2016 (7) TMI 1060 - HC - Customs

Revocation of the Customs House Agent (CHA) license - on examination it was noticed that it was an attempt at showing exports for claiming fraudulent drawback. - Period of limitation - Held that - The SCN dated 14th October 2011 that was issued to the Appellant is the same SCN that was issued to M/s. S.K. Logistics, M/s. Sunil Dutt and M/s. Entire Logistics Pvt. Ltd. The offence report is the same for all the said noticees. It was received on 19th May 2011. In terms of Regulation 22 (1) of the CHALR 2004 (which corresponds to Regulation 20 (1) of the CBLR 2013), the SCN had to be issued within ninety days from 19th May 2011, i.e. on or before 18th August 2011. Instead the SCN was issued on 14th October 2011. Secondly, in terms of Regulation 22 (5) of the CHALR 2004, the enquiry had to be completed and a report submitted within 90 days of the issuance of the SCN under Regulation 22 (1). In the present case, it is not disputed that the inquiry report was submitted only on 16th January 2015 more than three years after the SCN dated 14th October 2011 was issued. This Court has consistently emphasised the mandatory nature of the aforementioned time limits in several of its decisions. The impugned order dated 10th April 2015 passed by the Commissioner of Customs (General), Delhi revoking the CHA license of the Appellant to be unsustainable in law. - Decided in favor of CHA

Summary

Issues:
Revocation of Customs House Agent (CHA) license due to fraudulent activities; Violation of time limits under Customs Broker Licensing Regulations, 2013.

Issue 1: Revocation of CHA License
The case involved the revocation of a Customs House Agent (CHA) license due to fraudulent activities related to claiming fraudulent drawback on exports. The investigation revealed poor quality goods, over-invoicing, and fictitious addresses of exporters. The Commissioner of Customs imposed a penalty on the Appellant, which was paid, and later issued a show cause notice for revocation of the CHA license. The Appellant argued that the time limits under the CHALR, 2004 were not adhered to during the proceedings. The revocation was confirmed by the Commissioner, and the appeal to CESTAT was dismissed based on the seriousness of the violation. However, the High Court emphasized the mandatory nature of time limits under CHALR, 2004 and CBLR, 2013 in various judgments, leading to the conclusion that the revocation of the CHA license was unsustainable in law.

Issue 2: Violation of Time Limits
The Appellant raised the issue of non-compliance with the time limits set out in the Custom Broker Licensing Regulations, 2013 during the proceedings. The Court highlighted the mandatory nature of time limits under CHALR, 2004 and corresponding provisions in CBLR, 2013 in several judgments. It was noted that the SCN was issued after the prescribed time limit and the inquiry report was submitted more than three years after the issuance of the SCN, violating the regulations. The Court cited previous cases where revocation of licenses was deemed unlawful due to non-adherence to time limits. Consequently, the Court set aside the orders revoking the CHA license, emphasizing the importance of complying with the prescribed time limits in such cases.

In conclusion, the High Court ruled in favor of the Appellant, setting aside the orders revoking the CHA license and affirming the mandatory nature of time limits under the relevant regulations. The judgment highlighted the significance of adhering to procedural requirements and time limits in matters concerning the revocation of licenses, emphasizing the principles of natural justice and procedural fairness in such proceedings.