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TMI Blog2020 (3) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... resent CBLR, 2013, is a Mandatory Regulation. The time limits in CBLR, 2013 is mandatory, therefore, it has to be strictly followed.. In the case in hand, at the three check points viz., under Regulation 20(1), 20(5) and 20(7), whether the Revenue has passed the test of limitation and if not, where it failed, has to be gone into? - HELD THAT:- On 09.06.2017, Offence Report was generated or sent by the Customs Authorities to the Appellant/Revenue pursuant to which show cause notice under Regulation 20(1) was issued on 06.09.2017, in between there were only 87 days, therefore, in the first stage, the Revenue passed the test of limitation. At the second stage, since the show cause notice was issued on 06.09.2017, the Revenue should have prepared and sent the Enquiry Report under Regulation 20(5) on or before 05.12.2017, the fact remains that, such Enquiry Report was sent on 29.11.2017 and in between there were only 83 days, therefore, the Revenue in the second stage also has certainly passed the test of limitation. The issue now revolves only in a very narrow compass, i.e. whether the Revenue passed the third stage of limitation which comes under Regulation 20(7) of CBLR, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the Respondent/Licensee. Here in the case in hand, insofar as the first two limitation stages are concerned, as discussed, the Revenue had been very cautious and strictly followed the limitation period in issuing show cause notice as well as preparing and sending the Enquiry Report - Insofar as the third stage of limitation i.e. for passing final order of revocation of licence or imposing penalty order against the Customs Broker, though the Revenue had been very conscious about the limitation, it was triggered by the voluntary action and request made by the Respondent/ Customs Broker alone, who made the Revenue to keep the file in abeyance, therefore, in the present case, there is absolutely no material to come to a conclusion that, the Revenue has failed in strictly adhering the limitation period under Regulation 20(7) of CBLR, 2013. Here in the case in hand, the mandatory requirement of the limitation has never been ignored by the Revenue. Even in respect of the 90 days limitation under Regulation 20(7) of CBLR, 2013, the Revenue was very conscious and was very particular about the limitation within which, they wanted to pass the final order. However, it was the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Brokers Licensing Regulations, 2013 (in short CBLR, 2013 ). The CESTAT also on the only point of limitation had concluded that, the order of the Revenue dated 09.05.2018 in Order-in-Original revoking the Customs Broker Licence of the Respondent/Customs Broker was beyond the Statutory Limitation Period, accordingly the said order was set aside and the customs appeal was allowed by the impugned order of the CESTAT in Final Order No.40627/2019 dated 27.03.2019. Felt aggrieved over the said order of the CESTAT, the Revenue preferred this Appeal by raising the following substantial questions of law: A. Whether in the facts and circumstances of the case, the Tribunal is right in restoring the Customs Broker License of the respondent herein? B. Whether in the facts and circumstances of the case, the Tribunal is right and justified in allowing the appeal of the assessee by accepting the contention of the assessee that the Show Cause Notice was issued on 06.06.2017 and the inquiry officer report was submitted only on 29.11.2017 and the date of revocation of the license was on 09.05.2018 which again is more than 90 days beyond the Inquiry officer report, and overlo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7783.92 HM-01 Toy Rattle 63720 PCS 0.085 5416.20 4.1 The list of goods added as per the second invoice YF2-2016 dated 15/03/2016 is as follows [RUD#4]. Marks numbers Description of the goods Total Quantity Unit Unit Price (USD) Total Amount (USD) DC-201 Toy Baby Chair Assorted 800 PCS 0.272 217.60 RI-101 Toy Ball 1480 DZN 0.259 380.36 N/M Chloro di fluoro methane 40172 KGS 0.415 16,671.38 2.3. It is the strong case of the Customs Authorities in respect of the said consignment of import from a foreign country (China) that though originally it was declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 11(d) of the Customs Brokers Licensing Regulations, 2013 and as he further failed to verify the antecedents of his client in contravention of the Regulation 11(n) ibid, it appears that he abetted this act of smuggling. 31.From the foregoing, the following facts appear to emerge: (i) Shri.Praveen Kumar, Proprietor of M/s.Payal Enterprises smuggled the R-22 gas by declaring the goods as Fabrics , Water filter, toy baby chair, toy ball and toy rattle in the shipper's booking request and the bill of lading respectively despite knowing that the R-22 gas requires licence to import and that he did not possess the licence as well. (ii) On scrutiny of the scanned image pertaining to the container SEGU4809899 imported by M/s. Payal Enterprises, SIIB detained the said container for detailed examination even before filing of Bill of Entry by the importer. (iii) The importer filed a bill of entry No.4783575 dated 04/04/2016 through their Customs Broker M/s.Sea Queen Shipping Services (P) Ltd. for the clearance of goods declared as Water filter, toy baby chair, toy ball and toy rattle and the said Bill of Entry was ordered for first check on 06.04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment that the importer did not possess the licence to import R-22. (xv) The Customs Broker is also liable for penalty under Section 114AA of the Customs Act, 1962 for giving wilful mis-statement in respect of the imported goods before Customs. 32.Therefore, Shri. Praveen Kumar, Proprietor, M/s.Payal Enterprises, Chennai Shri. Kundan Kumar, authorised person of M/s. Payal Enterprises and M/s.Sea Queen Shipping Services (P) Ltd., and M/s.Seahorse Ship Agencies Pvt. Ltd., the agent for the containers are hereby called upon to show cause to the Additional/Joint Commissioner of Customs, Group 6, Commissionerate - II, Custom House, Chennai - 1 within 30 days from the receipt of this notice as to why: (i) ... (ii) ... (iii) ... (iv) .... (iii) .... (iv) Penalty under Section 112(a) of the Customs Act, 1962 should not be imposed on the Customs Broker, M/s.Sea Queen Shipping Services (P) Ltd., for abetting the smuggling of R22 gas and by his failure to ensure compliance of Regulation 11(d) and Regulation 11(n) of the Customs Broker Licensing Regulation, 2013. (vi) Penalty under the SEction 114AA of the Customs Act, 1962, shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue would make the contention that, first of all the time lines given in CBLR, 2013 itself is not a mandatory one to be followed in the stricto sensu, instead, it is only directory, therefore, the various Regulations of CBLR, 2013 need not be construed in stricto sensu and therefore, on that point or ground alone, the order of Revenue revoking the Customs Broker Licence of the Respondent ought not to have been set aside by the CESTAT. 4.The learned counsel for the Revenue would also contend that, insofar as the Regulation 20(1) Show Cause Notice and 20(5) Enquiry Report aspects are concerned, assuming without admitting that the limitation of 90 days prescribed therein respectively are to be strictly followed, the Revenue followed the same, however, in respect of the final order of revocation of licence to be passed under Regulation 20(7) is concerned, the same was passed beyond 90 days as contemplated therein which is only because of the attitude and approach of the Respondent and not by the inaction of the Revenue. Therefore, the learned counsel would contend that, the Order-in- Original revoking the licence is sustainable one, therefore, the order impugned passed by the CEST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from this Court. 8.We have given our anxious consideration to the rival submissions made by the learned counsel appearing for the parties and also perused the materials placed before this Court. 9.Before delve into the controversy, for easy and ready reference, the relevant Regulation of CBLR, 2013 viz., Regulation 20 is quoted hereunder: 20. Procedure for revoking licence or imposing penalty.- (1) The Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the licence or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Broker to be heard in person by the Commissioner of Customs. 10.Under this Regulation i.e. Regulation 20, three Sub Regulations prescribe limitation in every stage of the adjudication against Customs Broker. Regulation 20(1) prescribes a limitation of 90 days for issuance of show cause notice from the date of receipt of Offence Report. Regulation 20(5) prescribes the limitation of again 90 days to submit the Enquiry Report from the date of issue of show cause notice under sub-regulation (1). Like that, sub-regulation (7) prescribes yet another limitation of 90 days from the submission of Enquiry Report to pass final order for revocation of licence or otherwise. 11.The issue whether these limitations prescribed in various Sub Regulations of Regulation 20 are to be strictly followed in the mandatory sense or not had already engaged the law Courts in a quite number of cases. 12.Since the learned counsel for the Revenue has made a vehement contention that, the CBLR, 2013 is only directory and not mandatory, whether the said contention can be accepted or not is the question where if we look at the earlier decisions in this regard, the said point raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 followed. 34. ...... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er issues, that is the merit of the case, this mandatory requirement of the limitation can be ignored. 43. 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. 14.The learned CESTAT also in the impugned order has relied upon two decisions of this Court in paras 5.1 and 5.2 of the impugned order which reads thus: 5.1 The Hon ble Madras High Court judgment in the case of M/s.A.M.Ahamed Co. (supra) has inter alia held as under: 20. The time limit prescribed in Regulation 22(1) has to be understood in the context of the strict time schedule prescribed in various portions of the Regulations. Regulation 20(2), for instance, entitles the Commissioner, to suspend the licence of an agent, in appropriate cases where immediate action is necessary. Regulation 22(3) prescribes a time limit of 15 days. Regulation 22(1) prescribes a time limit within which action is to be initiated. It also prescribes the time limit under Regulation 22(5). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce report, there are no two opinions, at least before me. Therefore, the decision of the Division Bench of the Delhi High Court is of no assistance to the respondents. Hence the first contention is to be upheld. 5.2 We also note that the Hon ble High Court of Madras which is the jurisdictional High Court for this forum, in a very recent decision dt. 22.11.2018 in the case of Carewell Shipping Pvt. Ltd., (supra) in W.P.Nos.26923 and 23934 of 2018 held as under : 10. Perusal of the above said decisions of this Court and the Delhi High Court would show that the time stipulated under the Regulations for issuing the show cause notice as well as the filing report is not directory and on the other hand, it is mandatory. No other contra decisions are placed before this Court by the learned counsel for the respondents. Even the decision, which he sought to rely made in W.P.Nos.19312 and 19313 of 2016 dated 13.07.2016, is not relevant to the present facts and circumstances, since in that case this Court has considered the question as to whether the respondent therein had sufficient power to sustain the license invoking Regulation 19(1) of the Regulations. In this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, the Revenue has to blame itself for such lapse, especially when the Courts have held that the period of limitation prescribed under the Regulation, as discussed supra, is mandatory. 13. Considering all the above facts and circumstances, this Court is inclined to set aside the impugned show cause notice dated 13.04.2018. Accordingly, W.P.No.26923 of 2018 is allowed and the impugned show cause dated 13.04.2018 is set aside. 15.Only in these context, by following number of decisions, as has been referred to above, the CESTAT has taken the view that, the Regulation 20 of CBLR, 2013 has been followed in the breach, therefore, the order revoking the Customs Broker Licence of the Respondent, who was Appellant before the CESTAT, was set aside. 16.As the issue whether the CBLR, 2013 is a mandatory one or mere directory since has been given a quietus by a number of decisions, as has been referred to above, we, by respectfully following those decisions and concurring with the view taken by the various High Courts as well as the Coordinate Benches of this Court, once again reiterate and amplify that, the time limits in CBLR, 2013 is mandatory, therefore, it has to be st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and a photocopy of the entire Note file has also been filed which has been taken on file before this Court for our perusal. 22.On perusal of the same, we found that, certain interesting factors emerged from the Note file which are noteworthy, or to be taken note of. After the show cause notice dated 06.09.2017, the Respondent had taken time to give reply or to appear before the Appellant/Revenue to give show cause. 23.On 23.10.2017, in the Note file, it has been recorded that, on 16.10.2017 the Respondent/Licensee sent a letter stating that, they have filed Writ Petition before the High Court and stay order is awaited, hence the Revenue may wait for Court order. Despite these kind of request having been made, the Revenue have been vigilant on the limitation point and ultimately sent the Enquiry Report on 29.11.2017 within the limitation period of 90 days. 24.Thereafter, several days the issue had been adjourned or deferred on the request of the Respondent/Licensee. On 28.11.2017 in fact, the Respondent approached the Appellant/Revenue to defer the matter even to complete the Enquiry Report on the ground that, this Court in W.P.No.26820 of 2017 as well as W.P.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent/Licensee appeared before the Appellant/Revenue and after having taken note of the limitation factor as well as the merits of the case, he has made a request to keep the matter in abeyance to avail the orders to be passed on the main issue against Customs Department and that order was expected to be in their favour. The said request was recorded by the Revenue in the Note file dated 12.02.2018 during the hearing and it has also been recorded with the following words. This period will be reduced from the time limits when the case is decided. They agreed for it. Therefore, the said arrangement of keeping the file in abeyance for some time awaiting the orders to be passed in the main issue initiated by the Customs Department where also the Respondent/Licensee was the party, was made only at the instance of the Respondent, and the said time where the present issue was kept in abeyance as per the request of the Licensee, definitely shall be reduced from the overall 90 days limitation period provided under sub-regulation (7) of Regulation 20 of CBLR, 2013. For the said arrangement, which had been made purely on the request of the Petitioner, one Mr.Padmanabhan, Managing Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentation. Waiver actually requires two parties, one party waiving and another receiving the benefit of waiver. There can be waiver so intended by one party and so understood by the other. The essential element of waiver is that there must be a voluntary and intentional relinquishment of a right. The voluntary choice is the essence of waiver. There should exist an opportunity for choice between the relinquishment and an enforcement of the right in question .. (ii) Waman Shriniwas Kini v. Ratilal Bhagwandas Co. [1959 Supp. (2) SCR 217]: 13 Waiver is the abandonment of a right which normally everybody is at liberty to waive. A waiver is nothing unless it amounts to a release. It signifies nothing more than an intention not to insist upon the right. It may be deduced from acquiescence or may be implied . (iii) Krishna Bahadur v. Purna Theatre and others, [(2004) 8 SCC 229]: 10.A right can be waived by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. Whenever waiver is pleaded it is for the party pleading the same to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the present act on the part of the Respondent/Licensee can very well be construed as the voluntary abandonment or relinquishment of the right even statutory benefit, claim or privilege, therefore, he would not be entitled to insist upon the Revenue to adhere to the time schedule under the Regulation 20(7). 34.Here in the case in hand, insofar as the first two limitation stages are concerned, as we have discussed above, the Revenue had been very cautious and strictly followed the limitation period in issuing show cause notice as well as preparing and sending the Enquiry Report. 35.Insofar as the third stage of limitation i.e. for passing final order of revocation of licence or imposing penalty order against the Customs Broker, though the Revenue had been very conscious about the limitation, it was triggered by the voluntary action and request made by the Respondent/ Customs Broker alone, who made the Revenue to keep the file in abeyance, therefore, in the present case, there is absolutely no material to come to a conclusion that, the Revenue has failed in strictly adhering the limitation period under Regulation 20(7) of CBLR, 2013. 36.In para 42 of the order i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llel proceedings initiated by the Customs Authorities. 42.Since these aspects have not at all attempted to be considered by the CESTAT in the impugned order, we are of the considered view that, in fact, we are fully satisfied that, the given facts and circumstances of the case in hand, makes it abundantly clear that, the order of the CESTAT is liable to be interfered with. As we aware that the Tribunal since has passed the impugned order only on the basis of limitation and merits of the issue since has not been discussed, we are constrained to remit this matter to the CESTAT for fresh hearing to decide the issue on merits without going into the limitation point. 43.In the result, the impugned order of the CESTAT is set aside. The matter is remitted back to the CESTAT for fresh consideration, of course, only on the merits of the issue, not on the ground or point on limitation under Regulation 20 of CBLR, 2013. It is open to the parties to the lis to agitate the issue on merits before the CESTAT as such opportunities would be given by the CESTAT to both parties and accordingly the CESTAT would decide the issue on merits at the earliest within a reasonable time. 44.In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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