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Per contra, the learned counsel for the Respondent Mr.Prakash Shah, would vehemently argue that the whole purpose of Regulation 20 is to complete the proceedings initiated against the customs house agent/custom broker in an expeditious manner. According to the learned Counsel Mr. Shah, the suspension cannot be permitted to be continued indefinitely. He would submit that there is specific object in streamlining the procedure and prescribing the time line for conduct and completion of inquiry and for continued suspension of a licence. According to him, if the inquiry is prolonged for no reason and a licence of the customs broker is suspended and on culmination of the inquiry if the charges are not proved, in that contingency it would result into immense loss of earning and loss of livelihood to such customs broker. He would submit that the said Regulations and the time limit have been framed by a responsible SSK 23 Custom Appeal 88-16 authority as high as the CBEC itself. He would invite attention of this Court to the circular No.9/10-CUS, dated 8th April, 2010 and would submit that the Government of India, Ministry of Finance (Department of Revenue), Central Board of Excise and Custom, New Delhi, had issued the said circular and it contains a preface reflecting that it has been brought to the notice of the Board by certain field formations that they are facing difficulties in issuance of CHA Licence for eligible person and in implementation of Customs House Agents Licensing Regulation, 2004. All the aforesaid issues came to be examined by the board in consultation with the custom field formation in the board meeting and there was also a meeting held with the Chief Commissioner of Customs having jurisdiction over major customs houses and thereafter the decision was taken to provide a time stipulation for completion of proceedings of inquiry, on suspension of a licence. In this background, Mr. Shah would submit that the provisions in regard to the time limit contained in the CBLR- 2013 need to be construed as mandatory.

The customs house agent have an important role to play in the entire scenario. He is the person, who acts as an SSK 28 Custom Appeal 88-16 agent and transact the business and has a direct access to the port since he assists the assessee covered by the Customs Act to facilitate the entry or departure of conveyance or the import or export of goods at any customs stations. Since the customs house agent has a direct access to the port, the revenue intended that there should be a regime of discipline governing such customs house agent and only a person who is qualified and in know how of the business relating to the customs would be entitled to be conferred with a licence to act as a customs house agent. To maintain the regime of discipline, the customs house agent is granted a license on passing of an examination and before granting the licence it is imperative for him to enter into an option in Form - D and, if necessary, a surety option in Form - E to continue observation of these regulations and require him to furnish a bank guarantee, postal security and the national saving certificate in the name of the Commissioner of Customs for an amount of Rs.50,000/- for carrying on a business of customs house agent. The customs house licensing regulation also fastens the customs house agent with certain obligation since he acts on behalf of the Company, firms or individuals and in turn acts as SSK 29 Custom Appeal 88-16 their agent and Regulation 13 in detail sets out the obligation of the customs house agent, which mandates him to follow a regime of discipline while he acts so and while he discharges his duty in the said capacity.

11 While construing the provision contained in Section 20 of the regulation whether it is mandatory or directory and whether the word "shall" used in the said regulation be construed as mandatory, it would be necessary to ascertain the real intention of the legislature by carefully evaluating the whole concept of the statute. The question whether the statute is mandatory or directory, would depend on the intention of the legislature and not necessarily merely by looking at the language in which it is clothed. It is mandatory for the Court to look into the nature of the statute and the consequences which would follow from construing it in one way or the other, the ambit of the other provisions, the necessity of compliance of the provisions in question. The circumstance, namely, the statute provides a contingency of the non-compliance of the provisions, the fact that the non- compliance of the provision is or is not visited with some penalty, the consequences flowing therefrom and above all SSK 41 Custom Appeal 88-16 whether the object of the enactment is defeated by holding it to be directory and whether the object would be achieved by construing it to be mandatory. If the provisions are construed as mandatory, the act done in breach thereof necessarily will be invalid, but if the provision is held to be directory then even though there is no strict compliance with the provision, the act will be valid, though it may give rise to some consequences, if provided by the statute. It is no doubt true that the purpose of Regulation 20, which governs the Customs House agents is to inculcate discipline and a pattern in discharge of their duties and working. The regulation ensures to safe-guard the right conferred on the customs house agent by conferring the minimum protection by prescribing a period of licence and once such licence is granted unless and until there is a default on part of the customs house agent, its renewal is assured. However, the default on part of the Customs House Agent needs to be inquired into before depriving the Customs House Agent of his licence. At the same time the interest of revenue is also sought to be protected by the regulation which authorises the Commissioner of Customs to revoke the licence and forfeit the SSK 42 Custom Appeal 88-16 part of or whole of the security or even to impose a penalty in the circumstances identified by the regulation. In order to maintain the regime of discipline, the Commissioner is also authorised to initiate an action in form of suspension of licence with immediate effect contemplating or pending an inquiry. The imminence of the action, postponement of the opportunity of hearing that Regulation 19 provides for post decisional hearing when an action is taken to suspend the licence. Thus, the regulation aims at securing interest of the customs house agent and also the revenue. Thus, the urgency and expediency of the action permits the Authority to step in immediately or with promptitude. A balancing of interests is achieved by ensuring prompt action and avoiding undue delay in taking it to its logical conclusion.

The question therefore is whether non-adherence to the time frame as mentioned in regulation 20 would be so strictly construed so as to result in declaring initiation of action itself invalid, if that is not adhered to. There might be circumstances and situations which are not within the control either of the customs house agent or the Revenue. It is SSK 43 Custom Appeal 88-16 possible that a customs house agent is unable to attend the proceedings on account of his ill-health or any other unforeseen contingency, resultantly, the proceedings are required to be postponed by extending the date for submitting his written statement or submitting evidence, resultantly postponing the final time limit prescribed. In such a situation, can the provision be construed to be mandatory to the detriment of the customs house agent, since it was beyond his control to respond to the allegations made against him. Another contingency may occur, when the hearing in the proceedings is completed, but on account of administrative exigency, the Commissioner of Customs is transferred, can it be still said that the time line was so mandatory that when the order was not passed on 16th day, the entire action becomes invalid. It is also possible that the customs house agent avoids to adhere to the time limit and does not file his reply under Regulation 19 (2) and then takes advantage of the fact that the suspension was not revoked on the 16 th day, irrespective of the fact that the alleged action is detrimental to the interest of the revenue or the allegations levelled SSK 44 Custom Appeal 88-16 against him are of serious nature. In such circumstances, can it be permissible that the customs house agent is entitled to take benefit of his own wrong, on the ground that the process is not completed within the stipulated period. In such circumstances, if the provision is construed in such a rigid form and no flexibility is allowed, though it results into declaration of the entire action of the revenue as illegal, would it ensure justice or defeats it?