Custom, Excise & Service Tax Tribunal
Shri Prem Kumar Singh vs Commissioner Of Customs (General), ... on 6 May, 2016
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. IV APPEAL NO. C/88377/14 (Arising out of Order-in-Original No. 03/2014-15 dated 15.04.2014 passed by the Commissioner of Customs (General), Mumbai.) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) =====================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
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Shri Prem Kumar Singh
Appellant
Vs.
Commissioner of Customs (General), Mumbai
Respondent
Appearance:
Shri A.K. Prabhakar, Advocate
for Appellant
Shri D.K. Sinha, Assistant Commissioner (A.R.)
for Respondent
CORAM:
HONBLE SHRI RAMESH NAIR, MEMBER (JUDICIAL)
HONBLE SHRI C.J. MATHEW, MEMBER (TECHNICAL)
Date of Hearing: 06.05.2016
Date of Decision: 21.06.2016
ORDER NO.
Per: Ramesh Nair:
The fact of the case is that the appellant is a Customs Broker holding Licence No. R-01/DEL/CUS/2006 issued by New Delhi Customs and is transacting Customs Broker business at Mumbai Customs Zone under Regulation 7(2) of Customs Broker Licensing Regulations, 2013 (CBLR-2013) w.e.f. 23.01.2012 under C.B. No. 11/1626. The Customs Broker is a proprietorship firm having proprietor Shri Prem Kumar Singh. The learned Commissioner vide Order No. 67/2013-14 dated 20/24.03.2014 prohibited the appellant from operating the business in Mumbai Ports, thereafter vide impugned order dated 15.04.2014 continued the prohibition imposed vide order dated 20.03.2014. The learned Commissioner passed the prohibition order on the allegation of contravention of the Regulation 10, 11(a), 11(b), 11(d), 11(e), 11(m), 11(n) of CBLR, 2013. The main allegation on the appellant is that he has sublet his Customs Broker licence to one Shri N.K. Mishra for monetary benefits. The entire charge was made on the basis of confessional statement of Shri N.K. Mishra. As per the fact of the case the prohibition order was passed on 20.03.2014, however no enquiry proceeding have yet started.
2. Shri A.K. Prabhakar, learned Counsel for the appellant submits that offence report dated 07.03.2014 was forwarded by the ICD Mulund to the Commissioner of Customs, NCH, Mumbai-I. On that basis the Commissioner of Customs (General), NCH, Mumbai-I has prohibited the CHA from working in all the sections of the Mumbai Zone-I, II & III and gave a post decisional hearing to the Customs Broker vide Order No. 67/2013-14 dated 20.03.2014 and forwarded the case to Delhi Commissionerate for further action. He submits that more than two years have been passed since the appellant was prohibited from transacting his business in Mumbai Customs. He submits that even for completion of enquiry proceeding, total period stipulated is nine months, whereas even after passing of more than two years the enquiry proceedings have not even initiated, therefore the prohibition should not be allowed to continue. He submits that even on the merits of the case, the action is arbitrary, that as of now the entire case is based on statement of one Shri N.K. Mishra and the appellant has taken firm stand that he is nothing to do with the person called Shri N.K. Mishra and he had not sublet the licence for carrying out any activity on his behalf. He submits that only on basis of Shri N.K. Mishras sale statement action of prohibition of licence is illegal and incorrect. He submits that this Tribunal time and again has passed various orders wherein the suspension order was revoked when the enquiry was not completed within stipulated time of nine months. Therefore following those decisions of the Tribunal the continuation of prohibition in the present case is contrary to law lay down in case laws. He further submits that even if time period is not stipulated, the action is required within the reasonable period. In this support he placed reliance in the following judgments:-
(i) State of Punjab Vs. Bhatinda District Co-op. Milk P. Union Ltd. [2007 (217) ELT 325 (SC)]
(ii) A.B. Consultants Vs. Commissioner of Customs, New Delhi [2014 (310) ELT 917 (Tri.-Del.)]
(iii) Commissioner of Customs (Sea Port Import), Chennai Vs. CESTAT, Chennai [2014 (310) ELT 673 (Mad.)] On the preliminary objection by the learned A.R. that the appeal is not maintainable as the same was filed against prohibition order, whereas the appeal lies only against the order of suspension or revocation of the Customs Broker licence. He submits that as per Section 129A of the Customs Act, 1962 any decision or order passed by the Commissioner of Customs as an adjudicating authority is appealable before this Tribunal. In the present case the Commissioner has passed the prohibition order in the capacity of adjudicating authority as the entire process of adjudication such as granting of personal hearing, accepting the reply, thereafter by giving the detail finding passed the reasoned order, therefore this order of prohibition is covered under clause (a) of sub-section (1) of Section 129 of the Act. Therefore, the same is appealable. In the same Section this particular nature of order was not excluded for the purpose of filing appeal. In support of his submission on the maintainability, he placed reliance on the following judgments-
(i) Premier Shipping Agencies Vs. Commissioner of Customs [2015 (315) ELT 27 (Del.)]
(ii) Flyjac Logistics Pvt. Ltd. Vs. Commissioner of Central Excise, Customs & Service Tax, Bangalore-I [2014 (314) ELT 105 (Tri.-Bang.)]
(iii) Milliard Logistics Pvt. Ltd. Vs. Commissioner of Customs (General), Mumbai [2015 (325) ELT 162 (Tri.-Mumbai)] He further submits that in the old Regulation CHALR, 2004 under Regulation 22(8) there was restriction about filing appeal, accordingly only orders of suspension and revocation were appealable, whereas as per Regulation 21 of CBLR, 2013 any order passed by the Commissioner under this Regulation is appealable under Section 129A of the Act. Therefore as per the present CBLR, 2013 legal position became very clear that prohibition order is undisputedly appealable before this Tribunal.
3. On the other hand Shri D.K. Sinha, Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. On maintainability he submits that the appeal is not maintainable before this Tribunal for the reason that under Section 129A of the Customs Act, 1962, no appeal lies against the order of prohibition passed under Regulation 23 of the CBLR, 2013, framed under Section 146(2) of the Customs Act, 1962. In support of his submission, he placed reliance on the following judgments:-
(i) S.R. Sale & Co. Vs. CC(G), Mumbai [2013 (295) ELT 653 (Bom.)]
(ii) Unique Logistic Solution (I) P. Ltd. Vs. C.C., Mumbai [2015 (326) ELT 594 (Tri.-Mumbai)]
(iii) Rajendra Purohit Vs. Union of India [2012 (278) ELT 54 (Guj.)]
(iv) Shri Balaji Logistics Vs. Commissioner of Central Excise, Ghaziabad [2012 (286) ELT 241 (Tri.-Del.)]
(v) Amit K. Dedhia Vs. Jamnagar [2013 (295) ELT 84 (Tri. Ahmd.)]
(vi) Threestar Solutions & Services Pvt. Ltd. Vs. CC, Mumbai [2015 (329) ELT 621 (Tri.-Mumbai)] He submits that the prohibition order is in the nature of administrative orders hence not appealable under Section 129A of the Act in the light of the above judgments. He submits that under Regulation 23, the Commissioner of Customs has been vested with the power to prohibit any Customs Broker from working in one or more sections of the Customs Stations. Therefore there is no infirmity of the prohibition order passed by the Commissioner. He further submits that as per sub-Section (2) of Section 146, Board is empowered to frame Regulations for the purpose of the appeals, if any, against an order of suspension or revocation of a licence. He submits that the impugned order is neither suspension nor revocation order of the licence, therefore same is not appealable under Section 129A of the Customs Act. He submits that in the case of S.R. Sale & Co. (supra) Hon'ble High Court of Bombay dealt with the provision of Section 129A & Section 146(2) of the Customs Act and held that prohibition order is not appealable before this Tribunal.
4. We have carefully considered the submissions made by both the sides. We find that before proceeding on the merit of the case, we would like to address the maintainability issue that whether the prohibition order passed by the Commissioner under Regulation 23 of CBLR, 2013 is appealable before this Tribunal. We find that on the issue of maintainability there are contrary views of the Hon'ble High Court of Bombay and Hon'ble High Court of Delhi. As regard the judgment relied upon by the learned A.R. in the case of S.R. Sale & Co. (supra), we find that the judgment was passed in context with Regulation 22(8) of CHALR, 2004. On the contrary Hon'ble Delhi High Court judgment in the case of Premier Shipping Agencies (supra) passed in context with Regulation 21 of CBLR, 2013. For ease of understanding of provision made under CHALR and CBLR, the relevant Regulations are reproduced below:-
Regulation 22(8) of CHALR, 2004 (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 129A of the Act.
Regulation 21 of CBLR, 2013 Appeal by Customs Broker - A Custom Broker, who is aggrieved by any order passed by the Commissioner of Customs under these Regulations, 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 129A of the Act. From the reading of the above Regulations, in both the Regulations, it can be seen that in CHALR, 2004 under Regulation 22(8) the Customs House Agent could prefer an appeal under Section 129A only against the decision or order passed under Regulation 20 or sub-regulation 7 of Regulation 22. These two Regulations deals with the order of revocation or suspension. Whereas unlike in Regulation 22(8) of CHALR, 2004, in Regulation 21 of CBLR, 2013, a Custom Broker has right to prefer an appeal before the Tribunal under Section 129A against any order passed by the Commissioner of Customs under these Regulations. From the comparison of both the Regulations, it is crystal clear that in CHALR, 2004 the remedy of filing appeal before the Tribunal was only against the order of revocation and suspension. However, the legislature very consciously brought amended provision by way of Regulation 21 in CBLR, 2013 that any order passed under CBLR, 2013 Regulation is appealable before the Tribunal under Section 129A. In view of the clear distinction between both the Regulations as regard the provision of filing appeal, the decision of Hon'ble Delhi High Court is clearly applicable in the present case. As the present case is also dealing with the Regulation of CBLR, 2013, all the judgments relied upon by the learned A.R. are relate to appeal provision made under CHALR, 2004, therefore all the judgments stand distinguished. We are therefore of considered view that this appeal is clearly maintainable against the prohibition order.
5. As regard the prayer of the appellant for setting aside the prohibition order, we find that the offence report was made and forwarded by ICD Mulund to the Commissioner of Customs, NCH, Mumbai-I on 07.03.2014. The prohibition order was issued on 20.03.2014 and forwarded the case to Delhi Commissionerate for further action. We find that the prohibition has been continued vide the impugned order dated 15.04.2014. However after passing of more than two years no enquiry proceeding has been initiated. As per Regulation 20 of CBLR, 2013 read with CBEC Circular No. 09/10-Cus. dated 08.04.2010 overall time limit for concluding the enquiry provided is nine months from dated of receipt of the offence report. In the present case it is undisputed that the offence report was received on 11.03.2014. However after the lapse of more than two years there is no whisper regarding any proceeding of enquiry by the Department and the appellant is out of the job in three sections of the Mumbai Customs for more than two years. This Tribunal has been taking consistent view even in case of suspension of licence, that if the enquiry proceeding is not completed within stipulated time period of nine months, the suspension order was revoked and the CHA was allowed to operate. In this regard, we refer to the following decisions of this Tribunal:-
(i) Bhushan Port World Vs. Commissioner of Customs (General), Mumbai Order No. A/1663/14/CSTB/C-I dated 16.10.2014.
5.1. As per the provisions of Regulation 20 of CBLR, 2013, time-limits have been prescribed for completing the enquiry proceedings. A time-limit of 90 days have been prescribed for issue of notice from the date of receipt of an offence report; another 30 days time has been given to the CHA to file reply to the notice; another 90 days time to the inquiry officer to complete the inquiry report; another 30 days for the CHA to make his submission against the inquiry report. Thus, overall a period of 9 months has been prescribed for completing the inquiry proceedings and passing of an order under the provisions of law. The CBEC also, vide Circular No. 9/2010 dated 08/04/2010 has reiterated that these time-limits should be adhered to. This Tribunal also in the case of Bombay Shipping Agency has held that, if the inquiry is not completed within the stipulated period, the suspension need not be continued. In spite of such time-limits prescribed, the Customs authorities have not taken up the matter with any seriousness. There is no provision in the CBLR, 2013 or in the predecessor CHALR, 2004 to extend these time-limits by any authority. Inasmuch as 15 months has passed since the passing of the suspension order and the Customs authorities have not bothered to complete the inquiry within the stipulated period of 9 months, we are of the considered view that this suspension need not be continued and the CHA should be allowed to function in this capacity. However, the Customs authorities are at liberty to complete the inquiry proceedings as early as possible.
(ii) Bombay Shipping Agency Vs. Commissioner of Customs (General), Mumbai [2014 (299) ELT 352 (Tri.-Mumbai)] 6. Therefore, in these circumstances, we are of the view that, without completing the enquiry, the charges against the appellant could not be confirmed. In view of the fact that the appellant has an unblemished track record and also considering the fact that his licence has been suspended for a period of more than 10 months or so, we are of the view that there is no need to continue with the suspension. Similar views have been taken by this Tribunal in the cases of R.S. Yadav & Company vs. Commissioner of Customs, New Delhi, K.S. Sawant & Co. vs. Commissioner of Customs (General), Mumbai cited supra.
7. Accordingly, we revoke the suspension of the CHA licence done by the impugned order. The Customs is at liberty to conduct the enquiry against the appellant-CHA in terms of Regulation 22 of the CHALR, 2004 and to take appropriate action in accordance with law on completion of such enquiry.
6. In view of the above judgments, this Tribunal has consistently taken view that when the Department is unable to complete its enquiry at given time of nine months, the Customs Broker should not be made suffer. In the present case it is very clear that after lapse of more than two years from date of prohibition neither enquiry proceeding has been initiated nor concluded within the stipulated time of nine months. Therefore, the Department cannot be allowed to continue the prohibition on the appellant. We therefore set aside the impugned order and allow the appeal.
(Pronounced in Court on 21.06.2016) (C.J. Mathew) (Ramesh Nair) Member (Technical) Member (Judicial) Sp 10 APPEAL NO. C/88377/14