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TMI Blog2022 (8) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... I VERSUS UNISON CLEARING PVT. LTD., AND OTHERS. [ 2018 (4) TMI 1053 - BOMBAY HIGH COURT] , wherein while deciding a batch of petitions held that the time limit contained in Regulation 20 of CBLR 2013 is directory and cannot be held to be mandatory. The Court further observed that in a case where strict adherence to the timeline cannot be ensured, the principles of fairness would require that delay must be justified by giving reasons as to why the time limit was not adhered to. It can be seen that the timelines as prescribed under various Regulations in CBLR 2018, have been consistently held by the Courts as mandatory in nature. Each timeline is sacrosanct, and the idea of prescribing a time limit by statute becomes redundant if not adhered to. Therefore, it is not just the overall timeline of 270 days (as set forth in the Circular No. 09/2010 dated 08.04.2010) that needs to be followed, but also each and every timeline as prescribed in the CBLR 2018 - the Appellant s customs broker licence is stated to have expired in the meantime and has not been renewed. The proceedings involving revocation of the appellant s custom broker license, forfeiture of its security deposit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of the Appellant Company/Appellant herein, along with one other person (Sh. Ramesh Wadhera) were engaged in evasion of Customs Duty by way of diverting the goods stored in Custom Bonded warehouses, into domestic market, without payment of customs duty and, further, that documents to show re-export of warehoused goods were also being forged/fabricated by the said persons. It was averred that for the purpose of evasion, allegedly fictitious firms were created by the Appellant and one Shri Ramesh Wadhera, and Import Export Codes (IEC s) were obtained in the name of:- (i) M/s Accturists (OPC) Pvt. Ltd (IEC: 0517503581); (ii) M/s Sparx Exports (IEC: 0516517803); (iii) M/s Shree Shyam Enterprises (IEC: 0516966839); and (iv) M/s Horrens Exim (IEC: 0516516299). 5.2 The information further added that the Appellant and Shri Ramesh Wadhera had also obtained bonded warehouse(s) in the names of their employees with fictitious residential addresses, which were used for diversion of warehoused goods into the domestic market without payment of customs duty. It was further averred that the aforesaid persons were utilizing the services of other customs brokers for the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry report beyond the prescribed period of 90 days from the issuance of show cause notice at Annexure-F as under: .13. Record of Personal Hearing and Submissions of the CB: In terms of Regulation 17(1) of CBLR, 2018 (read with erstwhile CBLR, 2013), the undersigned was appointed as Inquiry Officer in the case. However the SCN could not reach to the enquiry officer and the undersigned could only came to know about it when she received the reminder dated 13.11.2018. The undersigned immediately informed about the same vide letter dated 19.11.2018 to the policy wing (Annexure VIII) and on the same date a letter was issued to the CB to appear before Enquiry Officer...... 5.8 After submission of the Inquiry report, Commissioner Customs (Respondent herein) granted a personal hearing to the Appellant on 16.01.2019, which was unattended and thereafter another hearing was granted on 28.01.2019, which was attended by the counsel for the Appellant. During this personal hearing, it was submitted by the Appellants that the Inquiry Officer submitted the Inquiry Report after the expiry of 90 days from the date of issuance of the show-cause notice and therefore it is beyond the peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntra, it is submitted on behalf of the Department that after receiving the information from Additional Directorate, DRI Headquarters, vide letter dated 10.05.2018, that a meticulous investigation in the form of conducting searches at various premises, in the form of recording of the statements of various people who were found the IEC Holders of the fictitious Companies as allegedly created by Shri Ramesh Wadhera and Shri Sanjeev Maggu, the Director of the Appellant Company was called. It is impressed upon that the Director of the Appellant was the master mind of diverting the warehoused goods to the domestic market. The statements being given to the Customs officers under Section 108 of the Customs Act are well admissible into evidence. Thus, there is sufficient evidence on record as a proof for the alleged illegal act on the part of the Appellant. Hence, there is no infirmity in the Order under challenge. It is impressed upon that the impugned show cause notice cannot even be held to be barred by time as alleged. It is impressed upon that the time limit under Regulation 20(5) of CBLR, 2013 is mere directory and not mandatory in nature. Learned AR has relied upon decision of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.13 On the merits of the matter, the CESTAT upheld the cancellation of the Appellant s licence with the forfeiture of security deposit and imposition of a penalty. The CESTAT, accordingly, by its order dated 01.10.2019 dismissed the appeal filed by the Appellant and upheld the Order-in-Original, which has led to the filing of this appeal. 6. The Appellant has challenged the impugned order of CESTAT dated 01.10.2019 inter-alia on the following grounds:- (i) The impugned order has been passed by the Tribunal in contravention of the principles of natural justice. No opportunity under Regulation 17(4) was granted to the Appellant for cross-examination of the persons on whose statements the licence of the appellant was revoked. (ii) That the action taken by the Respondent was time barred as the Inquiry Report issued by the Investigating Officer was beyond the mandatory period of 90 days as stipulated under Regulation 17(5) of the CBLR 2018. 6.1 As noticed in paragraph 4 above, since the Appellant does not wish to press the issue of denial of right to cross-examination, we do not propose to deal with this issue in the judgment. 7. The Respondent filed his reply throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file their brief written submissions. Written submissions were filed on behalf of the Appellant only on 10.05.2022. 9. The Appellant has in his written submissions inter-alia submitted that the time limit(s) prescribed under the Custom Broker Licensing Regulations, 2013 (CBLR, 2013) is mandatory and not directory. This Court, in a plethora of judgments, has also repeatedly held the same. However, the Tribunal has taken a contrary view to the binding precedents. 9.1 The Appellant has further averred that each of the various time limits prescribed under the CBLR is mandatory in nature. As per Regulation 17(5) of CBLR, 2018, the Inquiry Officer has to submit its Inquiry report within 90 days of the issuance of the show-cause notice. The Appellant avers that the show-cause notice was issued on 10.08.2018 and the period of 90 days prescribed under Regulation 17(5) expired on 08.11.2018. The enquiry report submitted on 06.12.2018 was beyond the prescribed period. 9.2 The Appellant inter-alia seeks to rely on the following judgments passed by Coordinate Bench(s) of this Court, which have directly dealt with the subject issue involved in the present appeal: (i) Overseas Air C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement 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) (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall, in the course of inquiry, consider such documentary evidence and take such oral 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 Broker, for the purpose of ascertaining the correct position. (4) (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) ... (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 Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the issue of suspension of CHA license, and for passing of an order by the Commissioner of Customs. Suitable changes have been made in the present time limit of forty-five days for reply by CHA to the notice of suspension, sixty days time for representation against the report of AC/DC on the grounds not accepted by CHA, by reducing the time to thirty days in both the cases under the Regulations. 12. From a perusal of the record, the following facts are evident. An Offence Report dated 10.05.2018 was received in the office of the Commissioner of Customs on 18.05.2018, on the basis of which the show-cause notice dated 10.08.2018 was issued by the Respondent. Although, a copy of the Offence Report was not filed, the show cause notice states that the Offence Report dated 10.05.2018 was received in the office of Respondent on 18.05.2018; causing an eight days internal delay which is not attributable to the Appellant. Regulation 17(1) sets forth that the notice shall issue within ninety days from the date of receipt of offence report. If calculated from 10.05.2018, the SCN would have been delayed, however, since the show cause notice states that the document was received on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R as regards the time limits as under: 6. The time limits in the CHALR 2004 for issuance of the SCN to the CHA licence holder and completion of the inquiry within 90 days of issuance of such SCN are sacrosanct. The aforesaid time limits were engrafted into Regulation 22 of the CHALR, 2004 by a Notification No. 30/2010-Cus.(N.T.): dated 8th April, 2010. Simultaneously, the CBEC issued Circular No. 9/2010 dated 8thApril 2010 clarifying the procedures governing the suspension and revocation of CHA licence. In para 7.1 of the said Circular, it was noted as under: 7.1 The present procedure prescribed for completion of regular suspension proceedings takes a long time since it involves inquiry proceedings, and there is no time limit prescribed for completion of such proceedings. Hence, it has been decided by the Board to prescribe an overall time limit of nine months from the date of receipt of offence report, by prescribing time limits at various stages of Issue of Show Cause Notice, submission of inquiry report by the Deputy Commissioner of Customs or Assistant Commissioner of Customs recording his findings on the issue of suspension of CHA license, and for passing of an ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il 29, 2016 in Writ Petition (C) No. 3071 of 2015 (Sunil Dutt v. Commissioner of customs, (2016) 40 GSTR 75 (Delhi)). 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 ELT 170 (Mad) and Commissioner of Customs v. Eltece Associates, (2016) 334 ELT A50 (Mad). 7. Recently by an order dated April 24, 2016 in Writ Petition (C) No. 1734 of 2016 (HLPL Global Logistics P. Ltd. v. Commissioner of Customs, (2016) 40 GSTR 86 (Delhi)) this court reiterated that the time limits in regulation 20 of the Customs Brokers Licensing Regulations 2013/regulation 22 of the Customs House Agents Licensing Regulations, 2004 are sacrosanct. 8. 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. [Emphasis is ours] 13.2 A similar issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuance of notice within 90 days. While, making out a prima facie case, the respondents ought to have, without any shadow of doubt, treated the word shall 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. . 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 circumstances, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations is mandatory and sacrosanct. A show cause notice issued after 90 days of receipt of the offence report, is invalid. In other words, if the show cause notice was not issued within a period of 90 days from the date of receipt of the offence report, the proceedings under Regulation 20 would be null and void. We are bound by these decisions passed by co-ordinate Division Benches of this Court. 10. Decision in A. M. Ahamed (supra), relates to Regulation 20 of the Customs House Agent License Regulations 2004 ( 2004 Regulations , for short) which were applicable prior to enactment and enforcement of 2013 Regulations 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). Therefore, considering the fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merits. We are bound by the decisions, as discussed above, passed by the coordinate benches of this Court and other High Courts, which state that each timeline is sacrosanct. 14.2 We are unable to persuade ourselves to agree with the decision of the Bombay High Court in the Principal Commissioner of Customs V. Unison Clearing Pvt. Ltd (supra) that where a reasonable explanation is given for such delay and were accounted for, the delay may be condoned. In any event, in the present case, the facts are distinguishable. The Revenue has nowhere in their pleadings before the CESTAT and neither in their Reply affidavit filed in this present appeal given any reasonable explanation for the delay or non-compliance of the timeline prescribed under sub-regulation (5) of Regulation 17 of CBLR 2018. Revenue is bound to follow the settled law and statutory provisions, including their timelines. Once the limitation is prescribed clearly therein, it cannot be stated that because of other issues, this mandatory requirement can be ignored. 14.3 In view of the aforegoing discussion and having regard to the consistent view of the Courts across the Board, we are not inclined to take a contrary vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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