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TMI Blog2018 (6) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... lation 2013 deal with the power to revoke a licence granted. Both the Regulations stipulate time limits. None of the Regulations, however, provide for the consequence of not adhering to the time limit prescribed. The consequence of non-adherence to the time limit being not provided for in either of the two Regulations, it is open to an interpretation that, the time limits prescribed are not mandatory. The fact that, the order in original dated February 25, 2015 was received by the authority concerned, invoking the provisions of the Regulations of 2004 on March 27, 2017, is not disputed on behalf of the petitioner. Nothing to the contrary is established by the petitioner. The show-cause notice under the Regulations of 2004 was issued on June 23, 2017. The impugned show-cause notice is, therefore, within the period of 90 days from the date of receipt of the order in original dated February 25, 2015, and the same can be considered as the offence report for the purposes of Regulation 22 of the Regulations of 2004, in the facts of the present case - in the facts of the present case, the show-cause notice issued on June 23, 2017 cannot be said to be barred by limitation. The show-caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by limitation. The issue of limitation is an issue of jurisdiction. A writ petition on such an issue is maintainable. He relies upon 2017 (355) Excise Law Times page 30 (Cal) (Indo-Foreign (Agent) Pvt. Ltd. v. Union of India) in support of his contentions. In support of the contention that, the show-cause notice dated June 23, 2017 is barred by limitation, learned Advocate for the petitioner relies upon 2015 (322) Excise Law Times page 170 (Madras) (Sanco Trans Ltd. v. Commissioner of Customs, Sea Port/Imports, Chennai), 2016 (337) Excise Law Times page 39 (Commissioner of Customs (General) v. S.K. Logistics), 2016 (337) Excise Law Times page 41 (Del.) Indair Carrier Pvt. Ltd. v. Commissioner of Customs (General)) and 2016 (340) Excise Law Times page 119 (Del.) (Overseas Air Cargo Services v. Commissioner of Customs (General), New Delhi). Learned Advocate for the petitioner refers to the show-cause notice as also the impugned order, without prejudice to the point of limitation raised. He submits that, it would appear from the impugned show-cause notice and the impugned order that, the adjudicating authority travelled beyond the show-cause notice in imposing the penalty as done. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner. In any event, the time period specified in the Customs House Agents Licensing Regulations, 2004 and in the Customs Brokers Licensing Regulations, 2013 are directory rather than mandatory. In support of such contention, he relies upon 2017 Volume 2 West Bengal Law Reporter page 221 (M/s. Asian Freight (Unit of Esan Freight Travel Pvt. Ltd.) Anr. v. The Principal Commissioner of Customs (Airport Administration), Customs House Anr.) and 2018 Supreme Court Cases Online (Bom) page 753 (The Principal Commissioner of Customs (General) Mumbai v. Unison Clearing Pvt. Ltd.). He contends, relying upon 2016 (337) Excise Law Times page 54 (Aditya Ganguly v. Union of India) that, the adjudicating order can be treated as the offence report. Therefore, according to him, the authorities have acted within the time specified and that, there is no irregular exercise of jurisdiction by any authority in issuing the show- cause notice or imposing the penalty as sought to be done. The issues that arise for consideration, are as follows:- (i) Is a writ petition challenging an order in original on the ground of lack of jurisdiction maintainable, despite the availability of statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. The show-cause notice was issued to the petitioner by invoking the provisions of the Customs House Agents Licensing Regulations, 2004. The impugned order relies upon the Customs Brokers Licensing Regulations, 2013 apart from the Regulation of 2004. Both the two Regulations specify time limits for the purpose of executing the various steps enumerated therein. The relevant Regulations of the Regulations of 2004 are Regulations 20 and 22 which are as follows:- 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, on any of the following grounds, namely :- (a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under regulation 10; (b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else; (c) any misconduct on his part, whether within the jurisdiction of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs House Agent, for the purpose of ascertaining the correct position. (4) The Customs House Agent shall be entitled to cross- examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs shall prepare a report of the inquiry recording his findings and submit his report within ninety days from the date of issue of a notice under sub-regulation (1). (6) The Commissioner of Customs shall furnish to the Customs House Agent a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, and shall require the Customs House Agent to submit, within the specified period no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on tendering evidence for or against the Customs Broker, for the purpose of ascertaining the correct position. (4) The Customs Broker shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings, and where the Deputy Commissioner of Customs or Assistant Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. (5) At the conclusion of the inquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall prepare a report of the inquiry and after recording his findings thereon submit the report within a period of ninety days from the date of issue of a notice under sub-regulation (1). (6) The Commissioner of Customs shall furnish to the Customs Broker a copy of the report of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, and shall require the Customs Broker to submit, within the specified period not being less than thirty days, any representation that he may wish to make against the said report. (7) The Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as High Court which are of the same view as to the mandatory nature of the time period specified in Regulation 22 of the Regulations of 2004 as that of Sanco Trans Ltd. (supra). While dealing with such authorities in context of the issue whether the limit period specified is mandatory or directory, M/s. Asian Freight (Unit of Esan Freight Travel Pvt. Ltd.) Anr. (supra) makes the following observations:- 40. The reported decisions of the Madras High Court cited by Mr. Saraf do advance his cause. However, both on facts as well as in law, this Bench is persuaded to take a different view of the matter. 41. It is settled by a catena of decisions rendered by the Supreme Court, while considering varying statutes, that when a public functionary is required by a statute to do or perform a certain thing or activity within a specified time, the same is ordinarily directory; however, if the consequence for inaction on the part of the statutory authority within such specified time is expressly provided in the statute, it must be held to be imperative. Reference may be made in this connection to the decisions reported in (2007) 8 SCC 705 (Indore Vikas Pradhikaran v. Pure Industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show notice were held mandatory instead of holding it to be directory, it is well-nigh difficult to conclude that unless revocation proceedings are initiated within ninety days of receipt of an offence report, the principal commissioner or the commissioner of customs, as the case may be, would stand denuded of the power to proceed in that direction. This Bench is of the opinion that the time-limit that has been prescribed serves a dual purpose. First, it acts as a check on the public functionary vested with the power to initiate revocation proceedings not to keep the issue pending ad infinitum; if proceedings are not initiated within the stipulated time, that might expose such functionary empowered to initiate proceedings to disciplinary action. On the other hand, initiation of proceedings within ninety days or immediately thereafter is intended to guarantee protection to a customs broker of not being proceeded against on the basis of stale charges. But to hold that in every case where revocation proceedings are not initiated within the time-limit in regulation 20(1) a customs broker may get away, is too far- fetched a construction and is unacceptable. What is important is that reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther expressed the view that if timely action is not taken under regulation 20, that would also pave way for inaction by the officials breeding corruption . Yes, indeed, but viewed from a different angle one cannot ignore the ground realities. If an unscrupulous broker commits an act that makes it liable to be proceeded against under regulation 18 read with regulation 20, it may well get away by adopting illegal means. All officers are not honest and if too strict a view is taken on the aspect of time-limit mentioned in regulation 20(1), the same instead of suppressing the mischief would have the potential of promoting illegal activities. This Bench is persuaded to take this view bearing in mind the illuminating observations in Dalchand (supra). 47. Interestingly, the decision of the Supreme Court reported in AIR 1980 SC 303 (Sharif-ud-din v. Abdul Gani Lone) was noticed by the learned Judge while authoring both the decisions and a passage therefrom is found to be quoted in the same. The last sentence from the quoted passage is relevant and reads thus: Whenever a statute prescribes that a particular act is to be done in a particular manner and also lays down that failu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court to hold the time of 3 months is not mandatory. 51. This Bench thus doubts as to whether the three decisions of the Madras High Court relied on by Mr. Saraf lay down correct law, and holds the time limit in regulation 20(1) as not mandatory, and that any proceeding for revocation of a customs broker's license beyond ninety days of receipt of offence report would not per se stand invalidated by mere reason of such belated initiation. (emphasis supplied) S.K. Logistics (supra) considers the conduct of the Inquiry Officer pursuant to the show-cause notice and is of the view that, the department did not explain the delay in not adhering to the time period of 90 days stipulated in Regulation 22(5) of the Regulations of 2004. Overseas Air Cargo Services (supra) notices Indair Carrier Pvt. Ltd. (supra) and is of the view that, the time limits prescribed in the Regulations of 2004 for the issuance of show-cause notice and completion of enquiry within 90 days from the issuance of show-cause notice are sacrosanct. It, however, does not consider any of the Supreme Court decisions cited in M/s. Asian Freight (Unit of Esan Freight Travel Pvt. Ltd.) Anr. (supra). Regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Customs House Agents licence beyond ninety days of receipt of the offence report would not per se stand invalidated by mere reason of such belated initiation. The Division Bench of the Bombay High Court in Unison Clearing Pvt. Ltd. (supra) considers the issue whether the timeframe prescribed in Regulation 20 of the Regulation of 2013 is mandatory or directory. It holds that, the time limit contained in Regulation 20 of the Regulations of 2013 cannot be construed to be mandatory but directory. It goes on to say that, the timeline framed in the Regulation need to be rigidly applied, fairness would demand that, when such time limit is crossed, the period subsequently consumed for completing the enquiry, should be justified by giving reasons, and the causes on account of which the time limit was not adhered. M/s. Asian Freight (Unit of Esan Freight Travel Pvt. Ltd.) Anr. (supra) is of a coordinate bench. I find no reason to arrive at a different finding than that of M/s. Asian Freight (Unit of Esan Freight Travel Pvt. Ltd.) Anr. (supra) when it holds that, the time limit of Regulation 20 of the Regulation of 2013 is not mandatory. On a parity of the same reasoning Regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, 2017 and the order of suspension being revoked on May 2, 2017. It also notes that, proceeding under Regulation 20 of the Regulations of 2004 was initiated by issuance of the show-cause notice on June 23, 2017. It records the submission of the report of the Inquiry Officer on September 19, 2017 and the adjudicating authority providing an opportunity of personal hearing on November 9, 2017. There are two aspects to the contention of procedural irregularity vitiating the impugned order, as contended on behalf of the petitioner. One aspect is the investigation not being commenced within the stipulated period of 90 days from the date of the receipt of the offence report, and the other is that, the procedure and time limits engrafted in the Regulations of 2004 or the Regulations of 2013 not being followed. The words offence report is not defined in either the Regulations of 2004 or the Regulations of 2013. Nothing is placed on behalf of the petitioner to suggest otherwise. The authority must have a report before it to arrive at a prima facie finding that, a Customs House Agent governed under the Regulations of 2004 or Regulations of 2013 is guilty of such a misdemeanor, that it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case, the show-cause notice issued on June 23, 2017 cannot be said to be barred by limitation. The show-cause notice being within limitation, the authority acted within jurisdiction in issuing it and adjudicating thereon. The impugned order does not suffer for lack of jurisdiction. The third and the fourth issues are answered accordingly. The show-cause notice dated June 23, 2017 was issued under the Regulations of 2004. The impugned order in original dated November 22, 2017 purports to notice the Regulations of 2013 and arrives at a finding that, the petitioner violated the provisions of Regulation 11(n) of the Regulations of 2013. It proceeds to revoke the licence granted to the petitioner and forfeits the security deposit furnished by it. Regulation 11 of the Regulations of 2013 lays down the obligations of a Customs Broker. Regulation 11(n) of the Regulations of 2013 requires a Customs Broker to verify antecedent, correctness of Importer Exporter Code (IEC) number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. The Regulations of 2004 enumerates the obligation of a Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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