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TMI Blog2019 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... deems it fit, either revoking the suspension or continuing it within15 days from the date of hearing granted to such customs broker. In case, the Commissioner passes an order for continuing the suspension, further procedure thereafter shall have to be followed as provided under Regulation 20. This Court, after considering the scope of the relevant regulation and the time frame fixed therein and also after following the Division Bench decision of the Delhi High Court in IMPEXNET LOGISTIC VERSUS COMMISSIONER OF CUSTOMS (GENERAL) [ 2016 (6) TMI 348 - DELHI HIGH COURT] found that the time limit fixed is mandatory and that the Enquiry Report filed beyond the period of 90 days cannot be considered as a valid report and consequently, further proceedings cannot be allowed to go as a follow up action. No doubt, under the Regulations, it is not specifically stated as to what would follow as a consequence if each and every act contemplated under the Regulations is not done or completed within the prescribed time limit. Merely because the Regulation does not prescribe or spell out expressly or specifically as to what would be the consequence, there could be no presumption that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs House Agents/Customs Brokers. They are issued with licence under the provision of Custom House Agents License Regulations, as existed at the relevant period. Since a common issue is raised in these writ petitions, while challenging the respective impugned proceedings, all these writ petitions are heard together and disposed of by a common order, as hereunder. 2. The relevant facts touching upon the the issue raised in each of the writ petition, are as follows: a) W.P.No.3366/2019- Challenge made is against the Order in Original dated 13.08.2015, revoking the license of the petitioner issued under the Customs Brokers Licensing Regulations, 2013. The points raised in this writ petition are that, i) Enquiry Officer issued the report beyond 90 days from the date of issuance of the show cause notice and ii) The Commissioner has not passed orders within 90 days from the date of the enquiry report and therefore, the impugned order passed beyond the period of limitation cannot be sustained. Thus, the action of the Authorities violated Regulation 20(5) and 20(7) of CBLR, 2013. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .No.22154 of 2019 is against show cause notice dated 20.12.2018. Points raised against the impugned show cause notice are that, i) Enquiry report was not filed within 90 days from the date of show cause notice. Thus, Regulation 17(5) is violated. Show cause notice was issued on 20.12.2018 whereas enquiry report was filed on 30.07.2019. ii) The Commissioner should have passed final order under Regulation 17(7) within 90 days from the receipt of the Enquiry Report. Till this date, no such order is passed, in the absence of any legal impediment against the Commissioner to pass such order. Therefore, entire proceedings are vitiated on the ground of limitation. h) W.P.No.31383 of 2018 is filed against the impugned order of suspension dated 20.11.2018. However, subsequently, a show cause notice for revocation is issued and the same is put to challenge in W.P.No.22154 of 2019. Therefore, the issue raised in this writ petition got merged with W.P.No.22154 of 2019. i) W.P.No.27948 of 2019 : Challenge made in this writ petition is against the show cause notice dated 23.02.2018. The points raised against the impugned show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. 4. The main contention of the petitioners in all these cases is that the time prescribed under the Regulations for doing each act is mandatory and therefore, if no such act is done within the time prescribed, the same cannot be sustained. 5. The crux of the contentions of the petitioners is as follows: a) i) The period of limitation prescribed in the relevant Regulation for doing each act is mandatory and not directory. ii) Even though the Regulations do not provide the consequence event, if the limitation period is not adhered to, the nature of business being done and the action initiated against the petitioners would show that such consequences are obvious and very serious in nature affecting the business and livelihood of the petitioners in toto. iii) When substantial right is affected, the Authorities are bound to comply with the time limit. iv) The order of suspension cannot be perpetuated by not passing the follow up actions within the time prescribed. Therefore, if the time prescribed is not mandatorily followed, the order of suspension would become perpetual. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . When the parent Act does not prescribe any time limit, any stipulation made for time limit in the regulations cannot go beyond the parent Act. The petitioners have violated the conditions of license and therefore, they cannot be the persons affected by the impugned proceedings. It is not a fundamental right to get the license and do the business. Only when the consequence is spelt out in the regulations itself, the time limit prescribed could be treated as mandatory. In W.P.No.27948/2019, the enquiry report was made ready on 23.05.2018 within 90 days from the date of the show cause notice. Because of the petitioner's non-cooperation, the time schedule could not be adhered to. Regulations are only procedural laws and therefore, prescription of time limit therein is only directory. In W.P.No.31383/2018, the time limit is fully complied with. The suspension order was issued within one month from the date of receipt of the offence report. The continuation of the suspension order was issued on 20.11.2018. Therefore, the prayer sought for in W.P.No.31383/2018 challenging the suspension has become infructuous in view of the issuance of the show cause notice on 20.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory, as claimed by the petitioner or directory, as claimed by the respondents. Thus, this Court confines the discussion of the matter only with the above issue by referring to the relevant facts and circumstances and the relevant regulation touching upon the said issue alone. 11. Before answering the above said question, it is better to understand the provisions under the Customs Brokers Licensing Regulations, 2013 and 2018, which are relevant for the present case. There is no dispute to the fact that the relevant provisions under both regulations are pari materia. Thus, it is seen that Regulation 16(1) of 2018 Regulations and 19(1) of 2013 Regulations are pari materia with each other. For the sake of convenience, I refer 2013 regulations. The regulation 19 deals with the suspension of the customs broker license. It reads as follows: 19.Suspension of licence: (1) Notwithstanding anything contained in regulation 18, the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending contemplated. (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question to any person 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an enquiry. Regulation 20(5) stipulates that at the conclusion of the enquiry, the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall prepare a report of the enquiry and after recorded his findings thereon, submit the said report within a period of 90 days from the date of issue of the show cause notice. Thus, it is evident that the 90 days prescribed under Sub Clause (5) of Regulation 20, is not only for preparing the report and also for submitting the same before the Commissioner of Customs within such time. Regulation 20(7) contemplates that the Commissioner of Customs, after considering the report of the enquiry and the representation of the customs broker, shall pass an order either revoking the suspension of the license or revoking the license of the customs broker or imposing penalty, within 90 days from the date of submission of the report by the enquiry Officer. It is further contemplated therein that no order for revoking license shall be passed, unless an opportunity of hearing is given to the customs broker in person by the Commissioner of Customs. 15. Perusal of the above Regulations thus w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epare 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). ` 8. Perusal of the above Regulation clearly indicates that such report on conclusion of the inquiry shall be prepared and submitted within a period of 90 days from the date of issue of notice under Sub Regulation (1). It is contended by the respondents that the time stipulated under Regulation 20(5) for filing such report is only directory and not mandatory. The very same issue was considered by the Division Bench of the Delhi High Court in a case reported in 2016 (338) ELT 347 (Del), Impexnet Logistic vs Commissioner of Customs (General) . The Delhi High Court at paragraph Nos. 6 to 10 has observed as follows: 6. From the list of dates submitted by the Respondent, it appears that an enquiry report dated 4th March, 2015 was forwarded by the Inquiry Officer only on 10th March 2015 which was 13 months after the suspension of the licence. It is thereafter that the impugned order dated 1st June, 2015 was passed after affording the petitioner an opportunity of being he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse). The same position has been reiterated by the Madras High Court in Sanco Trans Ltd. v. Commissioner of Customs, Sea Port/Imports, Chennai (2015) 322 E.L.T. 170 (Mad.) and Commissioner v. Eltece Associates 2016 (334) E.L.T. A50 (Mad.). 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. 10. Consequently, the Court set asides the impugned order dated 1st June, 2015 passed by the Respondent revoking the licence of the petitioner. 9. The other decision relied on by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days from the date of submission of the report. As this Court has already found that the very filing of the report was beyond the period of 90 days as required under Regulation 20(5) and thus taken the view that the Commissioner of Customs is not entitled to proceed further under Regulations 20(6) and 20(7) as stated supra, the impugned show cause notice cannot have legs to stand any more, as naturally it has to fall on its own, in view of the lapse committed by the Officers as stated supra, as the inquiry report, pursuant to the issuance of the show cause notice, was admittedly filed beyond the prescribed period of limitation. 12. It is claimed by the Revenue that the petitioner is an habitual offender and therefore, the proceedings are rightly initiated against them. This Court is not inclined to go into such allegation against the petitioner, as this Court is inclined to interfere with the impugned proceedings only on the ground of limitation, as discussed supra. If the petitioner is an habitual offender, as alleged by the Revenue, it is not known as to what prevented the concerned authorities in proceeding against the petitioner by following the mandatory re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mandatory and therefore, the mandatory requirement of the limitation cannot be ignored. In order to answer the said question, the Division Bench has elaborately considered various decisions rendered by various Courts and thereafter, has come to the above conclusion. 20. Likewise, the Delhi High Court in the decision reported in 2016(340) ELT 119, Overseas Air Cargo Vs. CC and 2016 (337) ELT 41, Indair Carrier Pvt. Ltd vs Commissioner of Customs (General), has also taken the similar view. 21.In W.P.No.27948 of 2017, it is contended by the learned counsel for the Revenue that the Enquiry Report dated 23.05.2018 was made within 88 days from the date of show cause notice. Therefore, it is contended that the time limit is adhered to. On the other hand, it is stated by the learned counsel for the petitioner that though the said report was made ready on 23.05.2018, admittedly, it was submitted before the Authority concerned only on 12.06.2018 and therefore, the very submission of the report itself is beyond the period of 90 days. I am in agreement with the submission made by the learned counsel for the petitioner in view of the fact that Regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench decision of this Court made in W.P.(MD) No.11986 of 2018, etc., dated 19.07.2018, (wherein I am one of the party to the Bench) is also heavily relied on by the respondents in support of their contention that the time limit prescribed is only directory by applying the consequence of non compliance test. 26. Let me now consider the issue as to whether there is no consequence followed for not complying with the time limit prescribed under the present Regulations, as contended by the respondents. 27. No doubt, under the Regulations, it is not specifically stated as to what would follow as a consequence if each and every act contemplated under the Regulations is not done or completed within the prescribed time limit. In my considered view, merely because the Regulation does not prescribe or spell out expressly or specifically as to what would be the consequence, there could be no presumption that there is no consequence at all in these cases. On the other hand, the consequence is obvious and can be inferred easily in these cases. Needless to state that suspending a license pending enquiry cannot be prolonged endlessly without completing the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Section 14 and that the borrower is also not affected in any manner if an order is not passed within the time limit. Further in the said order, the Division Bench has observed at paragraph Nos.17 (d) and (e) as follows: 17. From the foregoing discussion and on examining the relevant provisions and authorities cited by various counsel, the following illustrative principles may be gleaned and applied in order to determine if a provision is mandatory or directory: ...(d)The stipulation of consequences in the event of non-compliance of a provision is a relevant factor to be borne in mind while deciding whether the said provision is directory or mandatory and the non-stipulation thereof is indicative, albeit not conclusive, that the provision is directory. (e) Another dimension of the consequences of non-compliance test is that provisions that are intended to protect or further substantive rights of a party, including time limits in that regard, are generally construed as mandatory whereas provisions that do not impact the substantive rights of a party are generally construed as directory and not mandatory. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time limit prescribed therein are directory. 34. Considering all the above stated facts and circumstances and by following the decisions made by this Court earlier on the very same issue as discussed supra, this Court is inclined to allow all these writ petitions and set aside the impugned proceedings. 35. However, before parting with this case, this Court would like to make certain observations by way of suggestions to the Revenue as follows: It is true that this Court has not gone into the merits of the allegations made against these licencees viz., alleged violations of conditions of license or regulations. It is also true that this Court has chosen to grant the relief to these petitioners only by considering the issue of limitation, as discussed supra, which is found to be mandatory. At the same time, this Court is of the view that atleast in future, the erring persons on both sides should not be allowed to go unpunished or unquestioned by taking shelter under the time limit prescribed as such in the relevant regulations. Therefore, it is advisable to make suitable amendments or introduction of necessary provisions under the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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