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2020 (3) TMI 438 - HC - CustomsRevocation of CHA License - time limitation - allegation that revoking the Customs Broker Licence of the Respondent/Customs Broker was beyond the Statutory Limitation Period - violation of Regulation 20 of the Customs Brokers Licensing Regulations, 2013 - HELD THAT - The issue whether these limitations prescribed in various Sub Regulations of Regulation 20 are to be strictly followed in the mandatory sense or not had already engaged the law Courts in a quite number of cases. Similar issue came up before a Coordinate Bench of this Court in the matter of SANTON SHIPPING SERVICES VERSUS THE COMMISSIONER OF CUSTOMS, THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL 2017 (10) TMI 621 - MADRAS HIGH COURT . The Coordinate Bench of this Court, wherein one of us is Party (R.Suresh Kumar, J.), having considered a number of decisions of various High Courts, have concluded that, the CHALR-2004 i.e., the erstwhile Regulation which dealt with the Customs Broker Licence and that was replaced subsequently by the present CBLR, 2013, is a Mandatory Regulation. The time limits in CBLR, 2013 is mandatory, therefore, it has to be strictly followed.. In the case in hand, at the three check points viz., under Regulation 20(1), 20(5) and 20(7), whether the Revenue has passed the test of limitation and if not, where it failed, has to be gone into? - HELD THAT - On 09.06.2017, Offence Report was generated or sent by the Customs Authorities to the Appellant/Revenue pursuant to which show cause notice under Regulation 20(1) was issued on 06.09.2017, in between there were only 87 days, therefore, in the first stage, the Revenue passed the test of limitation. At the second stage, since the show cause notice was issued on 06.09.2017, the Revenue should have prepared and sent the Enquiry Report under Regulation 20(5) on or before 05.12.2017, the fact remains that, such Enquiry Report was sent on 29.11.2017 and in between there were only 83 days, therefore, the Revenue in the second stage also has certainly passed the test of limitation. The issue now revolves only in a very narrow compass, i.e. whether the Revenue passed the third stage of limitation which comes under Regulation 20(7) of CBLR, 2013 or not? - HELD THAT - Again the dates are, the Enquiry Report is dated 29.11.2017 under Regulation 20(5), however, the Order-in- Original or revocation of licence was passed either on 08.05.2018 or 09.05.2018, in between there were 159 days, therefore, certainly it is beyond the 90 days limitation, as has been prescribed under Regulation 20(7) - Merely because of this 159 days in between these two dates, as referred to above, whether we can straight away construe that the final order of revocation of licence passed by the Revenue was beyond the 90 days limitation and therefore, the Order in entirety shall go only on the ground of limitation. In this context only, we should look into the facts of the case, which are very much essential to see the real reason or real happenings to know whether the Revenue has failed in their duty to strictly adhering the time limit of 90 days or the Respondent/Customs Broker has made the Revenue to wait for a particular period unmindful of the 90 days limitation. On 12.02.2018, the Respondent/Licensee appeared before the Appellant/Revenue and after having taken note of the limitation factor as well as the merits of the case, he has made a request to keep the matter in abeyance to avail the orders to be passed on the main issue against Customs Department and that order was expected to be in their favour. The said request was recorded by the Revenue in the Note file dated 12.02.2018 during the hearing - the said arrangement of keeping the file in abeyance for some time awaiting the orders to be passed in the main issue initiated by the Customs Department where also the Respondent/Licensee was the party, was made only at the instance of the Respondent, and the said time where the present issue was kept in abeyance as per the request of the Licensee, definitely shall be reduced from the overall 90 days limitation period provided under sub-regulation (7) of Regulation 20 of CBLR, 2013. For the said arrangement, which had been made purely on the request of the Petitioner, one Mr.Padmanabhan, Managing Director of the Respondent/Licensee has signed it in the very Note file itself on 12.02.2018. Therefore, it has become very apparent and obvious that, it is not the Revenue, who kept the file, without passing the final order under Regulation 20(7) within the 90 days limitation period and it has been kept pending only at the instance of the Respondent/Licensee. Here in the case in hand, insofar as the first two limitation stages are concerned, as discussed, the Revenue had been very cautious and strictly followed the limitation period in issuing show cause notice as well as preparing and sending the Enquiry Report - Insofar as the third stage of limitation i.e. for passing final order of revocation of licence or imposing penalty order against the Customs Broker, though the Revenue had been very conscious about the limitation, it was triggered by the voluntary action and request made by the Respondent/ Customs Broker alone, who made the Revenue to keep the file in abeyance, therefore, in the present case, there is absolutely no material to come to a conclusion that, the Revenue has failed in strictly adhering the limitation period under Regulation 20(7) of CBLR, 2013. Here in the case in hand, the mandatory requirement of the limitation has never been ignored by the Revenue. Even in respect of the 90 days limitation under Regulation 20(7) of CBLR, 2013, the Revenue was very conscious and was very particular about the limitation within which, they wanted to pass the final order. However, it was the Respondent/Custom Broker/Licensee should voluntarily given up its right to insist the limitation clause by making a request to the Revenue to keep the file in abeyance awaiting the orders to be passed in the related/parallel proceedings initiated by the Customs Authorities where the Licensee expected some favourable orders. The Revenue has not failed in following the time schedule or limitation which is mandatory one, as has been declared by the Courts of law in number of decisions referred to above, but the Respondent/Licensee made the Revenue to wait for some time only to get some benefits on its own awaiting some orders to be passed in the parallel proceedings initiated by the Customs Authorities - Since these aspects have not at all attempted to be considered by the CESTAT in the impugned order, we are fully satisfied that, the given facts and circumstances of the case in hand, makes it abundantly clear that, the order of the CESTAT is liable to be interfered with. As we aware that the Tribunal since has passed the impugned order only on the basis of limitation and merits of the issue since has not been discussed, we are constrained to remit this matter to the CESTAT for fresh hearing to decide the issue on merits without going into the limitation point. The matter is remitted back to the CESTAT for fresh consideration, of course, only on the merits of the issue, not on the ground or point on limitation under Regulation 20 of CBLR, 2013 - petition allowed by way of remand.
Issues Involved:
1. Legality of the revocation of the Customs Broker Licence. 2. Compliance with the statutory limitation period under Regulation 20 of the Customs Brokers Licensing Regulations, 2013 (CBLR, 2013). 3. Validity of the CESTAT’s decision based on the limitation period. 4. Application of the doctrine of waiver and acquiescence. Issue-wise Detailed Analysis: 1. Legality of the Revocation of the Customs Broker Licence: The Respondent, a Customs Broker, had their licence revoked by the Appellant/Revenue due to alleged involvement in smuggling restricted goods. The Customs Authorities issued a show cause notice detailing the Respondent's role in attempting to amend the Bill of Entry to include a restricted item, "Chloro di fluoro methane," which was not originally declared. The Customs Authorities found that the Respondent abetted the smuggling by not informing them about the importer's lack of a necessary licence and by failing to verify the client's antecedents. 2. Compliance with the Statutory Limitation Period under Regulation 20 of CBLR, 2013: The CESTAT set aside the revocation order on the ground that it was issued beyond the statutory limitation period prescribed under Regulation 20 of CBLR, 2013. Regulation 20 stipulates three specific time limits: - 90 days for issuing a show cause notice from the date of receipt of an offence report (Regulation 20(1)). - 90 days for submitting the Enquiry Report from the date of the show cause notice (Regulation 20(5)). - 90 days for passing the final order from the date of the Enquiry Report (Regulation 20(7)). The High Court confirmed that the first two stages of limitation were adhered to by the Revenue but found that the final order was issued 159 days after the Enquiry Report, exceeding the prescribed 90 days. 3. Validity of the CESTAT’s Decision Based on the Limitation Period: The High Court examined whether the timelines under CBLR, 2013 are mandatory or directory. It referenced multiple precedents, including decisions by various High Courts and the CESTAT, which established that the timelines are mandatory. The High Court reiterated that the time limits in CBLR, 2013 must be strictly followed, aligning with the settled legal position. 4. Application of the Doctrine of Waiver and Acquiescence: The High Court found that the delay in issuing the final order was due to the Respondent's own actions. The Respondent requested the Revenue to defer the proceedings, awaiting the outcome of related cases. The Respondent explicitly agreed that the period during which the matter was kept in abeyance would be excluded from the 90-day limitation period. This agreement was documented and signed by the Respondent. The High Court applied the principles of waiver and acquiescence, concluding that the Respondent intentionally relinquished their right to insist on the limitation period. Consequently, the delay was attributed to the Respondent's conduct, not the Revenue's inaction. Conclusion: The High Court set aside the CESTAT’s order, remitting the matter back to the CESTAT for fresh consideration on merits, excluding the limitation point. The substantial questions of law were answered in favor of the Revenue, emphasizing that the Respondent's actions led to the delay, and thus the mandatory limitation period was not violated by the Revenue. The appeal was allowed, and the case was directed to be decided on merits by the CESTAT.
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