2016 (2) TMI 139 - AT - Customs

Revocation of CHA license - forfeiture of the whole amount of security deposit - appellant pleaded that he is not arguing the issue on merit but only the issue of non-observance of the time lines prescribed in the CHA Licensing Regulations, 2004 adding that the show cause notice in this case was issued on 17.7.2013 while the enquiry report was submitted on 26.6.2015 which was beyond the time period prescribed in Regulation 22 of the said Regulations, and that such violation of the prescribed time limit makes the impugned order unsustainable. Held that - if any of the intermediary steps such as issue of show cause notice, drawing up of an inquiry report, or passing of a revocation order is beyond the periods mandated under Regulation 20 of the 2013 Licensing Regulations, (corresponding to Regulation 22 of the Customs House Agents Licensing Regulation, 2004 as amended in 2010), the eventual order of revocation would be invalid. - the impugned order cannot be sustained and is accordingly quashed. Appeal is allowed. - Decided in favor of appellant.

Issues Involved:
Violation of time lines prescribed in CHA Licensing Regulations, 2004 leading to revocation of CHA license and forfeiture of security deposit.

Detailed Analysis:

Issue 1: Violation of Time Lines in CHA Licensing Regulations
The appeal was filed against an order revoking the CHA license of the appellant and forfeiting the security deposit. The main contention raised was the non-observance of the time lines prescribed in the CHA Licensing Regulations, 2004. The advocate for the appellant argued that the show cause notice was issued on 17.7.2013, while the enquiry report was submitted on 26.6.2015, which exceeded the time period specified in Regulation 22 of the said Regulations. The advocate emphasized that such a violation of the prescribed time limit rendered the impugned order unsustainable.

Issue 2: Interpretation of Time Lines in Regulations
The debate centered around whether the time lines specified in Regulation 22 of the CHA Licensing Regulations, 2004 were mandatory or directory in nature. The respondent contended that the time lines were directory and not fatal to the impugned order if violated. However, the Tribunal analyzed the contentions of both sides and delved into the specific provisions of Regulation 22 to determine the nature of the time lines.

Analysis of Regulation 22 of CHA Licensing Regulations
Regulation 22 outlines the procedure for suspending or revoking a license under Regulation 20. It mandates that the Deputy Commissioner of Customs must submit an inquiry report within 90 days from the date of issuing a notice to the Customs House Agent. In this case, the notice was issued on 17.7.2013, but the inquiry report was submitted over 22 months later on 26.6.2015, clearly breaching the prescribed time limit. The Tribunal highlighted that the proviso to sub-regulation 1 of Regulation 22 was irrelevant to the proceedings as it pertained to the suspension of licenses under Regulation 20.

Precedents and Legal Interpretation
The Tribunal referred to various legal precedents, including judgments by the Delhi High Court, Madras High Court, and previous decisions of the Tribunal. These cases uniformly held that any delay in intermediary steps such as issuing a show cause notice, preparing an inquiry report, or passing a revocation order beyond the mandated time periods under the Licensing Regulations would render the eventual revocation order invalid.

Conclusion
Based on the detailed analysis of the Regulations, legal interpretations, and precedents, the Tribunal concluded that the impugned order revoking the CHA license could not be sustained due to the violation of the prescribed time lines. Consequently, the appeal was allowed, and the impugned order was quashed.

This comprehensive analysis showcases the meticulous scrutiny of the legal provisions, precedents, and arguments presented before the Tribunal, leading to a well-reasoned judgment in favor of the appellant.

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