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2022 (8) TMI 115 - HC - CustomsCancellation of the Custom Broker licence - forfeiture of security deposit - imposition of a penalty - Whether the Customs, Excise Service Tax Appellate Tribunal (CESTAT) misdirected itself in law by holding that the timeline prescribed under regulation 20(5) of the Customs Brokers Licensing Regulations, 2013 is directory? - HELD THAT - The issue of timelines under Regulation 17, CBLR 2018, which is pari materia to Regulation 20, CBLR 2013 are no longer res integra. This has been dealt with in a catena of judgments passed by this Court. In the matter titled OVERSEAS AIR CARGO SERVICES VERSUS COMMISSIONER OF CUSTOMS (GENERAL) NEW DELHI, 2016 (7) TMI 1060 - DELHI HIGH COURT , the show cause notice was issued after the lapse of ninety days from the date of receipt of the offence report and the Inquiry Report was submitted more than three years after the show cause notice was issued. The Bombay High Court in THE PRINCIPAL COMMISSIONER OF CUSTOMS (GENERAL) MUMBAI VERSUS UNISON CLEARING PVT. LTD., AND OTHERS. 2018 (4) TMI 1053 - BOMBAY HIGH COURT , wherein while deciding a batch of petitions held that the time limit contained in Regulation 20 of CBLR 2013 is directory and cannot be held to be mandatory. The Court further observed that in a case where strict adherence to the timeline cannot be ensured, the principles of fairness would require that delay must be justified by giving reasons as to why the time limit was not adhered to. It can be seen that the timelines as prescribed under various Regulations in CBLR 2018, have been consistently held by the Courts as mandatory in nature. Each timeline is sacrosanct, and the idea of prescribing a time limit by statute becomes redundant if not adhered to. Therefore, it is not just the overall timeline of 270 days (as set forth in the Circular No. 09/2010 dated 08.04.2010) that needs to be followed, but also each and every timeline as prescribed in the CBLR 2018 - the Appellant s customs broker licence is stated to have expired in the meantime and has not been renewed. The proceedings involving revocation of the appellant s custom broker license, forfeiture of its security deposit and imposition of penalty, will also stand set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) misdirected itself in law by holding that the timeline prescribed under Regulation 20(5) of the Customs Brokers Licensing Regulations, 2013 is directory? 2. Whether the revocation of the Appellant's Licence was vitiated on account of the failure to afford him the opportunity to cross-examine the persons, based on whose statements, his licence was revoked? Issue-wise Detailed Analysis: Issue 1: Timeline under Regulation 20(5) of CBLR 2013 - Background: The appellant challenged the order dated 01.10.2019 by CESTAT, which upheld the revocation of their Customs Broker Licence. The appellant contended that the Inquiry Report was submitted beyond the 90-day period prescribed under Regulation 20(5) of CBLR 2013, making the proceedings time-barred. - Appellant's Argument: The appellant argued that the timelines under CBLR 2013 are mandatory and not directory. They cited multiple judgments from the Delhi High Court, which have consistently held that the time limits prescribed under CBLR are sacrosanct and must be adhered to strictly. - Respondent's Argument: The respondent contended that the time limit under Regulation 20(5) of CBLR 2013 is directory and not mandatory. They relied on the Supreme Court decision in Commissioner of Customs Vs. Candid Enterprises to argue that delays by public authorities are condonable when fraud is involved. - Court's Analysis: The court reviewed the timeline of events and noted that the Inquiry Report was indeed submitted beyond the 90-day period. The court referred to several precedents, including Overseas Air Cargo Services v. Commissioner of Customs and Indair Carrier Pvt. Ltd. v. Commissioner of Customs (General), which emphasized the mandatory nature of the timelines under CBLR. - Conclusion: The court held that the timelines prescribed under Regulation 20(5) of CBLR 2013 are mandatory. The delay in submitting the Inquiry Report vitiated the proceedings, and the CESTAT's view that the timeline is directory was incorrect. The court set aside the CESTAT order and the proceedings involving the revocation of the appellant's licence, forfeiture of the security deposit, and imposition of the penalty. Issue 2: Opportunity for Cross-Examination - Background: The appellant initially raised the issue of being denied the opportunity to cross-examine the persons whose statements were used to revoke their licence. - Appellant's Withdrawal: During the proceedings, the appellant informed the court that they did not wish to press this issue. - Court's Note: The court acknowledged the appellant's decision not to press the issue and did not address it further in the judgment. Overall Conclusion: The court allowed the appeal, setting aside the CESTAT order dated 01.10.2019 and the subsequent proceedings related to the revocation of the appellant's Customs Broker Licence. The court emphasized that the timelines under CBLR 2013 are mandatory and must be strictly followed. The respondent was directed to process the appellant's application for the renewal of their licence in accordance with the law. No order as to costs was made.
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