M/s Atharva Global Logistics vs CC, New Delhi

The appellant is in appeal against the impugned order wherein Commissioner of Customs (General), New Delhi has revoked the Custom Broker

License of the appellant exercising the power under Regulation 20 read with Regulation 12(7) of the Customs Broker Licensing Regulation, 2013 and

forfeited the bank guarantee of Rs.75,000/- furnished by the appellant vide order dated 13th Feb. 2015.

The facts of the case are that the appellant is a Custom House Broker operating under license issued by the Commissioner of Customs (General),

New Delhi. Initially vide order dated 16.12.2013 the Custom Broker License was suspended on the ground that the appellant failed to exercise

supervision to ensure proper conduct of his employees in transaction of business and accordingly is responsible for mis-conduct of his employees.

Thereafter, the proceedings were initiated against the appellant under Regulation 20 by issuance of the Show Cause Notice dated 17.6.2014 and

thereafter their CHA licence was revoked by way of impugned order on the ground that one M/s Harsh Enterprises had imported the consignment

declared to be 'DVD Parts DVM3 MN-IW in the Bill of Entry, the appellant of its clearance on examination, the goods were found to be DVE Pick

Up Unit and accordingly, the department, declared value of the goods was on lower side. It was alleged that the appellant being custom broker has

involved with the importer and has failed to discharge his obligation as Customs Broker has envisaged under Custom Broker Licensing Regulation

2013. Accordingly, pending the completion of enquiry, the Commissioner vide order dated 6.12.2013 suspended the appellant's license and thereafter

post suspension decision, hearing was also granted and finally their license was suspended. Thereafter, a Show Cause Notice was issued to the

appellant on 17.6.2014 to initiate proceedings in terms of Regulation 22 of CHALR, 2004 and Regulation 20(1) of CBLR, 2013 and thereafter their

Custom Broker licence was revoked vide order dated 13.2.2015. Aggrieved from the said order, the appellant is before us.

The Id. Counsel for the appellant appeared and submits that in, this case the DRI, intimated to the adjudicating authority on 7.10.2013 which was

received in their office on 18.10.2013 and thereafter DRI issued a Show Cause Notice dated 30.10.2013 under Customs Act, 1962 and the Show

Cause Notice under Regulation 18 read with Regulation 20 of the Custom Broker Licensing Regulation 2013 was issued on 17.6.2014 which is beyond

the prescribed time limit as per Regulation 20 of the said Regulation. Therefore, the order of revocation of Custom Broker Licensing is to be set aside

in the light of the decision of this Tribunal in the case of M/s Surpass Freight Forwarders vide Final Order No. 41020/2015 dated 26.8.2015. He also

relied on the decision of the Hon'ble High Court of Madras in the case of CC Vs. A.M. Ahmed & Co. in writ petition No.371/2015 vide order dated

2.7.2015.

On the other hand, Id. DR opposed the contention of Id. Counsel and submits that it is admitted fact that the appellant has violated the regulation of

Custom Broker Licensing Regulation 2013 and their license was also suspended. Therefore, the show cause notice was issued and after issuing of the

Show Cause Notice the order is passed on merits.

Heard the parties. Considered the submissions.

It is case of revocation of Custom Broker License under Custom Broker Licensing Regulation, 2013. Regulation 20 of such regulations deals with

the procedure for revoking license or imposing penalty which is re-produced as under:

(1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent within ninety days from the date of receipt of

offence report, stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent 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 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.

(2) The Commissioner of Customs may, on receipt of the written statement from the Customs House Agent, or where no such statement has

been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or

Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent.

(3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs 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 House Agent, for the purpose

of ascertaining the correct position.

(4) The Customs House Agent 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 shall prepare a report of

the inquiry recording his findings and submit his report within ninety days from the date of issue of a notice under sub-regulation (1).

(6) The Commissioner of Customs shall furnish to the Customs House Agent a copy of the report of the Deputy Commissioner of Customs or

Assistant Commissioner of Customs, and shall require the Customs House Agent to submit, within the specified period not being less than

thirty days, any representation that he may wish to make against the findings of the Deputy Commissioner of Customs or Assistant

Commissioner of Customs.

(7) The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the

Customs House Agent, pass such orders as he deems fit within ninety days from the date of submission of the report by the Deputy

Commissioner of Customs or Assistant Commissioner of Customs, under sub-regulation (5).

(8) Any Customs House Agent aggrieved by any decision or order passed under regulation 20 or sub-regulation (7) of regulation 22, may

prefer an appeal under section 129A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under sub-

section (1) of section 129 of the Act.

As per Regulation 20(1), the Commissioner of Customs is required to issue a notice in writing to the Custom Broker within a period of 90 days from

the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the license or impose penalty. Admittedly, in this case

the DRI has intimated to the Commissioner regarding offence vide their letter dated 7.10.2013 which was received in the office of the Commissioner

on 8.10.2013. Furthermore, a Show Cause Notice was also issued to the appellant by the DRI under Customs Act, 1962 on 31.10.2013 and the Show

Cause Notice under Regulation 20(1) has been issued on 17.6.2014 which is admittedly beyond a period of 90 days prescribed under Regulation 20(1)

of the Customs Broker CBLR. 2013. Therefore, we hold that proceedings against the appellant are not sustainable being time-barred as held by this

Tribunal in the case of M/s Surpass Freight Forwarders (supra) wherein this Tribunal has observed as under:

Be that it may as to the involvement of the appellant and commitment of the offence, the limitation prescribed by law cannot be given

goby. When customs failed to adhere to the limitation, it lost its remedy under Regulation 20 of CBLR 2013, following the decision of the

Hon'ble Madras High Court in the aforesaid judgement.

Record reveals that against the allegation of the commitment of the offence by appellant, it was issued notice dated 31.10.2013 under

Customs Act, 1962. is no result of that proceedings on record nor either side informed.

No doubt, consequent upon the allegation made by DRI as to the commitment of the offence made by appellant, prohibitory order was

issued on 29.10.2013 by the Commissioner of Customs, Mumbai. The appellant replied against that prohibitory order on 8.11.2013 to the

Commissioner of Customs (General), Mumbai. Even the appellant also filed reply to the offence report dated 7.10.2013 on 22.11.2013

before the Commissioner of Customs, Chennai. Despite entire materials were there on record, before the Commissioner of Customs,

Chennai, he failed to proceed against the appellant in terms of Regulation 20 within the stipulated time. When that Regulation is mandatory

and requires the public authority to act publicly to pass public order and he fails to do so within the time prescribed, recourse to that

provision is no more available to him on the expiry of the period so stipulated. Therefore, when the mandatory requirement of the

Regulation was paid scanty regard, the appellant is correct to plead that he is entitled to the benefit of the principles relating to limitation

laid down by the judgment of the Hon'ble Madras High Court in the aforesaid judgement.

It is surprising that when the offence report came to record on 7.10.2013, revocation of licence was made on 19.1.2015 and that too

without a notice issued within the period stipulated by Regulation 20 of CBLR 2013. In the meantime, 16 months have elapsed. No doubt the

action under the Custom Broker Licensing Regulation, 2013 is without prejudice to the consequence under Customs Act, 1962. But violation

of principles of natural justice by a belated action of the authority made its order fatal. Therefore, appeal is allowed following the decision

of the Hon'ble Madras High Court in the aforesaid judgement and the impugned order is set aside.

We further find that the same view was taken by the Hon'ble High Court of Madras in the case of CC Vs. A.M. Ahmed & Co (supra) wherein the

Hon'ble High Court held that the date of show cause notice issued by DRI shall be the date of receipt of offence report and within 90 days thereof

notice under Regulation 20 could have been issued. As the time limit prescribed by the Regulation under CBLR, 2013 has not been followed by Id.

Commissioner of Custom (General), New Delhi. Therefore we set aside the proceeding initiated against the appellant under CBLR, 2013. In result,

the order of revocation of CHA Custom Broker License and forfeiture of security deposit is set aside by making the custom broker licence operative

with immediate effect.