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2018 (1) TMI 879 - HC - CustomsInterpretation of Statute - offence report as used in Regulation 20(1) of 2013 Regulations - time limit for issuance of Offence Report - suspension of CHA License - Held that - the suspension order dated 31.03.2017 was based upon the offence report, and therefore the show cause notice under Regulation 20, dated 14.07.2017, would be clearly barred by the limitation as it was issued more than 90 days after the offence report was submitted. The SCN dated 14.07.2017 initiating proceedings under Regulation 20 of the 2013 Regulations quashed, as it has been issued after 90 days from the date of receipt of offence report - petition disposed off.
Issues Involved:
1. Validity of the show cause notice issued under Regulation 20 of the Customs Broker & Licensing Regulations, 2013. 2. Legality and correctness of the suspension order dated 12.06.2017 under Regulation 19(2) of the 2013 Regulations. 3. Interpretation of the term "offence report" under Regulation 20(1) of the 2013 Regulations. Issue-Wise Detailed Analysis: 1. Validity of the Show Cause Notice Issued Under Regulation 20 of the 2013 Regulations: The petitioner challenged the show cause notice dated 14.07.2017 issued by the Principal Commissioner under Regulation 20 of the Customs Broker & Licensing Regulations, 2013, on the grounds that it was issued after the expiry of the 90-day limitation period from the date of receipt of the offence report. The petitioner argued that this made the notice invalid and illegal. The court referred to previous judgments, including Overseas Air Cargo Service v. Commissioner of Customs and Indair Carrier Pvt. Ltd. v. Commissioner of the Custom (General), which held that the 90-day period mentioned in Regulation 20(1) is mandatory and sacrosanct. A show cause notice issued after this period is invalid, rendering proceedings under Regulation 20 null and void. The court concluded that the show cause notice dated 14.07.2017 was issued beyond the 90-day period from the date of the offence report and was therefore barred by limitation. 2. Legality and Correctness of the Suspension Order Dated 12.06.2017 Under Regulation 19(2) of the 2013 Regulations: The petitioner also challenged the legality and correctness of the order dated 12.06.2017 passed by the Commissioner, which confirmed the suspension of the license under Regulation 19(2) of the 2013 Regulations. The court noted that the petitioner's license was suspended on 31.03.2017, following an earlier prohibition order on 15.03.2017. The petitioner had previously challenged these orders, and the court had directed that a hearing be given to the petitioner, after which a final order on the suspension would be passed. The Commissioner (Meerut) confirmed the suspension on 12.06.2017. However, since the show cause notice under Regulation 20 was quashed due to being time-barred, the order confirming the suspension also became ineffective and infructuous. 3. Interpretation of the Term "Offence Report" Under Regulation 20(1) of the 2013 Regulations: The core issue in the writ petition was the interpretation of the term "offence report" as used in Regulation 20(1) of the 2013 Regulations. The petitioner argued that the "offence report" should be the first information received by the authority regarding irregularity and misconduct, marking the starting point for issuing a show cause notice. The court referred to judgments from the Madras High Court, including M/s A. M. Ahamed & Co. v. The Commissioner of Customs (Imports) and Patriot Freight Logistics System v. The Commissioner of Custom, Chennai, which supported the petitioner's interpretation. The court observed that the 2013 Regulations, like the previous 2004 Regulations, did not define the term "offence report." The court agreed with the reasoning that the date of knowledge gained by the Commissioner, through any communication such as a show cause notice or order-in-original, should be construed as the date of receipt of the offence report. The court also noted that the draft amendments to the 2013 Regulations defined "offence report" in a manner consistent with the petitioner's interpretation. Conclusion: The court allowed the writ petition, quashing the show cause notice dated 14.07.2017 as it was issued after the 90-day limitation period from the date of receipt of the offence report. Consequently, the order confirming the suspension dated 12.06.2017 became ineffective and infructuous. The court clarified that the quashing of the show cause notice was on technical grounds and not on merits, and it would not affect the examination and decision of violations under the Customs Act for which a separate show cause notice had been issued. The writ petition was disposed of without any order as to costs.
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