2025 (1) TMI 687 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - Breach of time limit while conducting the proceedings the provisions of regulation 17 of the Customs Brokers Licensing Regulation 2018 - HELD THAT - In the present case, though there is nothing on the record to indicate the date on which the offence report was received by the Commissioner, but what is important to notice is that the Customs Brokers License of the appellant was suspended on 15.05.2018 after taking note of the offence report submitted by the Directorate of Revenue Intelligence. Thus, even if 15.05.2018 is taken as the date on which the offence report was received by the Commissioner, the show cause notice should have been issued to the appellant within 90 days from 15.05.2018. However, the show cause notice was issued to the appellant only on 20.06.2019 which is even after a period of one year from the date of receipt of the offence report. The time limit set out under regulation 17 (1) of the 2018 Regulations for issuance of the show cause notice within 90 days from the date of receipt of the offence report has been violated. It also shows that the time limit set out under regulation 17(7) of the 2018 Regulations requiring the Commissioner to pass an appropriate order within 90 days after receipt of the enquiry report has also been violated. The delay in the issuance of the show cause notice under regulation 17(1) is about nine months and the delay in passing the order under regulation 17(7) is also of about more than four months. It is, therefore, not possible to accept the contention advanced by the Revenue that the breach of the time limits set out in regulation 17 of 2018 Regulations would not result in setting aside of the order revoking the Customs Broker License of the appellant. The time limit has to be complied with and any breach would result in setting aside the final order. Conclusion - The failure to issue the show cause notice and the final order within the prescribed time limits invalidated the revocation of the Customs Broker License. Appeal allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the time limits prescribed under Regulation 17 of the Customs Brokers Licensing Regulation 2018 (CBLR 2018) were adhered to by the Commissioner in the process of revoking the Customs Broker License.
• Whether the violation of these time limits mandates the setting aside of the order revoking the Customs Broker License.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Adherence to Time Limits under Regulation 17 of CBLR 2018

Relevant Legal Framework and Precedents:

Regulation 17 of the CBLR 2018 outlines the procedure for revoking a license or imposing a penalty on a Customs Broker. It prescribes specific time limits for various stages of the process, including the issuance of a show cause notice and the submission of an inquiry report. The Delhi High Court in Leo Cargo Services and other cases has consistently held these time limits to be mandatory.

Court's Interpretation and Reasoning:

The court examined whether the prescribed time limits were followed. It noted that the show cause notice was issued more than a year after the receipt of the offence report, violating Regulation 17(1). Similarly, the order revoking the license was issued beyond the 90-day period after the inquiry report, violating Regulation 17(7).

Key Evidence and Findings:

The court found that the show cause notice was issued on 26.06.2019, well beyond the 90-day limit from the alleged receipt of the offence report on 15.05.2018. Additionally, the final order was passed on 30.04.2020, exceeding the 90-day limit from the inquiry report submission date of 25.09.2019.

Application of Law to Facts:

The court applied the mandatory nature of the time limits as established in previous judgments. It concluded that the failure to adhere to these limits rendered the revocation order invalid.

Treatment of Competing Arguments:

The department argued that delays were due to ongoing proceedings under the Customs Act, 1962, and should not invalidate the order. However, the court rejected this, emphasizing the mandatory nature of the time limits as upheld by multiple precedents.

Conclusions:

The court concluded that the violation of the time limits under Regulation 17(1) and 17(7) necessitated the setting aside of the order revoking the license.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning:

"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."

Core Principles Established:

• The time limits prescribed under Regulation 17 of CBLR 2018 are mandatory and must be strictly adhered to.
• Violation of these time limits results in the invalidation of the proceedings and any orders passed therein.

Final Determinations on Each Issue:

• The court determined that the failure to issue the show cause notice and the final order within the prescribed time limits invalidated the revocation of the Customs Broker License.
• The appeal was allowed, and the order dated 30.04.2020 was set aside.

This judgment reinforces the importance of adhering to procedural timelines in regulatory frameworks, emphasizing the legal consequences of non-compliance.