2016 (11) TMI 816 - AT - Customs

Proceedings against the CHA - attempted export of non-basmati rice - prohibition under SI. No. 45A of Schedule 2 of ITC (HS) - Whether the time limit prescribed under Regulation 22(2) CHALRs 2004 are to be followed strictly or not? - Held that - The issue of time limit came up before the Hon ble High Court of Delhi in the case of S.K. Logistics 2016 (4) TMI 1063 - DELHI HIGH COURT where it was held that A careful perusal of the said order reveals that no plea was urged by the said Appellant CHA before the CESTAT that the mandatory time limit under Regulation 22(5) of CHALR 2004 was violated. What has been recorded in the said order is a contention of the said Appellant that the time limit under Regulation 22(1) of CHALR 2004 was not adhered to. That time limit concerns the issuance of show cause notice within 90 days from the date of receipt of offence report . In that case there was no occasion for the CESTAT to consider whether the violation of the time limit under Regulation 22(5) of CHALR 2004 for submitting the enquiry report would vitiate the proceedings. The first enquiry report was submitted by the enquiry officers on 26.06.2012 which was not supplied to the appellant and the Ld. Commissioner of Customs arbitrarily appointed in another enquiry officers on 04.07.2012 who submitted the report as per the wishes of Ld. Commissioner of Customs on 10.08.2012. In fact, there is no provisions in CHALR, 2004 to appoint second enquiry officers but Regulation 22(7) only gives power to the Ld. Commissioner of Customs to consider the report submitted by enquiry officers and taken the decision thereon which the Ld. Commissioner failed to do so - No power to appoint second enquiry officer, which has been done in this case therefore, we do not find any merit in the impugned order, accordingly, the same lacks merit, hence set aside. As the appellant has succeeded on the issue of limitation as well as on the issue of appointment of second enquiry officer therefore, the impugned order is set aside - appeal allowed.

Summary

Issues:
- A. Compliance with time limits under Regulation 22(2) CHALRs 2004
- B. Authority to appoint a second enquiry officer
- C. Sufficiency of punishment suffered by the appellant

Issue A: Compliance with time limits under Regulation 22(2) CHALRs 2004

The appellant, a Customs House Agent, challenged the revocation of their license and forfeiture of security deposit due to an attempted export violation. The appellant argued that the time limits prescribed under Regulation 22 were not followed strictly by the Commissioner of Customs. The appellant contended that the show cause notice and enquiry report were delayed, violating the regulations. The High Courts in various cases, such as S.K. Logistics and Impexnet Logistic, emphasized the importance of adhering to the time limits under the regulations. The Tribunal concurred that the failure to comply with the time limits rendered the impugned order unsustainable, as per the strict interpretation of the regulations.

Issue B: Authority to appoint a second enquiry officer

The appellant raised concerns about the appointment of a second enquiry officer by the Commissioner of Customs, arguing that it was not permissible under Regulation 22(7) of the CHALRs 2004. The Tribunal referred to the case of Nagendra Forwarders Pvt. Ltd., which highlighted that the Commissioner lacked the authority to appoint a second enquiry officer. The Tribunal held that the Commissioner's action in appointing a second enquiry officer was unjustified and not supported by the regulations. Consequently, the impugned order lacked merit and was set aside.

Issue C: Sufficiency of punishment suffered by the appellant

Given the success of the appellant on the issues of time limits and appointment of a second enquiry officer, the Tribunal did not delve into the question of whether the punishment suffered by the appellant was sufficient. The Tribunal ruled in favor of the appellant on the first two issues, leading to the setting aside of the impugned order. Therefore, the sufficiency of the punishment suffered by the appellant was not addressed by the Tribunal.

In conclusion, the Tribunal allowed the appeal, citing the appellant's success on the issues of compliance with time limits and the appointment of a second enquiry officer. The impugned order revoking the CHA license and forfeiting the security deposit was set aside, providing the appellant with consequential relief.