2016 (6) TMI 658 - AT - Customs

Revocation of CHA license - nature and scope of offence - gross violation of timeline of 90 days prescribed in Regulation 22(5) - Held that - It may be observed that the time line in Regulation 19(2) of CBLR for passing the order after hearing is preceded by word may because of which Delhi High Court did not regard it to be mandatory while the time line in Regulation 22(5) is preceded by shall because of which Madras High Court held the same to be mandatory. - the impugned order is unsustainable on account of time bar.

Summary

Issues:
Revocation of CHA license and forfeiture of security based on violation of CHALR; Breach of timeline prescribed in CHALR for submission of inquiry report; Interpretation of mandatory vs. non-mandatory timelines in CHALR; Precedents set by Madras High Court and Delhi High Court regarding timeline compliance; Impact of time bar on the sustainability of the impugned order.

Analysis:
The appeal before the Appellate Tribunal CESTAT New Delhi challenged the revocation of a Customs House Agent (CHA) license and forfeiture of security following a violation of the Customs House Agent Licensing Regulations 2004 (CHALR). The issue primarily revolved around the breach of the timeline prescribed in Regulation 22(5) of the CHALR for the submission of the inquiry report. The appellant's advocate argued that the delay in submitting the report was a violation of the prescribed timeline and cited a judgment by the Madras High Court to support the contention that such breaches are fatal to the order.

The Departmental Representative (DR) acknowledged the breach of the timeline but relied on a Delhi High Court judgment to argue that the timelines under CHALR were not mandatory. The Tribunal carefully considered both arguments and examined the specific language used in the relevant regulations to determine the nature of the timelines. Regulation 19(2) of the Customs Broker Licensing Regulations (CBLR) and Regulation 22(5) of the CHALR were compared to highlight the distinction between the use of "may" and "shall" in defining the timelines, indicating the mandatory nature of the latter.

In light of this analysis and the precedence set by the Madras High Court, the Tribunal concluded that the impugned order was unsustainable due to the time bar. Referring to a judgment by the Allahabad High Court, the Tribunal emphasized that once a demand is deemed time-barred, there is no need to delve into the merits of the case. Therefore, the Tribunal set aside the impugned order and provided consequential relief, if any, based on the findings regarding the breach of the timeline prescribed in CHALR.

This judgment underscores the importance of adhering to statutory timelines in regulatory frameworks like CHALR and clarifies the distinction between mandatory and non-mandatory timelines in interpreting legal provisions. The decision also highlights the significant impact of timeline compliance on the sustainability of administrative orders, emphasizing the need for procedural adherence in regulatory enforcement actions.