Custom, Excise & Service Tax Tribunal
Ambika Enterprises vs C.C. (Import & General), New Delhi on 26 May, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-II Date of hearing/decision: 26.5.2016 Customs Appeal No.53246 of 2015 and 3650 of 2012 Arising out of the order-in-original No.71/NK/Policy/2015 dated 1.5.2015 passed by the Commissioner of Customs (General), NCH, New Delhi. For Approval and Signature: Honble Mr. D.N. Panda, Judicial Member Honble Mr. V. Padmanabhan, Technical Member 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 Ambika Enterprises .. Appellants Vs. C.C. (Import & General), New Delhi . Respondent
Appearance:
Present Shri G K Sarkar with Shri Prasant Srivastava, Advocates for the appellants Present S/Shri Rajeev Gupta and Ranjan Khanna, A.Rs. for the respondent Coram: Honble Mr. D.N. Panda, Judicial Member Honble. Mr. V. Padmanabhan, Technical Member Final Order No.51890 51891/2016 Per V. Padmanabhan:
The present appeals have been filed against the Order-in-Original dated 11.5.2015 passed by the Commissioner of Customs (General), New Custom House, New Delhi in which CHA licence issued to the appellant was revoked in this order. Security deposit of Rs.75,000/- furnished by the appellant was also ordered to be forfeited. The appellant has also filed separate appeal against the suspension of the licence which was done earlier on 27.8.2012. Both the appeals have been heard analogously and are being decided by this order.
2. Commissioner of Customs, ICD, TKD, New Delhi noticed serious irregularities on the part of the appellant in connection with filing Bill of Entry No.856627 dated 14.12.2009 and an action was initiated against the importer as well the appellant for improper import. Commissioner of Customs, ICD informed the Commissioner of Customs (General) vide his order dated 5.7.2012 recommending action to be taken against the appellant under CHALR. The CHA licence of the appellant was immediately suspended on 17.7.2012 which was confirmed by the Commissioner (Import & General) vide his order dated 27.8.2012. After necessary investigation, show cause notice under Regulation 22 of the CHALR was issued on 30.1.2014, proposing revocation of CHA licence and forfeiture of security deposit. The Deputy Commissioner to whom the necessary enquiry was entrusted, submitted his enquiry report on 27.2.2015. After obtaining submission of the appellant on the enquiry report, the Commissioner passed the impugned order revoking the CHA licence as well as forfeiture of security deposit on 11.5.2015.
3. The appellant has challenged the order both on time limit as well as on merits. On time limit the appellants case is that the Commissioner of Customs (General) failed to observe the time limits strictly prescribed under CHALR. On merits, the appellant has denied allegation of contravention of the provisions of CHALR.
4. Ld. A.R. fairly conceded that strictly speaking, the time limit prescribed under CHALR has not been complied with. However, he pleaded that the allegations against the appellant were very serious. He further explained that the appellant was involved in filing Bill of Entry falsely in the name of Global Logic India Pvt. Ltd. and has caused huge loss to Government revenue by getting the importers goods cleared duty free on the strength of fake and forged procurement certificates.
5. Heard both sides and perused records.
6. 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.
The CHALR, 2004 were replaced with Customs Brokers Licensing Regulations 2013 9CBLR 2013)
7. 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
8. 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 , ICD through Order-in-original dated 5.7.2012. This may be practically considered as the offence report. The show cause notice proposing revocation has been issued on 30.1.2014, 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 27.2.2015, 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 34 months, which is much beyond the allowed total duration of nine months.
9. 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. Honble Madras High Court has further emphasized the observance of time limits strictly under CHALR 2004/CBLR 2013 in Saro International Freight Systems vs. Commissioner of Customs, Chennai reported in 2015 TIOL 2916 HC MAD CUS. The Honble High Court in para 28 of the above judgment has held:
28. .. It is pertinent to mention here that the CBLR, 2013 have replaced the CHA Regulations. The CHA regulations did not have any time limit to complete the proceedings. Therefore, by a Circular 09/2010 dated 8.4.2010, the necessary to include a time limit for initiating action was addressed by the Board after filed inspection and by an notification dated 8.4.2010, amendments prescribing time period for initiating action and completing proceedings was made. The same was given effect by notification dated 20.1.2014. Whereas , under CBLR, 2013 having found the necessity to prescribe a period, the Central Board, the statutory authority had included the same in Regulations itself, when they were brought not in force. Therefore, when time light is prescribed in Regulations, which empowers action under Regulation 18 by following the procedure in Regulation 20(1), the use of the term shall cannot be termed as directory. Under such circumstances, the rule can only be termed as Mandatory.
The ratio of the above decisions that the time limits prescribed are to be mandatorily followed has also been followed by this Tribunal in several 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.
10. We find the Honble High Court decisions cited above are 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 11.5.2015 of the original authority and allow the appeals.
(Operative portion pronounced in open Court).
(D.N. Panda) Judicial Member (V. Padmanabhan) Technical Member scd/ 1