Calcutta High Court
The Commissioner Of Customs (Airport & ... vs M/S Shipping & Clearing Agents Pvt. Ltd on 13 June, 2024
Author: Debangsu Basak
Bench: Debangsu Basak
1
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction
Customs Appeal
Original Side
Present:
The Hon'ble Justice Debangsu Basak
CUSTA 26 OF 2018
THE COMMISSIONER OF CUSTOMS (AIRPORT & ADMN.)
VS.
M/S SHIPPING & CLEARING AGENTS PVT. LTD.
For the Appellant : Mr. K. K Maiti, Adv.
Mr. Tapan Bhanja, Adv.
For the Respondent : Mr. Arijit Chakraborty, Adv.
Mr. Suman Banerjee, Adv.
Hearing concluded on : May 02, 2024
Judgment on : June 13, 2024
DEBANGSU BASAK, J. :-
1. This reference is in respect of the judgement and order
dated June 8, 2023 that has been passed by the Division
Bench in CUSTA 26 of 2018.
2. While dealing with an appeal under Section 130 of the
Customs Act, 1962 the Division Bench had differed on the
point of upholding the decision of Customs, Excise and
Service Tax Appellate Tribunal regarding non-acceptance of
the Enquiry Report.
3. Without meaning any disrespect to the Hon'ble Judges
Signed By :
SUBHA of the Division Bench, and for the sake of convenience the
KARMAKAR
High Court of
Calcutta
13 th of June
2024 02:51:15 PM
Hon'ble Judge delivering the first view in the judgement and
order dated June 8, 2023 is referred to as the Hon'ble First
Judge while the Hon'ble Judge delivering the second view is
referred to as the Hon'ble Second Judge.
4. The respondent herein as Customs Broker had filed a
bill of export on January 2, 2014 for clearance with the
customs authorities. The customs authorities had found
that the respondent herein, as Customs Broker, to be in
connivance with the exporter by aiding and abetting illegal
exportation of contraceptives. The bill of export that had
been submitted by the respondent as the Customs Broker
was in relation to export of specified contraceptives banned
by the Government of India for export as such
contraceptives were meant for sale within India at a
subsidised rate with the subsidy being provided by the
Government of India.
5. With regard to such bill of export an offence report in
the form of an Order in Original dated May 15, 2015 had
been received by the appellant from the Commissioner of
Customs (Preventive), Kolkata. By an order dated June 19,
2015 the customs authorities had suspended the operation
of the Customs House Agent (CHA) License of the
respondent, with immediate effect under Regulation 19 of
Customs Brokers Licensing Regulations, 2013. A post
decisional hearing had been granted to the respondent
under Regulation 19 (2) of the Regulations of 2013 on June
22, 2015. Suspension of the respondent had been confirmed
on June 24, 2015. A Show Cause Notice under Regulation
20 (1) of the Regulations of 2013 had been issued to the
respondent on July 31, 2015. The respondent had filed a
writ petition being WP No. 1076 of 2015 challenging the
Order in Original dated May 15, 2015 as well as the Show
Cause Notice dated July 31, 2015.
6. Customs authorities had completed the enquiry under
Regulation 20 (5) of the Regulations of 2013 on December
17, 2015 and the enquiry report was supplied to the
respondent by a letter dated December 21, 2015.
7. By an order dated January 6, 2016, WP No. 1076 of
2015 had been disposed of by directing the respondent to
approach the Tribunal. The respondent had preferred
another writ petition being WP No. 364 of 2016 challenging
the order of suspension which was disposed of by an order
dated April 29, 2016 by granting opportunity to the
respondent to file a reply to the Show Cause Notice dated
July 31, 2015 within a week and to conclude the revocation
proceedings within 3 months of the receipt of the reply to
the show cause notice from the respondent.
8. The respondent had filed its reply to the show cause
notice on May 10, 2016. Personal hearing for adjudication of
the show cause notice had been granted to the respondent
on July for 2016 when nobody had appeared on behalf of
the respondent. By an order dated August 16, 2016 the
Principal Commissioner of Customs had revoked the license
and forfeited the security amount furnished by the
respondent, under Regulation 20 (7) of the Regulations of
2013.
9. The respondent had challenged the order dated August
16, 2016 of the Principal Commissioner of Customs before
the Tribunal when the Tribunal by the order dated
November 30, 2017 was pleased to set aside the order of
revocation but upheld the order of confiscation of the
security amount.
10. Being aggrieved by the order dated November 30, 2017
of the Tribunal, the customs authorities had filed an appeal
under Section 130 of the Customs Act, 1962 resulting in the
judgement and order dated June 8, 2023.
11. The Division Bench has held that, the requirement to
file the enquiry report within 90 days was not mandatory at
all. The Division Bench has however differed on the action of
the Tribunal in treatment of the enquiry report. While the
Hon'ble First Judge has opined that, the Tribunal correctly
exercised discretion in deciding not to attach any weight to
the enquiry report and reject it, the Hon'ble Second Judge
has opined that the enquiry report should not be discarded
on the ground that the enquiry was not completed within
the period prescribed under the Regulations when such
period was directory. The Hon'ble Second Judge has opined
that it was reasonable for the Tribunal to accept and
consider the enquiry report and decide the matter on merits.
The Hon'ble Second Judge has thereafter proceeded to re-
appreciate the facts and arrive at the same conclusion as
that of the Hon'ble First Judge in upholding the impugned
order under appeal.
12. Learned advocate appearing for the appellant has
referred to a list of dates of the events happening in the
matter leading up to the impugned order of the learned
Tribunal. He has contended that, the Division Bench was
unanimous with regard to the provisions of the Regulations
of 2013 being directory in nature. He has contended that,
the reference should be disposed of by holding that the time
period specified in completing the enquiry and submitting
the enquiry report are directory in nature.
13. Learned advocate appearing for the respondent has
submitted that, there is a difference of opinion amongst the
High Courts with regard to the issue as to whether, the time
period for completing the enquiry and submitting the
enquiry report was mandatory or directory. He has drawn
the attention of the Court to 2017 SEC online Mad 7084
(Santon Shipping Services vs. Commissioner of
Customs), 2018 (360) ELT 879 (Del) (Necko Freight
Forwarders Ltd. vs. Commissioner of Cus. (General)),
2018 (361) ELT 731 (Del) (Harjeet Singh Johar vs.
Commissioner of Customs (General)), 2019 (367) ELT
200 (Mad) (Sabin Logistics Pvt. Ltd. vs. Commissioner of
Customs, Chennai-VIII), 2019 (368) ELT 319 (Mad) (Kalki
Shippiing Associates vs. Commissioner of Customs,
Chennai-VIII), 2019 (368) ELT 1059 (Mad) (Carewell
Shipping Pvt Ltd. vs. Commissioner of Customs,
Chennai), 2020 (371) ELT (Mad.) (KTR Logistics
Solutions Pvt. Ltd. vs. Commissioner of Customs,
Chennai), 2021 (378) ELT 144 (Mad) (PL Shipping and
Logistics Ltd. vs. Commissioner of Customs, Chennai-
VII), 2021 (377) ELT 562 (Mad) (Aristo Shipping Services
vs. Principal Commissioner of Customs, Chennai-VIII),
2022 (382)ELT 30 (Del) (Leo Cargo Services vs.
Commissioner of Customs, Airport and General, New
Delhi) and 2023 (384) ELT 558 (Del.) Him Logistics
Private Limited versus Commissioner of Customs,
(Airport and General)) and submitted that, the Madras and
Delhi High Courts have held that, the timelines provided in
the Regulations of 2013 are mandatory. He has also drawn
the attention of the Court to 2018 (362) ELT 947 (Cal) (Ota
Falloons Forwarders Private Limited vs. Union of India),
2020 (373) ELT 323 (Cal) (Asian Freight vs. Principal
Commissioner of Customs (Airport and Administration)),
2018 (361) ELT 321 (Bom) (Principal Commissioner of
Customs (General), Mumbai vs. Unison Clearing Private
Limited), 2019 (368) ELT 41 (Telengana) (Shasta Freight
Services Private Limited vs. Principal Commissioner of
Customs, Hyderabad), and 2022 (380) ELT 60 (Bom)
(Commissioner of Customs (Gen), Mumbai vs. Srinivas
Clearing and Shipping (I) Private Limited) and contended
that, Bombay, Telangana and our High Court have held
that, the timeline for completion of proceedings under the
Regulations of 2013 were directory in nature.
14. The issue that has fallen for consideration in this
reference is whether, the Tribunal could have discarded the
enquiry report in its entirety as being submitted in breach of
the timeline prescribed in Regulation 20 (5) of the
Regulations of 2013 or should have considered the same on
merits and on such consideration have the discretion to
attach such weightage to it as deemed appropriate.
15. Both the Hon'ble Judges of the Division Bench have
held that, timeline under Regulation 20 (5) of the Customs
Broker Licensing Regulations, 2013 were directory. In
arriving at such a decision, the Division Bench has noted
Asian Freight (supra).
16. So far as this High Court is concerned, in view of the
Division Bench having unanimously held that, the timeline
under Regulation 20 (5) of the Regulations of 2013 was
directory in nature, the same is binding not only on this
Court but also on all Tribunals and authorities functioning
under this High Court. In the event it is contended that, by
the impugned order in the appeal Tribunal has discarded
the enquiry report in view of the breach of the timeline
prescribed under Regulation 20 (5), then the impugned
order of the Tribunal cannot be sustained in such context.
However, in the facts and circumstances of the present
case, the Tribunal has accepted a portion of the impugned
order so far as forfeiture of the security deposit of the
respondent is concerned. Therefore, in the facts and
circumstances of the present case, it cannot be said that,
the Tribunal has rejected the enquiry report or the order
impugned before it in its entirety purely on the ground of
the timeline prescribed under Regulation 20 (5) of the
Regulations of 2013 being breached.
17. No doubt, the Adjudicating Authority, which would
obviously include the Tribunal has the discretion to attach
such weightage as is permissible in law to the enquiry
report, albeit submitted in breach of the timeline prescribed
under Regulation 20 (5) of the Regulations of 2013, in
deciding on the quantum of punishment or the relief, to be
imposed or granted, as the case may be. In the facts of the
present case, the Hon'ble First Judge has held that, the
Tribunal was correct in attaching such weightage to the
enquiry report as deemed appropriate. The Hon'ble First
Judge has noted that, a portion of the order impugned
before the Tribunal was accepted by the Tribunal.
18. The order impugned before the Tribunal has been
premised upon the enquiry report. The order impugned
before the Tribunal has prescribed both cancellation of the
license as well as forfeiture of the security deposit of the
broker. The Tribunal has accepted a portion of the order
impugned before it, that is to say that, it has upheld the
forfeiture of the security deposit of the broker while setting
aside the order of cancellation of the license. In doing so, it
has to be held that, the Tribunal accepted the enquiry
report partially in imposing such a penalty on the
respondent. If the Tribunal had discarded, the enquiry
report in its entirety, which it could not have done, in view
of the pronouncement of this Court in Asian Freight
(supra) and Ota Falloons Forwarders Private Limited
(supra) which were binding upon it, at that material point of
time, then, the order under appeal before the Division
Bench could not have been sustained. Again, the Division
Bench has noted that, the Tribunal has accepted a portion
of the enquiry report and therefore, the Division Bench has
proceeded to uphold the order of the Tribunal impugned
before it.
19. The Adjudicating Authority while dealing with the
proceeding under Regulation 20 of the Regulations of 2013,
is called upon to take into consideration the materials
proved before it. Absence of the broker before it or refusal of
the broker to participate in the adjudication proceedings
does not vest the broker with any additional benefits of a
requirement on the Adjudicating Authority to apprise the
reply of the broker in the manner suggested by the Hon'ble
Second Judge. All that the Adjudicating Authority is
required to do is to evaluate all evidence placed before it to
arrive at its findings. In the facts and circumstances of the
present case, neither the enquiry report nor the order of
adjudication impugned before the Tribunal can be faulted
for not having taken into consideration relevant materials.
20. In such circumstances, the present reference is
answered by holding that, the timeline prescribed under
Regulation 20 (5) of the Regulations of 2013 are directory.
The Tribunal is vested with the discretion to attach such
weightage to the enquiry report as deemed appropriate, after
consideration of the same on merits.
21. Department will treat CUSTA 26 of 2018 as disposed
of.
[DEBANGSU BASAK, J.]
