The Division Bench of the Delhi High Court in the case of Commissioner of Customs (Airport & General) vs M/S R.P. Cargo Handling Services consisting of Justices Vibhu Bakhru and Amit Mahajan held that the question whether the Commissioner took the necessary steps to commence the proceedings under Regulation 20 of the Customs Brokers Licensing Regulations, 2013 (hereinafter referred to as “the CBLR”) which he had to do within the stipulated period of ninety days, was not contingent on the customs broker receiving the notice.
It was held that the word ‘issue’ used in Regulation 20(1) of the Customs Brokers Licensing Regulations, which talks about the “Procedure for revoking a license or imposing penalty”, cannot be interpreted to mean ‘serve’ or ‘receipt’.
Brief Facts:
The Appellant (Revenue) filed this appeal under Section 130 of the Customs Act, 1962 (hereinafter referred to as “the Act”) impugning an order passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi (“the Tribunal”). The Respondent had filed the aforementioned appeal before the learned Tribunal impugning the order passed by the Commissioner of Customs (Airport & General) (“the Commissioner”). In terms of the said order, the Commissioner had revoked the Respondent’s Customs Broker License (“the CB License”); directed forfeiture of the security deposit, and imposed a penalty of ₹50,000/- on the Respondent.
The question that fell for consideration was whether the learned Tribunal was correct in holding that a show cause notice under Regulation 20 of the CLBR was required to be received by the customs broker within a period of ninety days of the receipt of the offence report and it was not sufficient that the notice was sent within the said period of ninety days.
Contentions of the Respondent:
It was contended that the term ‘issue’ must be read to mean ‘serve’ and must be received by the customs broker within the stipulated period. The show cause notice was not received within ninety days of the Commissioner's receipt of the investigation report, hence the proceedings against the Respondent were not maintainable under Regulation 20(1) of the CBLR. Regulation 20(5) of the CBLR required the inquiry officer to report within 90 days from the date of the issue of notice.
Observations of the Court:
The Bench referred to Regulation 20(1) of the CBLR which talks about the “Procedure for revoking a license or imposing penalty” and opined that as per Regulation 20(1) of the CBLR, the Commissioner has ninety days from the date of receipt of the offence report to take the necessary action to trigger the procedure under Regulation 20, so “issue” must mean preparing and sending the notice, not receiving it. The Commissioner must start actions under Regulation 20 of CBLR within 90 days, regardless of whether the customs broker receives the notice.
It also observed that Rule 20(1) of the CBLR required notice to be issued within 90 days, which was done here. The Respondent's premises were closed; thus, the postal authority was unable to deliver the notice. Hence, the customs broker's receipt of the notice did not affect whether Regulation 20 of the CBLR was triggered on time.
It found no reason to interpret the word ‘issue’, as used in regulation 20(1) of CBLR, in any way other than its plain meaning. It was opined that ‘issue’ cannot be interpreted to mean ‘serve’ or ‘receipt’.
The decision of the Court:
The impugned order was overruled and the matter was remitted to the learned Tribunal to hear the Respondent’s appeal on merits. Accordingly, the appeal was allowed.
Case Title: Commissioner of Customs (Airport & General) vs M/S R.P. Cargo Handling Services
Coram: Hon’ble Justice Vibhu Bakhru, Hon’ble Justice Amit Mahajan
Case No: CUSAA 223/2019
Advocates for Appellant: Mr. Harpreet Singh, SSC with Mr. Jatin Kumar Gaur, Adv.
Advocates for Respondent: Ms. Priyadarshi Manish, Mrs. Anjali Jha Manish & Ms. Divya Rastogi.
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