M/s. Amity Logistics vs Commissioner Of Customs (Preventive)

This appeal is filed by the appellant against the order of the Commissioner of Customs (Preventive), Trichy, in Order-in-Original No. 2/2020 (CB) dated 02.06.2020 whereby, the Commissioner has imposed a penalty of Rs. 50,000/- on the appellant, under Regulation 18 of Customs Broker Licensing Regulation ('CBLR' for short), 2018.

The only issue in this appeal is, whether the Revenue was justified in imposing penalty under Regulation 18 on the ground of violation of Regulation 10 (d) (e) and (n) of CBLR, 2018, on the appellant who is a Customs Broker?

Ms. V. Pramila, Learned Advocate, appeared on behalf of the appellant submitted at the outset, that as per Regulation 17 of CBLR, it is mandatory that a notice be issued to the Customs Broker within 90 days from the date of receipt of an "Offence Report", whereas the Show Cause Notice dated 15.10.2019 was issued more than 30 days after the prescribed 90 days period and hence, the very proceedings is ab-initio void, and consequently, penalty imposed also suffers from legal infirmity. She relied on the following case-law to support her arguments that the notice having not been issued within the mandatory period prescribed under the Regulation, the proceedings itself is irregular and consequently no penalty was exigible.

Masterstroke Freight Forwarders Pvt. Ltd. Vs, Commissioner 2016 (332) ELT 300 (Mad.)

Sowparnika Shipping Services Vs. CC, Chennai 2017 (352) ELT 286 (Mad.)

Kalki Shipping Associates Vs. CC, Chennai 2019 (368) ELT 319 (MAD.)

Sabin Logistics Pvt. Ltd., Mr. S. Loganathan Vs. Commissioner of Customs. 2019 (4) TMI 1713-Madras HC

KTR Logistics Solutions Pvt. Ltd. Vs. CC, Chennai 2020 (371) ELT 685 (Mad.)

Per contra, Shri Jagan Babu, AC, learned Departmental Representative strongly supported the findings of the Commissioner.

I have heard rival contentions and gone through the cases relied on during the hearing. The findings arrived at by the Commissioner-Adjudicating authority interalia reveal that offence report dated 28.05.2019 was sent by the Assistant Commissioner, Customs House, Cochin vide letter F. No. S9/13/2008-I&B-Cus dated 07.06.2019, which was received on 12.06.2019. This would mean that the time limit provided under Regulation 17 of CBLR, 2018 would start ticking from 12.06.2019 and the Revenue has an upper limit of 90 days from the date of receipt to issue a notice in writing. There is no dispute here that the SCN was issued on 15.10.2019, which is clearly beyond the prescribed 90 days statutory period. Hon'ble jurisdictional High Court in the case of M/s. Sabin Logistics Pvt. Ltd., Mr. S. Loganathan Vs. Commissioner of Customs - 2019 (4) TMI 1713, after noticing its own earlier decisions and also the decisions of the Hon'ble Delhi High Court, has reiterated the following principle:-

"16. The issue as to whether the 90 days' time-limit for issuance of notice for revocation of licence under Regulation 20(1) is mandatory or directory is no longer res integra. There are a series of decisions of the Courts that have decided the same holding it to be mandatory. The revenue does not dispute this position either. However, Learned Counsel urges that in the facts of this case, the period be computed excluding the period when the order of suspension passed under Regulation 19 was stayed by this Court.

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I am of the view that where a provision/regulation spells out a specific period of limitation, such period is mandatory and any exclusion therefrom should also be provided for specifically.. ........"

This being the settled position of law, the excuse pretended by the adjudicating authority that some of the documents required translation, is no ground to endorse inaction in the non-issuance of SCN within 90 days. The authorities are expected to adhere to the time limit and the Regulation in question does not carve out any exceptions and hence, the reasons given by the Commissioner cannot be accepted.

In view of the above, the notice having been issued beyond the prescribed period which is itself irregular and therefore, penalty imposed on the appellant cannot be sustained. In the result, the impugned order is set aside and the appeal is allowed.

(Order pronounced in the Open Court on 06.08.2021)