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2023 (6) TMI 1096 - HC - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty - time limitation for submission of Enquiry report - enquiry report dated 7th December 2015 had been submitted on 16th December 2015 before the relevant authority, much beyond time - Section 130 of the Customs Act, 1962. JUDGEMENT PER I. P. MUKERJI, J. (Oral), (08/06/2023) - HELD THAT - Section 130 of the Customs Act, 1962 empowers this Court to hear an appeal from the above order passed by the tribunal only if a substantial question of law is involved. On the question whether the time period of 90 days granted to the enquiry officer to submit his report is directory or mandatory, there are, as brought to our notice, innumerable decisions of the High Courts, some opining that the direction is mandatory, as in M/S. KTR LOGISTICS SOLUTIONS PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS, THE INQUIRY OFFICER/DEPUTY COMMISSIONER OF CUSTOMS 2019 (12) TMI 22 - MADRAS HIGH COURT and others which include a pronouncement of our court in ASIAN FREIGHT (UNIT OF ESAN FREIGHT TRAVEL PVT. LTD.) AND ORS. VERSUS THE PRINCIPAL COMMISSIONER OF CUSTOMS (AIRPORT ADMINISTRATION) , CUSTOMS HOUSE AND ORS. 2016 (8) TMI 1362 - CALCUTTA HIGH COURT which lay down that the stipulation is directory. The first thing to be noticed in this stipulation is that there is no consequence for breach of the time limit prescribed. The regulation does not say that if a report is not furnished within 90 days, no notice is to be taken of the enquiry report. Neither is there any procedure prescribed for extension of time to file the report if it is not filed within time - the only intention that can be ascribed to the makers of the regulation is that it is supposed to be an administrative instruction to the enquiry officer to complete the investigation or enquiry within a stipulated time period. If the enquiry report is delayed, that would not affect the proceedings but steps may be taken against the officer for breach of the administrative instruction. Whether the tribunal was right in not accepting the enquiry report filed beyond time? - HELD THAT - The requirement to file the report within 90 days was not mandatory at all. Even if filed on 21st December 2015 well beyond 90 days, it had been taken on record by the adjudicating authority - However, it was the discretion of the tribunal as to what weight it would put on the enquiry report. The tribunal, presided over by a retired High Court Judge, had on consideration of the conduct of the appellant and the manner in which the enquiry had been conducted including the time taken to submit it, decided not to attach any weight to it at all, and rejected it. The licence of the respondent was suspended eight years ago and such suspension is continuing. Even if the respondent is adjudged guilty of illegal exportation of contraceptives to Bangladesh, eight years suspension of licence has been proportionate punishment - This appeal is dismissed. JUDGMENT PER BISWAROOP CHOWDHURY, J. (23/06/2023) - The charge of violation of Regulation 11(e) comes into operation when information is given by Customs Broker to his client and there is allegation that the information given is false. When there is allegation that the Customs Broker did not advise the client to comply the provisions of the Act there is no question of giving information to client which is not true, when there is no allegation by the client/exporter. Thus there is no breach of the said provision - the findings of the enquiry officer cannot be sustained as it is based on the statement of sole witness Bappa Biswas who could not be cross examined and the enquiry officer did not put questions to obtain material particulars with regard to his statement and the facts of the case, and relied fully on the statement of Shri Biswas before Assistant Commissioner of Customs. As the respondent could not cross examine the witness nor he could adduce evidence it was incumbent upon the Licensing Authority to consider the materials on record including representation to the show cause notice issued upon the respondent. It appears that Pr. Commissioner of Customs (Airport and Admin) without taking into consideration the representation made by the respondent explaining different facts relating to the show cause notice, issued Order of revocation - It is well settled principle of law that when a report comes to an Authority who has granted license to a Customs broker regarding Commission of an offence under the Customs Act by an exporter and an allegation of breach of negligence by the Customs broker the licensing authority while proceeding against the Customs broker should proceed independently in accordance with law without being influenced by the report and finding of the investigating Authority regarding alleged offence. The findings of the enquiry officer and decision of the Pr Commissioner of Customs (Airport and Admin) with regard Article of Charge-I, and Article of Charge-II are perverse and the same are set aside. However with regard to charge III the allegation of misconduct against the director of respondent of not appearing upon receipt of the summons, there was some negligence on the part of the director of the respondent in not appearing personally before Commissioner of Customs(p) which ought to have been done - However as security deposit amount of respondent is already confiscated by the Appellant and the respondent has suffered suspension for about 8 years no further penalty is required to be passed at this stage. Appeal disposed off.
Issues Involved:
1. Whether the prescribed time limit for taking steps in each stage under Regulation 22 of CHALR, 2002 is mandatory. 2. The effect of exceeding these time limits. Summary: Issue 1: Whether the prescribed time limit for taking steps in each stage under Regulation 22 of CHALR, 2002 is mandatory. The tribunal had set aside the order of the Commissioner of Customs due to the enquiry report being submitted beyond the 90-day limit stipulated in Regulation 20(5) of the Customs Broker Licensing Regulations, 2013. The High Court noted that there is no consequence prescribed for the breach of this time limit, indicating that the time period is directory, not mandatory. The intention behind the regulation is to serve as an administrative instruction to complete the enquiry within a stipulated time, and delays would not affect the proceedings but might lead to administrative action against the officer. Issue 2: The effect of exceeding these time limits.The High Court observed that the tribunal exercised its discretion in not accepting the enquiry report filed beyond the 90-day period. This discretion was not seen as grossly erroneous or unreasonable, thus no substantial question of law arose from the tribunal's decision. The tribunal also considered the prolonged suspension of the respondent's license (eight years) as a proportionate punishment. Separate Judgment by Justice Biswaroop Chowdhury:Justice Biswaroop Chowdhury agreed with the findings of his learned brother except on the point of upholding the tribunal's decision regarding the non-acceptance of the 'Enquiry Report'. He opined that Regulation 20(5) is directory and the tribunal should have considered the enquiry report despite the delay. The enquiry report should not be discarded solely based on the delay unless the period is mandatory. He emphasized that the enquiry should be conducted with caution, especially in the absence of the respondent, and that the findings of the enquiry officer were not thoroughly scrutinized. Justice Chowdhury found the enquiry proceedings and the decision of the Principal Commissioner of Customs (Airport and Admin) to be perverse due to the lack of proper consideration of the respondent's submissions and the reliance on unchallenged statements. He set aside the findings related to Article of Charge-I and Article of Charge-II but acknowledged some negligence on the part of the respondent's director regarding Charge-III. Given the confiscation of the security deposit and the eight-year suspension, no further penalty was deemed necessary. The appeal was thus disposed of, and the order of the Appellate Authority was to be implemented.
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