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TMI Blog2017 (10) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, this mandatory requirement of the limitation can be ignored. It is not the case of the 1st respondent that the 90 days limitation contemplated under Regulation 22(1), is directory. It is also not the case of the 1st respondent that the show cause notice was issued within the limitation period of 90 days from the date of offence report - Since the offence report was dated 22.9.2010 and the show cause notice, admittedly, was issued only on 18.11.2011, there can be no doubt that the said show cause notice was issued well beyond the period of limitation of 90 days. The Revenue has not issued the show cause notice dated 18.11.2011 within the period of limitation prescribed under Regulation 22(1) CHALR, 2004 and thus, the consequent proceedings involving revocation of the appellant's CHA licence and forfeiture of its security deposit, is unlawful. Appeal allowed - decided in favor of appellant-assessee. - C.M.A. No. 730 of 2016 and C.M.P. No. 5921 of 2016 - - - Dated:- 13-10-2017 - Rajiv Shakdher And R. Suresh Kumar, JJ. For the Appellant : Mr.G.Derrick Sam For the Respondents : Mrs. R. Hemalatha JUDGEMENT ( Judgment of the Court was delivered by R. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction was, infact on the basis of intelligence report, intercepted, consequent there to investigation was launched by the DRI. (iv) The said goods were examined on 16.9.2010 and 17.9.2010 at Sanco Container Freight Station and it was found that the goods were used rail / railway sleeper not scrap metal HMS 1 2, as declared by the importer, in the bill of entry. (v) In view of the said mis-declaration, the Commissioner of Customs (Imports), Chennai, by proceedings dated 30.09.2010 issued an order against the appellant, prohibiting him from operating as Custom House Agent at Chennai Custom jurisdiction. (vi) Consequent upon the aforesaid action, the first respondent by his proceedings dated 04.10.2010 suspended the CHA license of the appellant as the said license was originally issued by the Tuticorin Customs Commissionerate. (vii) Thereafter, by further proceedings dated 07.10.2011, the first respondent by invoking Regulation 20(3) of the Custom House Agent Licensing Regulations, 2004 (hereinafter referred to as, 'CHALR') passed an order of continuation of suspension of licence of the appellant, until further orders. (viii) Subsequently, the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal, where, the facts of the case, in brief has been given. 5. Insofar as the grounds raised by the appellant, the reply of the first respondent, through the counter is, that the appellant has violated the various conditions of Regulation 13 of the CHALR, 2004. The main contention in the counter and the case of the first respondent is that, as per the Bill of Entry dated 02.09.2010, the description of the goods imported was Scrap Metal (HMS 1 2) which falls under CTH 72044900. The value was declared as ₹ 41,10,251/- @ 170 US $ per metric tonne. Based on such declaration of the goods to be imported, the importer had also claimed the exemption under customs Notification No. 21/2002 S.No.200. The said containers were lying in SANCO CFS. While so, the DRI had sent information to the Deputy Commissioner (Docks) incharge of SANCO CFS vide DRI letter dated 09.09.2010 to have examination of the goods covered under the said Bill of Entry in the presence of the officers of the DRI. The examination of the goods took place on 16.9.2010 and 17.9.2010 and it was revealed that all the 20 containers contained used rail / railway sleepers as against the declared items, namely, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to A.O. ICBC, then scored out 'ICBC' and marked it to A.O. GATEWAY for 100% examination by destuffing of specified containers. Our client, in his statements has explained that he was in Mumbai at the relevant time. In any case, assigning an officer for examination of the cargo was an administrative exercise by the D.C. (Docks) over which our client had no role and he was stationed in Chennai normally (he works from Tuticorin) and, it is not disputed that, in fact, at the relevant time our client was in Mumbai. Our clients' employees have explained to him that the endorsement taken for the second time was taken by mistake. As such, this was a human error. It had no consequence to the Customs Revenue, as it was only a procedure for examination of the goods. Obviously, the D.C.(Docks) was administratively allocating the work to different officers not necessarily in the same CFS. Fairly, no malafides are alleged on our client on this account in the show cause notice. Hence, this is an occurrence of no material consequence. In other words, our clients did not act with any motive. Nothing to the contrary is even alleged in the show cause notice. Submission of documents at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt whether the Customs House Agent desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. Provided that the procedure prescribed in regulation 22 shall not apply in respect of the provisions contained in sub-regulation (2) to regulation 20. 14. He also relied upon Regulation 20(1) which reads thus: 20. Suspension or revocation of licence'- (1) The Commissioner of Customs may, subject to the provisions of regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, ..... 15. The learned counsel for the appellant would further submit that, insofar as the case of the appellant is concerned, the DRI had sent offence report dated 21.9.2010, pursuant to which only, order of prohibition dated 30.9.2010 was passed by the Commissioner of Customs, Chennai, and the appellant's CHA licence was suspended on 04.10.2010 by the first respondent. The said suspension order was directed to be continued by the Order-in-Original of the first respondent dated 07.10.2011. 16. He would further state that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders for revocation of licence of the appellant is without jurisdiction in that the show cause notice for the same was issued beyond the mandatory time limit of 90 days as fixed by Regulations 20(1) of the CHALR, 2004? 20. Though the learned counsel appearing for the appellant has made submissions on merits on other issues raised in the instant appeal, since he has raised this jurisdictional issue in terms of Regulation 22 of the CHALR, 2004 as the main ground, he has relied upon the following decisions in support of the said contentions: (i) Sanco Trans Ltd Vs. Commissioner of Customs (Seaport/Import), Chennai [2015 (322) E.L.T. 170 (Mad.)] (ii) Commissioner of Customs (Seaport/Import), Chennai Vs. Sanco Trans Ltd [2016 (334) E.L.T. 274 (Mad.)] (iii) Overseas Air Cargo Service Vs. Commissioner of Customs (General), New Delhi [2016(340) E.L.T.119 (Del.)] (iv) Indair Carrier Pvt. Ltd Vs. Commissioner of Customs (General) [2016(337) E.L.T.41.(Del.)] (v) Commissioner of Customs (General) Vs. S.K. Logistics [2016(337) E.L.T.39(Del.)] (vi) Sunil Dutt Vs. Commissioner of Customs (General), NCH [2016(337) E.L.T.162(Del.)] (vii) Impexnet Logistic Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting authority vide para 16 to para 24, wherein, it is clearly said that once the goods are found to be misdeclared by the importer, and the same was ordered for detailed examination on 02.09.2010 from D.C.Customs, SANCO CFS. Whereas, we find that the CHA prepared another set of documents and got the endorsement for examination of goods from another D.C. Customs located at different CFS i.e. Gateway CFS on 09.09.2010. He submitted the said documents for examination at Gateway CFS where the goods were not lying and obtained the examination report. Whereas the goods are actually lying under SANCO CFS, which was to be examined by D.C.Customs of that FS. Thus, it clearly proves the involvement of CHA and his employees. CHA cannot plead innocence. 26. The learned standing counsel would also submit that in support of the conclusion reached by the Tribunal, the CESTAT has heavily relied upon Shri Kamakshi Agency Vs. Commissioner of Customs, Madras [2001 (129) ELT 29 (Mad)]. In the said Judgment, the role of a CHA has been clearly spelt out and if we apply the said principles as enunciated in Kamakshi's case as has been rightly applied by the CESTAT in the impugned Judgment, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid question, the Judgments relied upon by the learned counsel appearing for the appellant can be adverted to. In Sanco Trans Ltd Vs. Commissioner of Customs (Seaport/Import), Chennai, 2015 (322) E.L.T 170 (Mad.) (supra), a learned Judge of this Court has dealt with almost similar situation, as in that case, the offence report was received on 29.8.2012 and the show cause notice was issued on 05.3.2015. Therefore, invoking the mandatory requirement of Regulation 22(1), the learned Judge held that, the said show cause notice was beyond the limitation period. 33. The said Judgment referred to above, when, appealed, was confirmed by a Division Bench of this Court in Commissioner of Customs (Seaport/Import), Chennai Vs. Sanco Trans Ltd, 2016 (334) E.L.T. 274 (Mad.) (supra). In another Judgment of the Division Bench of the Delhi High Court, in Overseas Air Cargo Service Vs. Commissioner of Customs (General), New Delhi, 2016 (340) E.L.T. 119, (Del.) (supra), the Division Bench following Indair Carrier Pvt. Ltd Vs. Commissioner of Customs(General), 2016 (337) E.L.T. 41 (Del.) (supra) has allowed the contention that the limitation prescribed under CHALR, 2004 had to be mandatorily fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Associates 2016 (334) E.L.T. A50 (Mad.). 35. Almost similar view has been taken consistently by the Division Bench of Delhi High Court in Commissioner of Customs (General) Vs. S.K. Logistics, 2016(337) E.L.T.39(Del.), and Sunil Dutt Vs. Commissioner of Customs (General), NCH, 2016(337) E.L.T.162(Del.) 36. In Impexnet Logistic Vs. Commissioner of Customs (General), 2016 (338) E.L.T. 347 (Del.), the same Division Bench while taking the same view, has held as follows: 8. Recently by an order dated 24th April, 2016 in W.P.(C) No. 1734/2016 [HLPL Global Logistics Pvt. Ltd.v. The Commissioner of Customs (General)][2016(338) E.L.T.365 (Del.)] this Court reiterated that the time-limits in Regulation 20 of the CBLR/Regulation 22 of the CHALR are sacrosanct. 9. Admittedly, the SCN under the CHALR/CBLR in the present case was issued only on 9th December, 2013, i.e., beyond the mandatory period of 90 days from the date of receipt of the offence report by the Respondent, i.e., 31st January, 2013. Consequently, all proceedings pursuant thereto are held to be invalid. Further, even the enquiry report was not submitted within a period of 90 days of the issuance of the SCN. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll in Regulation 11 as mandatory and not directory. Therefore, when a time limit is prescribed in Regulations, which empowers action in Regulation 18 and procedure in Regulation 20 (1), the use of the term shall cannot be termed as directory. It is pertinent to mention here that the CBLR, 2013 have replaced the CHA Regulations. The CHA regulations did not have any time limit to complete the proceedings. Therefore, by a Circular 09/2010 dated 08.04.2010, the necessity to include a time limit for initiating action was addressed by the Board after field inspection and by a notification dated 08.04.2010, amendments prescribing time period for initiating action and completing proceedings was made. The same was given effect by notification dated 20.01.2014. Whereas, under the CBLR, 2013 having found the necessity to prescribe a period, the Central Board, the statutory authority had included the same in the Regulations itself, when they were brought into force. Therefore, when a time limit is prescribed in Regulations, which empowers action under Regulation 18 by following the procedure in Regulation 20 (1), the use of the term shall cannot be termed as directory. Under such circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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