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TMI Blog2021 (2) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... HARYANA HIGH COURT] were not brought to the notice of the Bench deciding M/S RP CARGO, HANDLING SERVICES VERSUS COMMISSIONER OF CUSTOMS (AIRPORT GENERAL) [ 2019 (5) TMI 80 - CESTAT NEW DELHI] . The Supreme Court in the aforesaid two decisions pointed out that when a statute distinguishes between issue of notice and service of notice by using both the expressions in the statute, the requirement of issue of notice would be satisfied when such notice is actually issued and not when it is served. The Supreme Court also pointed out that when there is a limitation for an authority to make an order, date of exercise of that power is the relevant date for exercise of such power and the decision of such authority comes into force or becomes operative and becomes an effective order on the date when it is signed. Thus, the date of communication of the order to the party is not relevant for the purpose of determination whether the power has been exercised within the prescribed time. However, if the statutory provision protects the interest of the person adversely affected by providing a remedy against the order, the period of limitation would commence from the date of communication of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot include serve ; (ii) The time limit prescribed in regulation 17(1) of the 2018 Regulations or regulation 20(1) of the 2013 Regulations is mandatory in nature. X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Customs Broker within ninety days from the date of receipt of the offence report and this provision was complied with since the notice was signed and also tendered to the Postal Department on August 14, 2018 for service upon the appellant. 6. The learned Member (Judicial) agreed with the contention advanced on behalf of the Department that regulation 17(1) only requires issuance of notice in writing to the Customs Broker within a period of ninety days from the date of receipt of the offence report and does not require that notice should also be served within the aforesaid period of ninety days. The learned Member (Technical), however, took the view that the notice contemplated under regulation 17(1) should be served on the Customs Broker within a period of ninety days from the date of receipt of the offence report. 7. In order to appreciate the contentions advanced by the learned Counsel of the appellant and the learned Authorized Representative of the Department, it would be necessary to reproduce the relevant provisions of the 2018 Regulations. 8. Regulation 3 provides that no person shall carry on business as a Customs Broker relating to the entry or departure of a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker. (3) xxxxxxxxxxxxx (4) xxxxxxxxxxxxx (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 Principal Commissioner or 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 Principal Commissioner or Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs Broker, pass such orders as he deems fit either revoking the suspension of the license or revoking the license of the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1). Regulation 17(7) provides that the Commissioner of Customs shall, after considering the report of the enquiry and the representation thereon pass such orders as he deems fit within ninety days from the date of submission of the report by the Assistant Commissioner. 15. It is, therefore, seen that different expressions have been used in the said regulation 17 like 'shall issue a notice', 'submit the report within a period of ninety days from the date of issue of a notice under sub-regulation (1)', and 'from the date of submission of the report'. Different meanings will have to be assigned to the words 'issue' and 'submit', more particularly, when under regulation 17(5), a report has to be submitted within a period of ninety days from the date of issue of the notice under regulation 17(1). 16. The use of the expression 'issue' in regulation 17(1) makes sense for the reason that certainty has to be attached when limitation is involved. The Commissioner is aware of the date when the offence report is received in his office but would certainly not be aware of the date when the notice would actually be served upon the Customs Broker. It is for this reason that the expression 'iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefor. Both rice husk and paddy husk, thus, found place in the notification. Indisputably, therefore, paddy husk was subjected to for the first time by reason of the said notification dated 6-6-1996. Yet again, while giving a purported new look to the entry in the notification dated 15-1-2000, the words 'rice husk' and 'paddy husk' have respectively been mentioned. Even then no attempt was made to issue any clarification. Two expressions having been used ordinarily two different meanings should be assigned thereto. If by reason of a notification, taxes are sought to be imposed upon a new commodity applying Heydon's Rules (3 Co. Rep: 7a; 76 E.R. 637), it must be held that the mischief was sought to be remedied thereby. It is, therefore, difficult to agree with Mr. Gupta that rice husk and paddy husk denote the same commodity." 21. The 2018 Regulations have been framed under section 146 (2) of the Customs Act. The provisions of the Customs Act would also, therefore, throw light on the expressions used in the 2018 Regulations. 22. Section 153 of the Customs Act deals with modes for services of notice. The said section 153, as it stood prior to its amendment on March 29, 2018, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om it is issued or by sending it to the e-mail address provided by the person to whom it is issued. 26. Sub-sections (c) and (d) of section 153 (1) of the Customs Act also use the expression 'the person to whom it is issued'. 27. In this context it would also be pertinent to refer to section 28 of the Customs Act. Section 28(1) uses the expression serve notice, while section 28(3) uses the expression issue the notice. Section 28(4) uses the expression serve notice and section 28(9) uses the expression within one year from the date of notice. Reference also needs to be made to section 110(2) of the Customs Act. The relevant words are "no notice in respect thereof is given". 28. The Customs Act, it is seen, refers to serve notice, issue the notice and notice is given. 29. The Courts have held that where different expressions are used in a statute, they must be construed to carry different meanings. It would, therefore, be useful to examine these decisions. 30. The Supreme Court in Kumho Petrochemicals Company Limited observed as follows: "32. ………………The learned counsel for respondent rightfully pointed out that the legislature has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Representative of the Department took time to verify this statement. A communication dated February 5, 2021 was sent by the Authorized Representative mentioning therein that the field formation of the Department had telephonically informed the Authorized Representative that the decision of the Tribunal in R.P Cargo Handling was challenged by the Department before the Delhi High Court in an appeal and written confirmation would be submitted on February 8, 2021. The written confirmation has been placed. It mentions that Customs Appeal No. CUS/AA 223/2019 is pending in the Delhi High Court. Copies of the orders dated September 27, 2019, September thirty, 2019 and October 15, 2019 passed by the High Court have also been placed. The order dated September 27, 2019 passed by the Delhi High Court in the appeal filed by the Department is reproduced below: "1. Issue notice. Learned counsel for the Respondent accepts notice. 2. List on thirty.09.2019 for arguments. 3. In the meantime, the operation of the impugned order shall remain stayed." 35. On September 30, 2019 adjournment was sought by the learned Counsel for the appellant and therefore the matter directed to be listed on Oct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act 1961. They are reproduced below:- "148(1)--Before making the assessment, reassessment or recomputation under section 147, the Income-tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section. (2)....................................... 149(1) --No notice under section 148 shall be issued, (a)..................................... (b) In cases falling under clause (b) of section 147, at any time after the expiry of four years from the end of the relevant assessment year. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151." (emphasis supplied) 43. The Supreme Court noticed that the judgment of the Gujarat High Court that was assailed before the Supreme Court had relied upon a decision of the Supreme Court in Banarsi Debi, which had considered the validity of a notice issued under section 34 (1) of the Income Tax Act, 1922. The Supreme Court observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) at any time after the expiry of four years from the end of the relevant assessment year, the requirement is satisfied if the notice is actually issued within this time and service of notice is not a condition precedent. In fact, service of notice is a condition precedent to making an order of reassessment under section 148. The Supreme Court, therefore, distinguished its earlier decision in Banarsi Debi. 45. It would also be relevant to refer to a decision of the Supreme Court in The Collector of Central Excise vs. M/s M.M. Rubber & Co. Tamil Nadu [AIR 1991 SC 2141]. The issue that arose before the Supreme Court was as to what would be the relevant date for the purpose of calculation of one year provided under section 35E (3) of the Central Excises and Salt Act, 1944. Section 35 provides for an appeal against any decision or order of a Central Excise Officer and such an appeal has to be filed within three months from the date of the communication to him of such a decision. Section 35E (1) authorises the Board of its own motion to call for and examine the records of any proceeding in which the Collector of Central Excise has passed any decision or order for the purpose of satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is made public or notified in some form or when it can be said to have left his hand. The date of communication of the order to the party whose rights are affected is not the relevant date for purposes of determining whether the power has been exercised within the prescribed time. So far as the party who is affected by the order or decision for seeking his remedies against the same, he should be made aware of passing of such order. Therefore Courts have uniformly laid down as a rule of law that for seeking the remedy the limitation starts from the date on which the order was communicated to him on the date on which it was pronounced or published under such circumstances that the parties affected by it have a reasonable opportunity of knowing of passing of the order and what it contains. xxxxxx Thus if the intention or design of the statutory provision was to protect the interest of the person adversely affected, by providing a remedy against the order or decision any period of limitation prescribed with reference to invoking such remedy shall be read as commencing from the date of communication of the order. But if it is a limitation for a competent authority to make an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to note the essential facts. The Collector of Central Excise, by order dated November 28, 1984, dropped the proceedings. A copy of this order was dispatched to the assessee, which was received by him on December 21, 1984. The Board, on December 11, 1985, directed the Collector of Central Excise under section 35E (1) to apply to the Tribunal for correct determination of the points and the Collector filed an application before the Tribunal, as provided under section 35E (4). Sub-section (3) of section 35E provides that no order shall be made after the expiry of one year from the date of order of the adjudicating authority. It was urged before the Tribunal by the assessee that the relevant date of the order passed by the Collector for the purpose of section 35E (3) should be taken as November 28, 1984 when the order was made and not December 21, 1984 when it was received by the assessee. The Tribunal accepted this contention of the assessee and held that the application was not maintainable. The Supreme Court upheld the order of the Tribunal. 47. In this connection, it would also be pertinent to refer to the Full Bench decision of the Punjab and Haryana High Court in The J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to make the assessment or re-assessment under S, 147. That is the scheme of the present Act and there is no reason why the expression "issued" occurring in Section 149 should not be given its natural meaning instead of the strained, wider meaning "served". The departure from the old provision in Section 34 of the 1922 Act is a conscious departure and it is our duty to give full effect to it." (emphasis supplied) 48. The decision of the Delhi High Court in Purushottam Jajodia vs. Directorate of Revenue [Writ petition No. 416 of 2014 decided on July 24, 2014.] also needs to be examined. The issue that had arisen for consideration was regarding the meaning to be ascribed to the expression 'given' appearing in sections 110(2) and 124(a) of the Customs Act. Section 110(2) of the Customs Act provides that where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whom they were seized. Section 124 (a) provides that no order confiscating any goods or imposing any penalty on any person shall be made unless th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court also pointed out that when there is a limitation for an authority to make an order, date of exercise of that power is the relevant date for exercise of such power and the decision of such authority comes into force or becomes operative and becomes an effective order on the date when it is signed. Thus, the date of communication of the order to the party is not relevant for the purpose of determination whether the power has been exercised within the prescribed time. However, if the statutory provision protects the interest of the person adversely affected by providing a remedy against the order, the period of limitation would commence from the date of communication of the order. 52. Thus, in view of the aforesaid decisions of the Supreme Court in R.K. Upadhyaya and M.M. Rubber and Company, which have not been considered in R.P. Cargo Handling, it has to be held that the expression issue in regulation 17(1) of the 2018 Regulations would not mean service of notice. It needs to be noted that regulation 17(1) of the 2018 Regulations is in pari materia with regulation 20 (1) of the 2013 Regulations. 53. The Second issue that has been referred to is whether the time li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner 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 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." 57. The preliminary report concerning the offence was received on 16 August, 2013. The License issued to the appellant was suspended on 06 September, 2013. Under regulation 22(1) of the 2004 Regulations, the show cause notice is required to be issued within ninety days of the receipt of the offence report and under regulation 22(5), the report is required to be submitted within ninety days of the issue of notice. Though a show cause notice under regulation 22(1) was not issued to the appellant within the stipulated period, but the Tribunal had directed the respondent to complete the proceedings under regulation 22 within sixty days from the date of receipt of order of the Tribunal, failing which the suspension order would stand revoked. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .L.T. 170 (Mad.) and Commissioner v. Eltece Associates - 2016 (334) E.L.T. A50 (Mad.). 8. Consequently, the Court is unable to sustain the directions issued by the CESTAT in the impugned order dated 11th March, 2015, permitting the Respondents to proceed with and complete the inquiry within a further period of 60 days from the date of the impugned order of the CESTAT despite noting that the mandatory time-limits under the CHALR had not been adhered to. The impugned order dated 11th March, 2015 of the CESTAT is accordingly set aside. 9. As a result, the SCN issued by the Respondents to the Petitioner pursuant to the order of the CESTAT on 17th March, 2015, the consequential inquiry report dated 16th April, 2015 and the order dated 7th May, 2015 passed by the Respondents revoking the Petitioner's licence are also held to be unsustainable in law and are hereby set aside. 10. The CHA licence of the Petitioner/Appellant that stood revoked will stand revived forthwith. In the event that the Petitioner's original CHA licence has expired in the meanwhile, its application for renewal will be processed by the Respondents without unnecessary delay. The appeal and the writ petition are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Order dated 24th May, 2016 in WP(C) No. 1734 of 2016 [HLPL Global Logistics Pvt. Ltd. v. TheCommissioner of Customs (General)] [2016 (338) E.L.T. 365 (Del.)]; (iv) Order dated 1st June, 2016 in WP(C) No. 5thirty0 of 2016 [Impexnet Logistic v. Commissioner of Customs (General)] [2016 (338) E.L.T. 347 (Del.)]. 15. The SCN dated 14th October, 2011 that was issued to the appellant is the same SCN that was issued to M/s. S.K. Logistics, M/s. Sunil Dutt and M/s. Entire Logistics Pvt. Ltd. The offence report is the same for all the said noticees. It was received on 19th May, 2011. In terms of Regulation 22(1) of the CHALR, 2004 (which corresponds to Regulation 20(1) of the CBLR, 2013), the SCN had to be issued within ninety days from 19th May, 2011, i.e., on or before 18th August, 2011. Instead the SCN was issued on 14th October, 2011. Secondly, in terms of Regulation 22(5) of the CHALR, 2004, the enquiry had to be completed and a report submitted within ninety days of the issuance of the SCN under Regulation 22(1). In the present case, it is not disputed that the inquiry report was submitted only on 16th January, 2015 more than three years after the SCN dated 14th October, 2011 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the regulations cannot be treated as subordinate legislation. Moreover, every implementing authority of any fiscal statute is only performing a public duty. Therefore, it cannot be said that the provision is to be termed as 'directory' just because its adherence is in the nature of performance of a public duty. What is to be considered is the object of the enactment in prescribing a period for the performance of such public duty. 25. The power to revoke the licence is granted under Regulation 18 and the conditions and the procedure are contemplated under Regulation 20. Before, deciding the question as to whether the time limit prescribed is "directory" or "mandatory", it is relevant to quote the Regulation 20 of CBLR, 2013. xxxxxxxxxx 27. The purpose, for which such time limit has been prescribed, is to curb the smuggling of goods and in the result to cancel the licences of the brokers if they are involved and to impose penalty. The interpretation of a statute must always be to give a logical meaning to the object of the legislation and the aim must be to implement the provisions rather than to defeat it. As laid down by the Apex Court in the judgments relied upon by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been issued beyond the period prescribed in the regulations, which have statutory force and hence, not sustainable." (emphasis supplied) 64. Thus, the Delhi High Court and the Madras High Court, while dealing with the provisions of regulation 22(1) of the 2004 Regulations and regulation 20(1) of the 2013 Regulations, which are similar to regulation 17(1) of the 2018 Regulations, have held that time limit prescribed for issuance of a notice within ninety days from the date of receipt of the offence report is mandatory in nature and non-compliance of the notice would result in revival of the License. 65. Learned Authorized Representative of the Department has however, placed reliance upon a judgment of the Bombay High Court in The Principal Commissioner of Customs (General) Mumbai vs. Unison Clearing Pvt. Ltd. [2018 (361) ELT 321(Bom.)] to contend that the time limit prescribed under regulation 17(1) of the 2018 Regulations is not mandatory in nature and is only directory. The issue that arose before the Bombay High Court was whether the time period prescribed for issuance of the notice contemplated under regulation 20(1) of the 2013 Regulations within ninety days from the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature. Paragraph 16 of the judgment is reproduced below:- "16. Regulations of 2004 as well as the Regulations of 2013 are products of exercise of powers under Section 146 of the Customs Act, 1962. Both the Regulations regulate the affairs of a Customs House Agent, subsequently known as the Customs Agent in the Regulations of 2013. Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulation 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. While interpreting a statute when it provides for a time limit for doing a certain act, then, the entire statute is required to be considered, in the context of the object that the statute seeks to achieve. A statutory provision prescribing a time limit without providing for the consequence of non-adherence can be interpreted to mean that, the time limit provided is directory and not man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Courts has been considered in M/s. Atma Steels P. Ltd. and others v. Collector of Central Excise, Chandigarh reported in l984 (17) E.L.T. 331 wherein the Larger Bench consisting of five Members held that, in view of its All India jurisdiction and peculiar features, the Tribunal cannot be held bound to the view of any one of the High Courts, but has the judicial freedom, to consider the conflicting views, reflected by different High Courts, and adopt the one considered more appropriate to the facts of a given case before the Tribunal. The Tribunal also indicated that this should be so, irrespective of the fact whether one particular assessee was within the jurisdiction of a specified High Court or the original adjudicating authority was located there. The judgment of the Apex Court in the case of M/s. East India Commercial Co. Ltd. v. Collector of Customs, Calcutta reported in 1983 (13) E.L.T. 1342 (S.C.) was brought to the notice of the Larger Bench, but, was not adverted to sufficiently in the course of discussion. In the East India Commercial Co. case, one of the questions for consideration was whether the interpretation given by the Calcutta High Court to Section 167 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the decision of Supreme Court in the East India Commercial Company case i.e. where the jurisdictional High Court has taken a particular view on interpretation or proposition of law, that view has to be followed in cases within such jurisdiction. If the jurisdictional High Court has not expressed any view in regard to the subject matter and there is conflict of views among other High Courts, then the Tribunal will be free to formulate its own view in the light of Atma Steels P. Ltd. case; however, there is a decision of only one High Court in regard to disputed interpretation or proposition of law, the Tribunal is bound to follow that order since it is not at liberty to disregard the solitary High Court decision." 71. In view of the aforesaid decision of the Larger Bench of the Tribunal, the judgements rendered by the Delhi High Court would have to be followed. The Delhi High Court has, in very clear terms, held that the time limit prescribed under the regulations for issuance of the notice within ninety days from the date of receipt of the offence report is mandatory in nature. Such being the position of law, the Licence would automatically stand revived if a notice contemplat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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