2021 (8) TMI 1229 - HC - Customs

Revocation of Customs Brokers license - smuggling of Red Sanders - CESTAT set aside the proceedings on the ground of delay in inquiry - link between the smuggling of red sanders - activities for which the Respondent herein was licensed or not - HELD THAT - The CESTAT has referred to the decision in the case of M/S UNISON CLEARING PVT LTD VERSUS COMMISSIONER OF CUSTOMS (GENERAL) MUMBAI 2015 (7) TMI 881 - CESTAT MUMBAI to give a finding that the delay in commencement of the proceedings for revocation of licence does not command itself as indicative of proper undertaking of responsibility and that the delay in commencement of the proceedings for revocation of licence was not justifiable. It has also observed that there is an implicit responsibility on the part of the competent authority to adhere to the timelines with acceptable justification for delays, if any. The Tribunal has referred to that although the suspension was withdrawn on 11th January, 2017, another 15 days had elapsed for inquiry proceedings to commence and, thereafter there was a lapse of more than six months in completion of inquiry and a further lapse of more than two months in revocation of the licence, whereas the incident had its origin in November, 2015. The Tribunal completely erred in ignoring the true import and misread the binding decision of this court. We observe that the Tribunal has failed to consider the detailed submissions as sought to be made out on behalf of the parties and without even dealing with the detailed explanation as well as the necessary facts, allowed the appeal of Respondent. The Tribunal ought to have discussed each of the submissions before coming to any conclusion. Whether, on the facts and in the circumstances of the case, the CESTAT was right in holding that there is no link between the smuggling of red sanders by Shri Vijay Poojary with the activities for which the Respondent herein was licensed? - HELD THAT - The Tribunal has nowhere discussed any of the factual aspects raised on behalf of the Revenue either as contained in the Show Cause Notice or in the Order-in-Original. There is no discussion on the alleged smuggling of red sanders nor any discussion in the various statements recorded under Section 108 of the Customs Act or the admission of Vijay Poojary or the modus operandi or as to Respondent s involvement, investigations on various firms alleged to be used for the alleged smuggling activities, the fact of detention of Shri Vijay Poojary under COFEPOSA Act, the investigation with respect to the DEPB Scheme, the involvement of various customs firms/companies and the statement of various persons recorded under Section 108 of the Customs Act 1962 regarding destruction of post shipment documents, the factum of unrecorded exports, the alleged forgery and fabrication of documents, the admission of Shri Vijay Poojary that he was involved in smuggling of red sanders. It is incomprehensible as to how in the light of the factual submissions discussed above and without any discussion on the same, a factual finding is recorded stating that there is no link between the smuggling of Red Sanders by Shri Vijay Poojary with the activities for which Respondent was licenced - It is also surprising that without any detailed discussion, absence of link is being given as the reason for the delay in completion of the proceedings. The matter is remanded back to the CESTAT for fresh adjudication - Appeal allowed by way of remand.

Summary

Issues Involved:
1. Delay in completion of proceedings for revocation of license.
2. Link between the smuggling activities of Shri Vijay Poojary and the licensed activities of the Respondent.

Detailed Analysis:

1. Delay in Completion of Proceedings for Revocation of License:
The first issue revolves around whether the delay in the proceedings for revocation of the license vitiates the Order-in-Original dated 28.03.2019 passed by the Commissioner of Customs (General). The Tribunal had referred to the decision in Principal Commissioner of Customs (General), Mumbai Vs. Unison Clearing P. Ltd., which states that the timelines in Regulation 20 of the CBLR are directory, not mandatory. The Tribunal observed that there was an implicit responsibility on the competent authority to adhere to the timelines with acceptable justification for delays. However, the Tribunal failed to consider the detailed submissions and explanations provided by the Revenue for the delay.

The High Court noted that the Tribunal did not address the delay in the conclusion of the proceedings and failed to consider the detailed explanations for the delay furnished by the Revenue. The High Court emphasized that the timelines in Regulation 20 should be considered directory, and deviations should be justified with reasons. The Tribunal's interpretation was found to be erroneous, and the High Court highlighted the necessity of discussing each submission before arriving at a conclusion.

2. Link Between the Smuggling Activities and Licensed Activities:
The second issue pertains to whether there was a link between the smuggling activities of Shri Vijay Poojary and the licensed activities of the Respondent. The Tribunal concluded that there was no link between the smuggling of red sanders by Shri Vijay Poojary and the activities for which the Respondent was licensed. However, the High Court observed that the Tribunal did not discuss the factual aspects raised by the Revenue, including the statements recorded under Section 108 of the Customs Act, the admission of Shri Vijay Poojary, and the involvement of various firms in the smuggling activities.

The High Court found it incomprehensible that the Tribunal could conclude the absence of a link without discussing the detailed factual submissions and evidence. The High Court also noted that Shri Vijay Poojary held 99.9% of the shares in the Respondent company, indicating his control over the company, which needed to be considered while determining his link with the Respondent.

Conclusion:
The High Court set aside the Tribunal's order dated 21st November 2019 and remanded the matter back to the CESTAT for fresh adjudication, taking into account all the aspects to arrive at a proper decision. The High Court emphasized the necessity of a detailed discussion on the submissions and evidence before arriving at a conclusion. The appeal was disposed of in these terms with no order as to costs.