2017 (5) TMI 29 - AT - Customs

Revocation of CHA licence - forfeiture of security deposit - time limitation - case of appellant is that the the SCN proposing revocation was issued only on 29.7.2016, which was more than three years after the receipt of offence report, the SCN is time barred in terms of Regulation 22(5) - Held that - The CHA licensing Regulations, 2004, prescribed very strict time limits for the proceedings to be undertaken against the CHA s. These regulations require that the CHA being proceeded against is required to be issued a SCN within a period of 90 days from the date of receipt of offence report, which is to be followed by an enquiry report - Commissioner (Customs) has proceeded to suspend the CHA licence of the appellant on 14.07.2013 in terms of Regulation 20(2) of CHALR, 2004. This action on the part of Commissioner (Customs) clearly indicates that he had considered the letter of DRI as the offence report. The enquiry report has been finalized only on 26.10.2016, which is more than three years from the date of receipt of offence report - appeal allowed - decided in favor of appellant-CHA.

Summary

Issues:
Revocation of CHA license and forfeiture of security deposit due to time-barred Show Cause Notice.

Analysis:
The appeal was filed against the revocation of the CHA license and forfeiture of the security deposit by the Commissioner (Customs), New Delhi. The appellant argued that the Show Cause Notice proposing revocation was time-barred as it was issued more than three years after the receipt of the offense report from the DRI. The appellant contended that the report dated 12.06.2013 from the DRI should be considered as the offense report, making the subsequent Show Cause Notice untimely under Regulation 22(5).

The Revenue, represented by the DR, supported the impugned order, arguing that the offense report crystallized only with the issuance of the Show Cause Notice dated 07.04.2016 by the DRI, not with the preliminary report dated 12.06.2013. The Revenue maintained that the strict time limits under the CHA licensing Regulations, 2004 were not contravened, considering the nature of the offense and the timing of the SCN.

The Tribunal noted that the Commissioner (Customs) had acted based on the initial report from the DRI dated 12.06.2013, suspending the CHA license on 14.07.2013. The final enquiry report was completed on 26.10.2016, exceeding the prescribed time limits for issuing the Show Cause Notice. Citing precedents from the Madras High Court and the Delhi High Court, the Tribunal emphasized that a violation of the time limits in CHA Regulations would result in dropping the proceedings against the CHA.

Consequently, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant. The miscellaneous application was also disposed of accordingly.