Custom, Excise & Service Tax Tribunal
M/S Shiva Khurana vs Cc, New Delhi (Import & General) on 21 April, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R. K. Puram, New Delhi. Date of hearing/ decision: 21.04.2016 For Approval and Signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. B. Ravichandran, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Customs Appeal Nos. 53162/2015 & 60058 of 2013 (Arising out of the Order in Original Nos. 14/NK/COMMR/POLICY/2015 & 27/NLB/POLICY/2013dated 23.02.2015 & dated 18.06.2013 passed by the Commissioner of Customs (General), New Delhi. M/s Shiva Khurana Appellant Vs. CC, New Delhi (Import & General) Respondent
Appearance:
Mr. Piyush Kumar, Advocate for the appellant Shri A. Jain, DR for the respondent Coram: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. B. Ravichandran, Member (Technical) Final Order Nos. 51367 -51368/2016 Per: B. Ravichandran:
The present appeal has been filed against the order-in-original dated 23.02.2015 passed by the Commissioner of Customs (Import & General) New Customs House, New Delhi in which the CHA licence issued to the appellant was revoked in terms of Regulation 20 of the Customs House Agent Licensing Regulations, 2004 (CHALR, 2004). The security deposit of Rs. 75,000/- furnished by the appellant was also ordered to be forfeited. The appellant have filed miscellaneous application for early hearing which has been allowed.
2. The facts leading to the present appeal are that the appellant had obtained CHA license No. R-28/Del/Cus/2010. Using the above CHA licence the appellant filed several shipping bills for export of goods by five different exporters in the month of September, 2011 at Air Cargo Exports, New Customs House, New Delhi. Though, the consignments were allowed for export by the said officers after verifying the description etc., on examination by the officers of SIIB, Export Commissionerate, mis-declaration of value as well as descriptions were detected. The consequent investigation resulted in show cause notice dated 15.03.2012 which was adjudicated by the Commissioner of Customs (Export) vide order dated 12.03.2013. In this order, in addition to confiscation of the goods involved as well as imposing penalty on the exporters, the Commissioner also imposed penalty of Rs. 50 lakhs on the appellant under Section 114 of the Customs Act, 1962. In addition, the Commissioner (Exports) also directed initiation of enquiry and action against the appellant under the relevant CHALR. The proceedings under CHALR, 2009, were initiated by the Commissioner (Imports & General), New Delhi by immediate suspension of the appellants CHA licence vide order dated 11.04.2013. The suspension was also confirmed by her vide order dated 18.06.2013 against which a separate appeal No. 600581 /2013 has been filed. Show cause notice dated 12.07.2013 was issued proposing revocation of licence and forfeiture of security deposit. The Deputy Commissioner by whom necessary enquiry was initiated issued, his report on 27.11.2014. After obtaining submissions from the appellant on the enquiry report, the Commissioner passed the impugned order dated 23.02.2015.
3. The appellant has challenged the order both on time limits as well as on merit. On time limits the appellants case is that the Commissioner (Import) failed to observe the time limit of ninety days in the issue of show cause notice from the date of receipt of offence report. The total time period of nine months prescribed for completion of regular proceedings has not been complied with in the present case. On merits, the appellant has denied the allegations of contravention of the provisions of Regulation 13(o) as well as 19(8) of the CHALR, 2004.
4. Ld. AR reiterated the impugned order and stated that the revocation of licence has been made on justifiable grounds.
5. Under the CHALR, 2004 Regulation 20 empowers the Commissioner to suspend or revoke the licence and the procedure which needs to be followed in this regard is found in Regulation 22. For ready reference Regulation 22 is reproduced as under:
22. Procedure for suspending or revoking licence under Regulation 20-
(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 defence 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.
6. The time schedules prescribed under these Regulations during the relevant period are as follows:
CHALR, 2004 CBLR, 2013 Purpose Specified Time Period 22(1) 20(1) Insurance of Show Cause Notice to the CHA/CB by the Commissioner. Within 90 Days from the date of receipt of an offence report. 22(5) 20(5) Preparation of Report of Inquiry by the Deputy/ Assistant Commissioner. Within 90 Days from the date of issuance of the show cause notice. 22(7) 20(7) Passing of order by the Commissioner.
Within 90 Days from the date of submission of the Inquiry Report. TOTAL DURATION 270 DAYS OR 9 MONTHS
7. Since what constitutes offence report has not been spelt out in the regulation, the same will have to be inferred from the circumstances of the case. From the records we find that the licensing authority namely the Commissioner of Customs (Import & General) has been apprised of the matter by the Commissioner of Customs (Export) through Order-in-original dated 12.03.2013. This may be practically considered as the offence report. The show cause notice proposing revocation has been issued on 12.07.2013, well beyond the ninety days limit prescribed for the same in regulation 22(1). The inquiry report which is mandated to be completed within ninety days from the date of the show cause notice has been filed only on 27.11.2014, very much beyond the ninety days time limit prescribed for the same. Finally the impugned order has been passed within ninety days from the date of inquiry report. However, the overall time taken were completion of regular proceeding is a period of 23 months, which is much beyond the allowed total duration of nine months. The Honble High Court of Madras in A.M. Ahamed & Co. vs. Commissioner of Customs (Imports), Chennal 2014 (309) ELT 433 (Mad.) has 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). Therefore, considering the fact that the whole proceedings are to be commenced within a time limit and also concluded within a time frame, I am of the view that the show cause notice issued to the petitioner on 8.5.2010 with a copy marked to the first respondent should be taken as the date of receipt of the offence report. Consequently, the period of 90 days should commence only from that date. If so calculated, the impugned proceedings have obviously been initiated beyond the period of 90 days. The ratio of the above decision that the time limits prescribed are to be mandatorily followed has also been followed by this Tribunal in several of its decisions such as-
(i) 2016-TIOL-157-CESTAT-DEL M/s Altharva Global Logistics vs. Commissioner of Customs, New Delhi
(ii) 2015-TIOL-2467-CESTAT-DEL M/s Lohia Travels and Cargo vs. Commissioner of Customs (General), New Delhi.
(iii) 2016-TIOL-524-CESTAT-DEL M/s Zen Cargo Movers Pvt. Ltd. vs. Commissioner of Customs, New Delhi.
8. We find the Honble High Court decision cited above is directly dealing with CBLR and sanctity time limit under the regulation. As such the order of the lower authority which was issued without adhering to the time schedule is liable to be set aside on these grounds. Accordingly, we set aside the impugned order dated 23.02.2015 of the original authority and allow the appeal.
(Operative portion pronounced in open Court).
(Archana Wadhwa) Member (Judicial) (B. Ravichandran) Member (Technical) Pant