2021 (6) TMI 802 - HC - Customs

Interim suspension of the operation of Customs Broker's License - Time limitation - HELD THAT - The date of acknowledgement of the offence report is relevant date to be considered for the purpose of initiation of action for revocation of license by following the procedures contemplated under the Customs Brokers Licensing Regulations - In the present case, the show cause notice issued on 16.09.2015 and the order in original, imposing penalty issued on 22.03.2016, and therefore, the license issuing authority was nothing to do with that proceedings. Only when the penalty imposed was communicated to the License Issuing Authority at Chennai, they are empowered to institute action under the provisions of the Customs Brokers Licensing Regulations - In the present case, admittedly, the interim order of suspension was issued on 08.08.2016 under Regulation 19. Carefully considering the relevant dates and the receipt of offence report by the first respondent / License Issuing Authority, this Court is of an opinion that the period of limitation for initiation of action under the regulation is to be reckoned from 01.07.2016, the date on which the offence report had been received by the License Issuing Authority / the Commissioner of Customs, Chennai. This being the factum, the impugned interim suspension order was issued on 08.08.2016 and the impugned show cause notice was issued on 28.09.2016. These proceedings were instituted within a period of 90 days. Thus, the orders cannot be said to be violative by the time limit prescribed under the Regulations. This Court is of the considered opinion that normally a writ against a show cause notice is not entertainable. As far as the interim order of suspension is concerned, the writ petitioner is continuing its operation for about 4 years and therefore, the interim order of suspension lost its relevance. Thus, the interim order of suspension need not be restored and the respondents are permitted to continue the proceedings based on the show cause notice issued on 28.09.2016 and take a decision and pass final orders. As the respondents could able to establish factually that the offence report was communicated to the License Issuing Authority on 01.07.2016, the action initiated by issuing interim suspension order and show cause notice dated 28.09.2016 are well within the period of limitation as contemplated under the Regulations and there is no infirmity as such - However, the interim order of suspension issued need not be given effect to as the petitioner is operating continuously for about 4 years, after the issuance of interim suspension order. But in respect of the impugned show cause notice, the petitioner is at liberty to submit their explanations along with the relevant documents and evidences and participate in the process of enquiry. The respondents are directed to proceed with the enquiry by affording opportunity to the writ petitioner as expeditiously as possible and dispose of the enquiry proceedings preferably within a period of six months from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues Involved:
1. Validity of the interim suspension of the Customs Broker's License.
2. Validity of the Show Cause Notice issued beyond the prescribed time limit.
3. Adherence to the time limits prescribed under the Customs Broker Licensing Regulations.

Detailed Analysis:

1. Validity of the interim suspension of the Customs Broker's License:

The petitioner, a Public Limited Company operating as Customs Brokers, challenged the interim suspension of their Customs Broker's License issued on 08.08.2016. The court noted that the interim suspension order was issued within the period of limitation as the offence report was received by the License Issuing Authority on 01.07.2016. Consequently, the interim suspension order issued on 08.08.2016 was within the 90-day limit. However, since the petitioner continued operations for about 4.5 years due to an interim order, the suspension order lost its relevance and need not be restored.

2. Validity of the Show Cause Notice issued beyond the prescribed time limit:

The petitioner contended that the Show Cause Notice issued on 28.09.2016 was beyond the prescribed time limit of 90 days from the offence report dated 16.09.2015. The court examined the timeline and found that the offence report was communicated to the License Issuing Authority on 01.07.2016. Therefore, the issuance of the Show Cause Notice on 28.09.2016 was within the 90-day period from the receipt of the offence report, making it valid.

3. Adherence to the time limits prescribed under the Customs Broker Licensing Regulations:

The court emphasized the mandatory nature of the time limits prescribed under the Customs Broker Licensing Regulations, as supported by various judgments, including A.M.Ahamed & Co. Vs. Commissioner and Sabin Logistics Private Limited Vs. Commissioner of Customs. The court noted that the time limit for initiating action should be reckoned from the date the offence report is received by the License Issuing Authority. In this case, the offence report was received on 01.07.2016, and both the interim suspension order and the Show Cause Notice were issued within the prescribed 90-day period.

Conclusion:

The court concluded that the interim suspension order and the Show Cause Notice were issued within the prescribed time limits and were valid. The interim suspension order need not be restored due to the petitioner's continued operations. The respondents were directed to proceed with the enquiry based on the Show Cause Notice and dispose of the proceedings within six months, allowing the petitioner to submit explanations and evidence.

Final Order:

Both writ petitions were disposed of with no order as to costs, and the connected miscellaneous petitions were closed.