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Mr. Bhaskar Prasad Banerjee, Advocate.

Hearing concluded on : August 24, 2016 Judgment on : August 30, 2016

1. The first petitioner is a customs broker, governed by the provisions of the Customs Broker Licensing Regulations, 2013 (hereafter the 2013 Regulations) framed in exercise of power conferred by sub-section (2) of section 146 of the Customs Act, 1962. The second petitioner is a director of the first petitioner.

2. This writ petition dated August 3, 2016 is directed against an order dated May 31, 2016, passed by the Principal Commissioner of Customs (A & A), Custom House, Kolkata, the first respondent, confirming suspension of license of the first petitioner in terms of regulation 19(2) of the 2013 Regulations and a show cause notice dated July 18, 2016 calling upon the first petitioner to explain as to why the license issued to it under regulation 9(1) of Customs House Agents Licensing Regulations, 2004 (hereafter the 2004 Regulations) shall not be revoked and security deposit forfeited under regulation 18 of the 2013 Regulations.

13.Initiation of proceedings under regulation 20 of the 2013 Regulations was also challenged by Mr. Saraf by contending that the same are without jurisdiction.

14.Regulation 20(1), it was submitted, authorizes the principal commissioner or the commissioner to 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 such deputy or assistant commissioner of customs, nominated by the principal commissioner or commissioner, as the case may be, a written statement of defence and also to specify therein as to whether the customs broker desires to be heard in person.

32. The power to suspend a customs broker's license under sub-regulation (1) of regulation 19 can be exercised by the principal commissioner or the commissioner of customs, as the case may be, in appropriate cases calling for immediate action where an inquiry against such broker is pending or contemplated. The first and foremost requirement for suspending a license is, therefore, an inquiry, which is either pending or is contemplated. Once such condition is satisfied, the further condition is that of an immediate action being necessary in appropriate cases. The word 'inquiry' has not been defined in the 2013 Regulations. Such word is also not defined in the Customs Act. In the absence of any definition of the word 'inquiry', one has to read the provisions of the 2013 Regulations in between lines to ascertain its appropriate meaning. Regulation 18 lists 6 (six) situations, which would essentially necessitate an inquiry to unravel whether a case exists or not for revocation of license as well as order for forfeiting part or whole of security or imposing a penalty not in excess of the specified amount on a customs broker. A reading of the order dated May 3, 2016 passed by the first respondent would reveal the following observations:

43. Looking to the object of the statute in question (the 2013 Regulations read with the Customs Act) and its broad purpose, and on weighing the consequence that would ensue if the time-limit in regulation 20(1) for issuance of show notice were held mandatory instead of holding it to be directory, it is well-nigh difficult to conclude that unless revocation proceedings are initiated within ninety days of receipt of an offence report, the principal commissioner or the commissioner of customs, as the case may be, would stand denuded of the power to proceed in that direction. This Bench is of the opinion that the time-limit that has been prescribed serves a dual purpose. First, it acts as a check on the public functionary vested with the power to initiate revocation proceedings not to keep the issue pending ad infinitum; if proceedings are not initiated within the stipulated time, that might expose such functionary empowered to initiate proceedings to disciplinary action. On the other hand, initiation of proceedings within ninety days or immediately thereafter is intended to guarantee protection to a customs broker of not being proceeded against on the basis of stale charges. But to hold that in every case where revocation proceedings are not initiated within the time-limit in regulation 20(1) a customs broker may get away, is too far-fetched a construction and is unacceptable. What is important is that regulation 20 does not provide for any consequence, should proceedings be not initiated within ninety days of receipt of an offence report. One may in this connection note section 110(2) of the Customs Act ordaining that where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. It is axiomatic that upon a failure to give notice as contemplated in section 124(a) within six months of seizure, the consequence would follow i.e. the seized goods have to be returned. If any authority is required on the point, reference may usefully be made to the decision reported in 100 C.W.N. 429 (India Sales International v. Collector of Customs). Similar such consequence being clearly absent in regulation 20(1), the time-limit has to be construed as directory and not mandatory.