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2025 (1) TMI 796 - AT - CustomsBreach of the timeline prescribed under the Customs Brokers Licensing Regulations, 2018 (CBLR) for the suspension or revocation of the customs broker license - breach of the provisions under regulations 10(d) 10(e) of CBLR, 2018 by the customs broker. Whether, in the given facts of the case, there has been any breach of time line prescribed under CBLR, 2018 for suspension or revocation of license granted under CBLR? - HELD THAT - The Coordinate Bench at Delhi in the case of Rishad Shipping Clearing Agency Ltd Vs CCE CGS, Indore 2020 (3) TMI 270 - CESTAT NEW DELHI held time line as mandatory after examining conflicting decisions of various High Courts and Tribunals. It was observed that there are two sets of decisions, where the Delhi High Court and Madras High Court have held that time limit prescribed for issuance of notice within 90 days from the date of receipt of offence report is mandatory in nature and the Bombay High Court and Kolkata High Court have held that issuance of notice within stipulated time limit is not mandatory but directory in nature. Since in this case we have already found that department itself was describing the time line provided in CBLR as sacrosanct, hence we rely on the judgments of Hon ble High Court of Delhi and Madras, wherein, it was held that time line prescribed in the CBLR is mandatory and since in the present appeal the SCN has been admittedly issued beyond 90 days, thus, on this count itself, the SCN is not tenable and subsequent revocation of license based on this SCN is also liable to be set aside. Whether, in the given facts of the case, there is any breach of the provisions under regulations 10(d) 10(e) of CBRL, 2018? - HELD THAT - As can be seen from Regulation 10(d), the customs broker is required to advice his client to comply with the provisions of the Act and in case of non-compliance, he is required to bring the matter to the notice of Deputy Commissioner of Assistant Commissioner of Customs. In this case, it is apparent that the client was the same appellant company but in the capacity of importer. Therefore, there is nothing on record that they had not advised their client about the statutory provisions - the charges leveled against the appellant under Regulation 10(d) are not tenable, in the facts of the case. Moreover, exactly what provisions of the Act or other allied Acts or Rules were not advised by the appellant to his client is also not forthcoming in the charges leveled against the appellant in the SCN. Therefore, unless there is a very clear ground about the charges leveled, the appellant would not get an opportunity to defend his case - A general reliance on the entire SCN, without elaborating which parts were relied upon for establishing the breach of regulation 10(d) by the customs broker, would not be correct. Thus, the charges under regulation 10(d) are not sustainable. Similarly, the provisions under regulation 10(e) is also very clear, which essentially provides for that the customs broker needs to exercise due diligence in communicating correct information to his client with reference to any work relating to clearance of cargo. Nothing in the SCN dt.13.03.2024 is showing as to what wrong information was provided by the appellant, in their capacity as customs broker to the appellant, acting as importer. Merely because they are the same company, it could not be presumed that everything which was known to the company, as importer was also known to the appellant, as customs broker, unless detailed evidence is brought on record - at the first opportunity itself the customs broker has in fact, tried to ascertain the correctness of information and had filed the Bill of Entry based on all the documents which were otherwise found to be genuine. This, in itself, would suffice that they had exercised reasonable due diligence. It is also to be noted that out of 17 obligations, the department would charge only on two counts i.e., 10(d) 10(e) and therefore, in respect of other obligations, they were not found to be noncompliant. Thus, to invoke 10(e) in this case without substantial evidence directly implicating them in positive manner in smuggling of goods, is not tenable. Conclusion - The time line prescribed in the CBLR is mandatory and since in the present appeal the SCN has been admittedly issued beyond 90 days, thus, on this count itself, the SCN is not tenable and subsequent revocation of license based on this SCN is also liable to be set aside. The mandatory nature of the timeline for issuing SCNs under CBLR was affirmed. The necessity for substantial evidence to support charges under regulations 10(d) and 10(e) was emphasized. The impugned order revoking the license of the appellant as well as forfeiture of security deposit and imposition of penalty for violation of 10(d) and 10(e) of CBLR is set aside - the impugned order is not sustainable on account of delay in issuing SCN as well as on account of non-substantiating the grounds for invoking regulations 10(d) 10(e). Appeal allowed.
1. ISSUES PRESENTED and CONSIDERED The core legal questions addressed in the judgment are:
2. ISSUE-WISE DETAILED ANALYSIS a) Breach of Timeline under CBLR, 2018
b) Breach of Provisions under Regulations 10(d) & 10(e) of CBLR, 2018
3. SIGNIFICANT HOLDINGS
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