Madras High Court
M/S.Princy Shipping Lines vs The Commissioner Of Customs on 4 October, 2024
Author: Mohammed Shaffiq
Bench: Mohammed Shaffiq
W.P(MD)No.23239 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 04.10.2024
CORAM
THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ
W.P(MD)No.23239 of 2024
and
W.M.P(MD)No.19674 of 2024
M/s.Princy Shipping Lines,
(Pan No.AATFP0937G),
Represented by its Partner,
Jebamani. ... Petitioner
Vs.
The Commissioner of Customs,
Custom House,
New Harbour Estate,
Tuticorin-628 004. ... Respondent
Prayer : Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Certiorari, to call for the entire records of
the respondent herein leading to the issuance of the impugned order, dated
12.06.2024 issued in C.No.VIII/13/33/2016-Part-1, DIN -
20240681OH0000888B49 and Order-in-Original TUT-CUSTM-PRV-
COM-17/2024, Corrigendum to Order-in-Original TUT-CUSTM-PRV-
COM-17/2024, dated 12.06.2024 in File C.No.VIII/13/33/2016-Part-1, dated
04.07.2024 passed by the respondent herein and to quash the same as illegal,
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W.P(MD)No.23239 of 2024
arbitrary and in violation of principles of natural justice, unreasonableness and
passed without jurisdiction.
For Petitioner : Mr.A.K.Jayaraj
For Respondent : Mr.R.Nandhakumar
Senior Standing Counsel
ORDER
This writ petition is filed challenging the impugned order, dated 12.06.2024 issued in C.No.VIII/13/33/2016-Part-1, DIN – 20240681OH0000888B49, inter alia on the premise that same was passed in contravention of the procedure laid down for the revokation of Custom Brokers License, under 17(1) of Customs Brokers Licensing Regulations, 2018. (Hereinafter refferd to as “CBLR, 2018”)
2.The learned counsel for the petitioner would submit that the impugned order revoking the license under CBLR is made in contravention of the mandate contained in CBLR, 2018. Regulation 17(1) of CBLR, 2018 contemplates that the Principal Commissioner has to issue a notice in writing to the Customs Broker within a period of 90 days from the date of receipt of an https://www.mhc.tn.gov.in/judis 2/12 W.P(MD)No.23239 of 2024 offence report, stating the grounds on which it is proposed to revoke the license or impose penalty requiring the said broker to submit written statement of defense. Regulation 17(1) of CBLR, 2018 is extracted hereunder:
“17. Procedure for revoking license or imposing penalty.— (1)The Principal Commissioner or Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety 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 requiring the said Customs Broker 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 Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.”
3. Referring to the above regulation, the learned counsel for the petitioners would submit that no notice as contemplated under the Regulation 17(1) of CBLR, 2018 was issued to the petitioner by the respondent before passing the impugned order, dated 12.06.2024 i.e., before revoking its license.
The learned counsel for the petituoners would thus submit that the impugned order passed by the respondent is illegal, arbitrary and in violation of principles of natural justice.
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4. The learned counsel for the respondent sought for time to verify whether the notice under Regulation 17(1) of CBLR, 2018 have been issued.
It was reported by the learned counsel for the respondent that he is not able to trace the notice issued under Regulation 17(1) of the CBLR, 2018.
5. Before procceding further, it may be relevant to point out that that Regulations 22 of the erstwhile CBLR, 2004; Regulations 20 of the erstwhile CBLR, 2013 and Regulations 17 of the CBLR, 2018 are pari materia to each other. The said provisions of the regulations are extracted hereunder:
(i) Regulation 22 of the erstwhile CBLR, 2004:
“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 defense and also to specify in the said statement whether the Customs House Agent https://www.mhc.tn.gov.in/judis 4/12 W.P(MD)No.23239 of 2024 desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs."
(ii) Regulation 20 of the erstwhile CBLR, 2013:
"20.Procedure for revoking licence or imposing penalty.
(1) The Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the licence or impose penalty requiring the said Customs Broker 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 Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs."
(iii) Regulation 17 of the erstwhile CBLR, 2018:
“17. Procedure for revoking license or imposing penalty.— (1) The Principal Commissioner or Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety 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 requiring the said Customs Broker 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 https://www.mhc.tn.gov.in/judis 5/12 W.P(MD)No.23239 of 2024 said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.”
6. In these circumstances, it may be relevant to note that the mandatory nature of Regulation 17(1) of the CBLR, 2018 has come up for consideration before this court, in the case of A.M. Ahamed & Co. v. Customs, reported in 2014 SCC OnLine Mad 5957, wherein while considering Regulations 20 and 22 of the erstwhile CBLR, 2004, which is pari materia to the present Regulation 17(1) of the CBLR,2018, it was held that the service of notice under Regulations 20 of the erstwhile CBLR, 2013 was mandatory and it must be strictly adhered to. The relevant portion of the said judgement is extracted hereunder:
"10. The impugned order is challenged primarily on the following grounds:-
(1) The impugned proceedings were not initiated within the period of 90 days prescribed under Regulation 22(1).
(2) The entire charge for which the petitioner was proceeded against, relate to an Import made by a company by name M/s. I-Tech Imports and Exports. That company was also issued a show cause notice dated 12.05.2010. But that company https://www.mhc.tn.gov.in/judis 6/12 W.P(MD)No.23239 of 2024 went to the Board of Settlement Commission and got an order in their favour. Hence there is no question of penalising the petitioner.
(3) That the impugned order is in violation of the principles of natural justice.
.....
13. ....
Regulation 22 is extracted as follows:-
“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 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.
https://www.mhc.tn.gov.in/judis 7/12 W.P(MD)No.23239 of 2024 (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.
.....
14. Under sub-regulation (1) of Regulation 22, the Commissioner of Customs should issue a notice in writing to the Customs House Agents within 90 days from the date of receipt of offence report. There is no dispute on the question of law that if a notice in writing is not issued within 90 days from the date of receipt of offence report, the proceedings under Section 22(1) will stand vitiated. But in the case on hand, there is a dispute about two things namely, (1) as to what an offence report is; and (2) as to how to calculate the period of 90 days prescribed in Regulation 22(1).
15. According to the petitioner, the Department of Revenue Intelligence investigated into the alleged incident and issued a show cause notice on 18.05.2010. This show cause notice was allegedly sent to the Chennai Commissionerate also and hence the issuance of the show cause notice by DRI has to be taken as the https://www.mhc.tn.gov.in/judis 8/12 W.P(MD)No.23239 of 2024 date of receipt of the offence report. Alternatively, it is contended by the petitioner that at least the date of the Order-in-Original namely 31.01.2011 imposing penalty could have been taken as the date of receipt of offence report, since the same was also communicated to the Chennai Commissionerate. The first respondent has calculated the period of 90 days only from the date of receipt of the prohibition order issued by the Commissioner of Customs, Tuticorin on 06.09.2012. This, according to the petitioner, will not satisfy the requirement of Regulation 22.
......
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 08.05.2010 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 https://www.mhc.tn.gov.in/judis 9/12 W.P(MD)No.23239 of 2024 from that date. If so calculated, the impugned proceedings have obviously been initiated beyond the period of 90 days.
......
25. In the case on hand, it is not the contention of the respondents that the time limit prescribed in Regulation 22(1) is only directory and not mandatory. It is not even the contention of the respondents that the time limit prescribed in Regulation 22(1) need not be strictly adhered to. On the question that the first respondent is duty bound to initiate proceedings within 90 days from the date of receipt of offence report, there are no two opinions, at least before me. Therefore, the decision of the Division Bench of the Delhi High Court is of no assistance to the respondents. Hence the first contention is to be upheld."
7. A Fortiori in the present case as notice mandated under Regulation 17(1) of the CBLR,2018 is not even found to be available much less having been served. In view thereof, the impugned proceedings are set aside.
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8. In view thereof, the writ petition is disposed of. No Costs.
Consequently, connected miscellaneous petition is closed.
04.10.2024
NCC : Yes / No
Index : Yes / No
Internet : Yes
BTR
To
The Commissioner of Customs,
Custom House,
New Harbour Estate,
Tuticorin-628 004.
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W.P(MD)No.23239 of 2024
MOHAMMED SHAFFIQ, J.
BTR
W.P(MD)No.23239 of 2024
04.10.2024
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