M/S. Surpass Freight Forwarders vs Commissioner Of Customs (Import), ...

(Arising out of Order-in-Original No. 34455/2015 dated 19.1.2015 passed by the Commissioner of Customs, Chennai - VIII)

M/s. Surpass Freight Forwarders Appellant

Vs.

Commissioner of Customs (Import), Chennai Respondent

Appearance

Shri A.K. Jayaraj, Advocate, for the Appellant Shri M. Rammohan Rao, JC (AR) for the Respondent

CORAM

Honble Shri D.N. Panda, Judicial Member

Reserved on : 15.07.2015 Pronouncement on : 26.08.2015

Final Order No. 41020 / 2015

The appellant is in appeal challenging the order dated 19.1.2015 passed by Commissioner of Customs revoking the licence issued to the appellant under Custom Broker Licensing Regulation, 2013 (hereinafter referred to as CBLR 2013) on the ground that the appellant had aided and abetted in commitment of breach of law using various IECs of others and there were undervaluation of the goods imported. That authority while passing the impugned order with above consequence found that the inquiring authority held the appellant not guilty and dropped the allegation. But, he found that the appellant was an abettor for using of the IEC of others in contravention of law and acted under improper authorization without knowing who was the real IEC holder. According to the Adjudicating Authority the appellant failed to exercise his due diligence to perform his duties. He also acted in violation of conditions of the licensing regulation and caused prejudice to customs.

2. Arguing the appeal, learned counsel submitted a date chart indicating the date of cause of action and different phases of the proceeding. He challenged the order of revocation of the licence issued under Regulation 13 on the ground that when the offence report was issued by the DRI in terms of the letter F. No. DRI/MZU/NS/INV-05/ 13-14 dated 7.10.2013, the authority could have proceeded against the appellant under Regulation 20 of the above Regulations within 90 days from the date of offence report. He further submitted that the Honble High Court of Madras in para 36 of the judgment dated 2.7.2015 in the case of Commissioner of Customs Vs. A.M. Ahmed & Co. in W.A. No. 371 of 2015 and M.P. No. 1 of 2015 held that the date of the show-cause notice issued by DRI shall be the date of the receipt of the offence report and within 90 days thereof, notice under Regulation 20 could have been issued. Accordingly, in the present case, the DRI having issued the offence report on 7.10.2013, the notice under Regulation 20 of the Regulations could have been issued at the latest by 6.1.2014. But, that was not done. The Commissioner of Customs, Chennai suspended the licence of the appellant on 17.4.2014 which was after six months of the offence report. Such action of the authority shows that there was no exigency to suspend the licence of the appellant when the authority violated law under Regulation 20 without taking action thereunder within 90 days of the offence report. Therefore, the impugned order dated 19.1.2015 has no legs to stand following the judgment of the Honble High Court of Madras in the case of Commissioner of Customs Vs. A.M. Ahmed & Co. (supra).

3. Revenue on the other hand submits that when the appellant was involved in the fraud committed against customs, revocation of the licence made by the learned Commissioner was correct and appeal be dismissed.

4. Heard both sides and perused the records.

5. Be that as it may as to the involvement of the appellant and commitment of the offence, the limitation prescribed by law cannot be given goby. When customs failed to adhere to the limitation, it lost its remedy under Regulation 20 of CBLR 2013, following the decision of the Honble Madras High Court in the aforesaid judgment.

6. Record reveals that against the allegation of the commitment of the offence by appellant, it was issued notice dated 31.10.2013 under Customs Act, 1962. There is no result of that proceeding on record nor either side informed.

7. No doubt, consequent upon the allegation made by DRI as to the commitment of the offence made by appellant, prohibitory order was issued on 29.10.2013 by the Commissioner of Customs, Mumbai. The appellant replied against that prohibitory order on 8.11.2013 to the Commissioner of Customs (General), Mumbai. Even the appellant also filed reply to the offence report dated 7.10.2013 on 22.11.2013 before the Commissioner of Customs, Chennai. Despite entire materials were there on record, before the Commissioner of Customs, Chennai, he failed to proceed against the appellant in terms of Regulation 20 within the stipulated time. When that Regulation is mandatory and requires the public authority to act publicly to pass public order and he fails to do so within the time prescribed, recourse to that provision is no more available to him on the expiry of the period so stipulated. Therefore, when the mandatory requirement of the Regulation was paid scanty regard, the appellant is correct to plead that he is entitled to the benefit of the principles relating to limitation laid down by the judgment of the Honble Madras High Court in the aforesaid judgment.

8. It is surprising that when the offence report came to record on 7.10.2013, revocation of licence was made on 19.1.2015 and that too without a notice issued within the period stipulated by Regulation 20 of CBLR 2013. In the meantime, 16 months have elapsed. No doubt the action under the Custom Broker Licensing Regulation, 2013 is without prejudice to the consequence under Customs Act, 1962. But violation of principles of natural justice by a belated action of the authority made its order fatal. Therefore, appeal is allowed following the decision of the Honble Madras High Court in the aforesaid judgment and the impugned order is set aside.

(Pronounced in open court on 26.8.2015)

(D.N. Panda) Judicial Member Rex

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