the CHALR, 2004 for actions that occurred in 2003. The Tribunal noted that during the relevant period, there was no specific proforma for obtaining authorization, and filing of shipping bills was considered sufficient authorization. 4. Delay in adjudication process: The Tribunal observed significant delays in the adjudication process. The Show Cause Notice was issued in 2006, with personal hearings conducted in 2007 and 2008, yet the order revoking the license was only passed in 2011. The Tribunal considered this delay as a factor contributing to the vitiation of the proceedings. Conclusion: The Tribunal set aside the impugned order revoking the license and directing the forfeiture of the security deposit, allowing the appeal with consequential reliefs. The judgment emphasized the applicability of the correct regulations based on the timeline of events and addressed procedural delays impacting the validity of the adjudication process.
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