2015 (12) TMI 229 - AT - Customs

Suspension of CHA license - forfeiture of security deposit - imposition of penalty - Held that - There is no clarity about receipt of an offence report or the date of such receipt hence even if it is assumed that the date of order of immediate suspension is taken for reckoning the time limit for issue of show cause notice, the notice issued on 27.08.2014 is issued almost five months after the due date. Similarly, the inquiry report by the Deputy/ Assistant Commissioner is to be made within ninety days of issue of show cause notice. In the present case, there is a delay of three months after the time limit prescribed under the said Regulation. There is also a delay in issuing the impugned order of revocation which is beyond ninety days of submission of inquiry report. - impugned order of the original authority is issued in violation of the provisions of CHALR, 2004 /CBLR, 2013 and is not legally sustainable. The same is to be set-aside - Decided in favour of appellant.

Summary

Issues:
1. Suspension of CHA license
2. Revocation of CHA license along with forfeiture of security deposit

Issue 1: Suspension of CHA license
The appellant, a Customs House Agent (CHA), filed a Bill of Entry for Cookware sets on behalf of an importer. However, firecrackers were found concealed in the consignment during a physical examination. Proceedings were initiated against the appellant under the Customs Act, 1962, and Custom House Agent Licensing Regulations, 2004 (CHALR, 2004)/ Customs Brokers Licensing Regulations, 2013. The appellant was issued a show cause notice for penalty under the Customs Act, 1962, leading to the suspension of their CHA license. The Commissioner later confirmed the suspension. The appellant argued that the procedures outlined in CHALR, 2004, and CBLR, 2013 were not followed, citing delays in adherence to prescribed time limits for issuing notices and reports.

Issue 2: Revocation of CHA license along with forfeiture of security deposit
The appellant's main contention was the non-adherence to the time limits specified in CHALR, 2004, and CBLR, 2013 during the proceedings against them. The regulations mandated specific timeframes for actions like issuing show cause notices, preparing inquiry reports, and passing orders. However, in this case, there were significant delays in each stage of the process, such as issuing the show cause notice and submission of the inquiry report. The appellant argued that the Commissioner's reliance on certain court decisions to consider the time limits as directory rather than mandatory was misplaced. The appellant highlighted a specific decision by the Hon'ble Madras High Court emphasizing the strict adherence to time limits prescribed in regulations, which the original authority failed to uphold.

The appellate tribunal found that the original authority's order revoking the appellant's license was issued in violation of CHALR, 2004, and CBLR, 2013, rendering it legally unsustainable. The tribunal set aside the impugned order and allowed the appeal, leading to the disposal of the appeals against the suspension of the license. The tribunal emphasized the importance of adhering to the prescribed time limits in regulatory proceedings and criticized the original authority's contradictory approach in handling the inquiry report.