2015 (11) TMI 947 - AT - Customs

Suspension of CHA license - illegal baggage clearances at Chennai Seaport - CHA failed to discharge their duties and responsibilities as a CHA as per CHALR - Held that - suspension of licence is almost three years now and the authority has not completed the proceedings till date. The Department s plea that delay is due to request of appellant to keep the matter pending as subjudice is not justified and acceptable. - The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by the Board to prescribe an overall time limit of nine months from the date of receipt of offence report, by prescribing time limits at various stages of issue of Show Cause Notice, submission of inquiry report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs recording his findings on the issue of suspension of CHA license, and for passing of an order by the Commissioner of Customs. Suitable changes have been made in the present time limit of forty-five days for reply by CHA to the notice of suspension, sixty days time for representation against the report of AC/DC on the grounds not accepted by CHA, by reducing the time to thirty days in both the cases under the Regulations. Investigating authority shall furnish its report to the Commissioner of Customs who had issued the CHA license (Licensing Authority), within thirty days of the detection of an offence. The Licensing Authority shall take necessary immediate suspension action within fifteen days of the receipt of the report of the investigating authority. A post-decisional hearing shall be granted to the party within fifteen days from the date of his suspension. - High Court of Madras order is squarely applicable to the present case. In spite of definite time limit of 9 months prescribed by Board circular dt. 8.4.2010 for completion of the proceedings, in the present case, we find that even after 2 years the proceedings are not completed. - Decided in favour of appellant.

Summary

Issues:
- Suspension of CHA license without issuance of show cause notice or conducting an inquiry
- Delay in completion of suspension proceedings
- Applicability of Board circular prescribing time limits for suspension proceedings
- Compliance with Regulations 20 and 22 of CHALR 2004

Analysis:
1. Suspension of CHA license without issuance of show cause notice or conducting an inquiry:
The appellant, a Customs House Agent (CHA), appealed against the suspension of their license by the Commissioner of Customs, Chennai, following allegations of involvement in illegal baggage clearances. The suspension was based on the CHA's failure to fulfill obligations under CHALR, specifically Regulation 13. The appellant argued that no show cause notice (SCN) was issued, and no inquiry was conducted, relying on a decision by the Madras High Court. The Tribunal noted the lack of completion of proceedings and set aside the suspension order, allowing the appellant to resume CHA duties.

2. Delay in completion of suspension proceedings:
Despite the prescribed time limit of nine months for completion of suspension proceedings as per a Board circular, the Tribunal observed a delay of over two years in the case at hand. The Tribunal emphasized that the delay could not be justified by the appellant's request to keep the matter pending, as claimed by the Department. Citing the Madras High Court's decision, the Tribunal ruled in favor of the appellant, highlighting the importance of timely completion of proceedings.

3. Applicability of Board circular prescribing time limits for suspension proceedings:
The Tribunal referenced a Board circular specifying time limits for suspension proceedings against CHAs, emphasizing the need for adherence to these timelines. The circular aimed to expedite the process by setting specific timeframes for various stages of suspension proceedings. The Tribunal stressed that despite the clear guidelines provided in the circular, the proceedings in the present case had significantly exceeded the prescribed time limit, warranting the setting aside of the suspension order.

4. Compliance with Regulations 20 and 22 of CHALR 2004:
Regulations 20 and 22 of CHALR 2004 outline the procedures for suspending and revoking CHA licenses. The Tribunal highlighted the necessity of following these regulations, particularly the requirement for an inquiry under Section 22 following an initial suspension under Regulation 20(2). Failure to adhere to these procedures within the specified time limit could result in the suspension orders being set aside, as seen in the present case. The Tribunal directed the adjudicating authority to continue the proceedings under Regulation 22, ensuring compliance with the regulatory framework governing CHA licenses.