Calcutta High Court (Appellete Side)
Cargo Marketing International vs Principal Commissioner Of ... on 29 September, 2022
29.9.2022
KS WPA 20050 of 2022
sl. 04
Cargo Marketing International
Vs
Principal Commissioner of Customs
(Airport & Administration) & Ors.
Mr. Mainak Bose,
Mr. Neeraj Kumar Pandey,
Mr. S.M. Akhter,
... For the Petitioner.
Mr. Bhaskar Prosad Banerjee,
Mr. Abhradip Maity,
Ms. Satabdi Sen,
... For the Respondent.
Heard learned Advocates appearing for the parties.
By this Writ Petition, the petitioner has challenged the
impugned order of revocation dated 11th July, 2022
passed by the Respondent No. 1 revoking the
petitioner's Customs Broker License in exercise of
powers under Regulation 17 (7) of the Customs
Brokers Licensing Regulations, 2018 (CBLR, 2018),
allegedly for violation of Regulation 10 (m), (n) and (q)
of CBLR, 2018.
Facts
in brief relevant to this case are hereunder.
The petitioner, as a customs broker, had handled
cargo on behalf of one Das International Exim Private
Limited (Exporter) in July/August, 2020. Based on an
allegation that the exporter does not exist, an interim
suspension order was passed based on the alleged
offence report. A reference was made to a GST Enquiry
Report where the Exporter was not found to be in
existence at the declared place of business. A final
suspension order was passed on 10th November, 2021
which was challenged by the petitioner before this
Court as the Tribunal was not functioning at the
relevant time. Pursuant to an order passed by this
Court dated 28th March, 2022, the petitioner's stay
petition filed in appeal before the Tribunal against the
final order of suspension was considered and stayed
and the main appeal is still pending.
A show cause notice was issued on 11th November,
2021 under Regulation 17 (1) of the CBLR, 2018 for
revocation of the petitioner's license. The petitioner
gave a detailed reply on 9th December, 2021. An
enquiry was ordered and the appointed Inquiry Officer
submitted an inquiry report under Regulation 17 (5) of
CBLR, 2018 on 4th February, 2022. After detailed
analysis the Inquiry Officer found the allegations of
violation of Regulation 10 (m), (n) and (q) of CBLR,
2018 against the petitioner as "Not proved".
The time to pass the order under Regulation 17 (7) of
CBLR, 2018 expired on 4th May, 2022, i.e., 90 days
from the date of submission of inquiry report. The
impugned order revoking the petitioner's license was
passed on 11th July, 2022 i.e., beyond the period of 90
days prescribed under the aforesaid Regulation 17 (7)
of CBLR, 2018.
Petitioner submits that jurisdiction which has been
exercised by the Respondent No. 1 under Regulation
17 (7) of CBLR, 2018 wherein the timeline provided
under the CBLR, 2018 and in particular, Regulation
17 for revocation of license has been held to be
mandatory.
Petitioner submits that the impugned order of
revocation of petitioner's license having been passed
beyond the period of 90 days as mandated under
Regulation 17 (7) of CBLR, 2018 deserves to be set
aside on that ground alone.
Petitioner submits that the issue of timeline being
mandatory, was raised by the petitioner and
considered by the adjudicating authority and at para
22, page 246 of the Writ Petition being impugned order
dated 11th July, 2022 the adjudicating authority
referred to a judgment of the Hon'ble Bombay High
Court in the case of Principal Commissioner of
Customs (General), Mumbai Vs Unison Clearing
Private Limited where it was held that the timeline
under CBLR, 2018 is directory and relying on the said
judgment, he proceeded and passed the impugned
order and as such, it is evident that the Respondent
No. 1 was conscious of the fact that the time
prescribed under Regulation 17 (7) had expired and
the order was being passed beyond the prescribed time
by relying on the aforesaid judgment of the Bombay
High Court.
Petitioner submits that the judgment of the Hon'ble
Bombay High Court was subsequently considered by a
Division Bench of the Hon'ble Delhi High Court in an
unreported judgment dated 28.07.2022 in the case of
Leo Cargo Services Vs Commissioner of Customs, New
Delhi, referring to several previous precedents of
Hon'ble Delhi High Court and Hon'ble Madras High
Court and after considering the aforesaid judgment of
the Hon'ble Bombay High Court, the Division Bench of
the Hon'ble Delhi High Court came to a specific
conclusion that the timelines prescribed under
Regulation 17 are mandatory. At paragraph 13.5,
referring to the Hon'ble Bombay High Court judgment,
it was held that in case adherence to the timeline
cannot be ensured, the principles of fairness would
require that the delay must be justified by reasons as
to why the timeline was not adhered to. The Division
Bench of the Hon'ble Delhi High Court differed with
the findings of the Bombay High Court for the reasons
provided at paragraph 14.2 of its judgment.
Petitioner submits that even if the view of the Hon'ble
Bombay High Court is considered, it is evident that in
case of delay and non-compliance of timeline, the
authority is required to justify and give reasons as to
why the timeline could not be adhered to.
Petitioner submits that in the facts of the present case
the Adjudicating Authority has misconstrued the
judgment of the Hon'ble Bombay High Court and has
merely come to a conclusion that timelines under the
aforesaid Regulation are directory and proceeded to
pass the order beyond the period of time of limitation
of 90 days, rendering the timelines nugatory and
otiose. In any event since the impugned order neither
records any reason nor is there any justification for
delay in passing the impugned order revoking the
license of the petitioner beyond the period of 90 days
from the date of submission of the Inquiry Report, the
impugned order deserves to be set aside and/or
quashed on that ground alone. That apart, the order
impugned is also, otherwise, not sustainable as none
of the grounds provided under Regulation 10 (m), (n)
and (q) of the CBLR, 2018, has any application in the
present case as the same is evident from the Inquiry
Report which has specifically held, upon detailed
enquiry, that none of the allegations stands proved
against the petitioner.
Petitioner submits that the Exporter in question is still
very much in existence which would be evident from
statutory records available with Government portals;
GSTIN Status - Page 96, IEC Status - Page 101 and
MCA Master Data details as would appear from Page
105 of the Writ Petition.
Petitioner submits that adjudicating authority has
usurped the jurisdiction of the authority under the
customs and Central Excise Duty Drawback Rules,
2017 relating to Duty Drawback on export
transactions. Such findings have been noted in the
disagreement note and subsequently in the impugned
order relating to Bank Realization Certificate (BRC), a
certificate issued by a Bank to an exporter certifying
realization of export proceeds.
In view of the aforesaid factual and legal position, the
impugned order deserves to be set aside and/or
quashed.
Learned counsel appearing for the respondents
opposing this Writ Petition justifies the impugned
order dated 11th July, 2022 revoking the license of the
petitioner and defends the same on the issue of
impugned order of revocation of petitioner's license
relating to period of limitation under Regulation 17 (7)
of the CBLR, 2018 by contending that the limitation
prescribed under the said regulation which is 90 days
from the date of receipt of inquiry report is directory
and not mandatory. He further defends the impugned
order on the issue of delay in passing the impugned
order beyond the expiry of 90 days as per regulation
17 (7) of the CBLR, 2018 by contending that delay in
passing the impugned order was contributory on the
part of the petitioner who sought adjudication twice
during the course of impugned proceedings for
revocation of petitioner's license.
Learned counsel appearing for the respondents in
support of this proposition of law that the timeline
prescribed under Regulation 17 (7) of the CBLR, 2018
is directory and not mandatory, relies on a judgment
of this Court dated 30th August, 2016, in the case of
Asian Freight Vs Principal Commissioner of Customs
reported in 2020 (373) ELT 323 (Cal) which according
to me is not applicable to the facts and circumstances
of the present case since in the said case the show
cause notice was challenged which was issued beyond
the period of 90 days under Regulation 20 (1) of the
CBLR, 2018 and without giving reply to the same and
time to complete the proceedings were still few months
away as appears from concluded paragraph 58 of the
aforesaid judgment petitioner had filed the Writ
Petition challenging the said show cause notice while
in the instant case petitioner has not come up at the
stage of show cause notice and that the time was still
available to complete the impugned proceeding rather
petitioner has come up before this Court at the stage
when the final adjudication order has already been
passed beyond the statutory period of limitation of 90
days without any explanation for violation of such
period of limitation prescribed under the aforesaid
Regulation 17 (7).
One more important fact liable for consideration in
this case is that in this case order of suspension of the
license was challenged before the Tribunal which
stayed the order of permanent suspension of the
petitioner's license which is still existing.
Furthermore, the Inquiry Officer in his Inquiry Report
under Regulation 17 (5) of the said regulation has
specifically found that the allegations of violation of
Regulation 10 (m), (n) and (q) under CBLR, 2018
against the petitioner as "not proved". It also appears
from record that the order of suspension of petitioner's
license though it was stayed by the order of the
Tribunal on 23rd August, 2022 but before such order
of stay and during the pendency of the stay application
before the Tribunal the respondent authority passed
the impugned order of revocation of petitioner's
license.
Considering the facts and circumstances of the case, I
am of the view that the issues involved in this Writ
Petition is a pure question of law with regard to
interpretation of Regulation 17 (7) of the CBLR, 2018
and as to whether time prescribed under the said
Regulation for completion of the proceedings and
passing of the final order within 90 days from the date
of receipt of inquiry report is directory or mandatory
and this Writ Petition on this legal issue should be
heard on affidavits by the respondents.
Considering the facts and circumstances of the case I
am also of the view that the petitioner has been able to
make out a prima facie case for an interim order for
the following reasons:
1. The Inquiry Officer himself has given his finding
that the allegation of violation of Regulation 10
(m), (n) and (q) of CBLR, 2018 against the
petitioner as "not proved".
2. Division Bench of the Hon'ble Delhi High Court
after considering the judgment of the Bombay
High Court upon which adjudicating authority
has relied on the timeline as prescribed under
Regulation 17 (7) of the aforesaid regulation has
held the same as mandatory.
3. The Tribunal has already stayed the permanent
suspension of the petitioner's license by its order
dated 23rd August, 2022 which has not been
stayed or interfered by any higher forum till date
and the said stay order by the Tribunal is still
existing.
Considering the facts and circumstances of the
case as appears from record and submission of the
parties and discussion made above the impugned
order of revocation of petitioner's license dated 11th
July, 2022 shall remain stayed till 31st January,
2023 or until further order, whichever is earlier.
Respondents shall file affidavit-in-opposition to the
Writ Petition within four weeks after Puja Vacation.
Petitioner to file reply thereto, if any, within two
weeks thereafter.
List this matter for 'Final Hearing' in the monthly
list of January, 2023
( Md. Nizamuddin, J. )
