Madras High Court
M/S.Pl Shipping & Logistics Ltd vs The Commissioner Of Customs on 17 June, 2021
W.P.Nos.29141 & 38198 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 17.06.2021
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.Nos.29141 & 38198 of 2016
and
W.M.P.Nos.25181, 32748 & 32749 of 2016
W.P.No.29141 of 2016
M/s.PL Shipping & Logistics Ltd.,
(formerly Pierce Leslie Agencies Ltd.,)
No.37, Dr.P.V.Cherian Crescent,
Egmore, Chennai – 600 008,
Represented by its Authorised
Signatory Shri S.Shekar ..Petitioner
vs
The Commissioner of Customs, Chennai
VII Commissionerate, Custom House,
No.60, Rajaji Salai, Chennai – 600 001. ..Respondent
Prayer: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari, calling for records of F.No.CHN/R-
701/CHA dated 08.08.2016, leading to an Order of Suspension of the
Operation of Customs Broker's Licence under the provisions of Regulation
19 of the Custom Broker Licensing Regulations 2013 and quash the same as
it is without jurisdiction, contrary to law and the mandate of the Customs
Broker's Licensing Regulations, 2013.
https://www.mhc.tn.gov.in/judis/
W.P.Nos.29141 & 38198 of 2016
W.P.No.38198 of 2016
M/s.PL Shipping & Logistics Ltd.,
(formerly Pierce Leslie Agencies Ltd.,)
No.37, Dr.P.V.Cherian Crescent,
Egmore, Chennai – 600 008,
Represented by its Authorised
Signatory Shri S.Shekar ..Petitioner
vs
1.The Commissioner of Customs, Chennai,
VIII Commissionerate, Custom House,
No.60, Rajaji Salai, Chennai – 600 001.
2.The Assistant Commissioner of Customs
(Inquiry Officer), Room No.313, 3rd
Floor, Narmada Block, Custom House,
No.60, Rajaji Salai, Chennai – 600 001.
3.The Assistant Commissioner of Customs
(CBS) Custom House, No.60, Rajaji
Salai, Chennai – 600 001. ..Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari, calling for the records of F.No.CHN/R-
701/CHA, leading to issuance of Show cause notice under Regulation 20 of
Customs Broker Licensing Regulations, 2013, dated 28.09.2016, as the
same is contrary to law and the provisions of the Custom Broker Licensing
Regulations (CBLR), 2013 and further, direct to the 1st respondent to renew
the validity of the Licence for a period of 10 years mandated under the
Customs Broker's Licensing Regulations, 2013, as the Order of Suspension
of the petitioners Customs Broker's Licence was stayed by this Hon'ble
Court vide Order in W.P.No.29141/2016 dated 29.08.2016.
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W.P.Nos.29141 & 38198 of 2016
For Petitioner : Mr.B.Sathish Sundar
[in both W.Ps]
For Respondents : Mr.A.P.Srinivas
Senior Panel counsel
[in both W.Ps]
COMMON ORDER
Both these writ petitions are filed by M/s.PL Shipping and Logistics
Limited. The first Writ Petition in W.P.No.29141 of 2016 is filed,
challenging the order of interim suspension of the operation of Customs
Broker's License issued in proceedings dated 08.08.2016. The second Writ
Petition in W.P.No.38198 of 2016 is filed, challenging the Show Cause
Notice issued in proceedings dated 28.09.2016.
2. Pursuant to the interim order granted against the order of interim
suspension, the petitioner is continuing his operations in the respective
Ports. Under these circumstances, both the writ petitions were taken
together for passing a common order.
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W.P.Nos.29141 & 38198 of 2016
3. The writ petitioner is a Public Limited Company, has been
favoured with Customs Broker's License issued by the respondent. The
petitioners operate as Customs Brokers at the Port of Chennai, Kochi,
Coimbatore, Tuticorin and Mangalore, by extension of their Customs
Brokers Licence under intimation in Form C of the Custom Broker
Licensing Regulations, 2013 [hereinafter referred to as 'Regulations']. The
facts regarding the operation of the petitioner in the Ports mentioned above
are not disputed by the respondents. Thus, those facts narrated deserves no
further consideration and the issue raised in these writ petitions are that the
issuance of order of interim suspension and the Show Cause Notice is well
within the provisions of the Customs Broker Licensing Regulations or not.
4. The learned counsel for the petitioner made a submission that the
initiation of action against the petitioner is beyond the time limit prescribed
under the Regulation and therefore, the interim suspension as well as the
Show Cause Notice issued after a lapse of 90 days is unsustainable and
liable to be set aside. To substantiate the same, the learned counsel for the
petitioner contended that the offence report was of the year 2015 and the
Show Cause Notice was issued on 16.09.2015 and therefore, the interim
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W.P.Nos.29141 & 38198 of 2016
order of suspension as well as the impugned Show Cause Notice issued in
the year 2016 after a lapse of the prescribed time limit cannot be sustained at
all.
5. The learned counsel for the petitioner relied on the judgment in the
case of A.M.Ahamed & Co., Vs. Commissioner, reported in 2014 (309)
E.L.T.433 (Mad). In the said judgment, it is held that adherence of time
limits contemplated under the regulations are mandatory and in the event of
not initiating action within the time limit prescribed, the actions are liable to
be set aside. It is contended that the said judgment was taken by way of an
appeal and the Hon'ble Division Bench has also confirmed the judgment and
therefore, the proposition became final in this regard.
6. The learned counsel for the petitioner relied on the other judgments
on the same line and more specifically, in the case of Sabin Logistics
Private Limited Vs. Commissioner of Customs, Chennai-VIII, reported in
2019 (367) E.L.T. 200 (Mad), wherein this Court held as follows:
“19. In the case of MKS Shipping Agencies (supra), a
Division Bench of this Court hearing a writ appeal filed by the
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Commissioner of Customs Duty, Tuticorin challenging an order
of the learned Single Judge concluding that the time lines set
out in Regulations 19 and 20 were mandatory and sacrosanct,
dismissed the appeal holding that there was no irregularity in
the conclusion of learned Single Judge. At paragraph no. 9 the
Division Bench states thus:
‘9. Insofar as the submission of the learned Counsel for
the appellant that since the impugned notice is a show cause
notice, it cannot be challenged by filing a Writ Petition and
remedy open to the respondent/Writ Petitioner is to submit his
response and in the event of any adverse order, he can file an
appeal before CESTAT Act, the said submission lacks merits
and substance for the reason that admittedly, the impugned
show cause notice has been issued beyond the period of ninety
days from the receipt of offence report and since the relevant
statutory regulation as well as Circular issued by them had
been violated with impunity, the respondent/Writ Petitioner
need not be driven to avail the alternative remedy. In this
context, it is useful to refer to the decision of the judgment
reported in (2004) 7 SCC 166, S.J.S. Busniess Enterprises (P)
Ltd. v. State of Bihar, wherein, it has been held as follows:—
“Assuming that the explanation given by the appellant
that the suit had been filed by one of the Directors of the
Company without the knowledge of the Director who almost
simultaneously approached the High Court under Article 226 is
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unbelievable, the question still remains whether the filing of the
suit can be said to be a fact material to the disposal of the writ
petition on merits. We think not. The existence of an adequate
or suitable alternative remedy available to a litigant is merely a
factor which a Court entertaining an application under Article
226 will consider for exercising the discretion to issue a writ
under Article 226. But the existence of such remedy does not
impinge upon the jurisdiction of the High Court to deal with the
matter itself if it is in a position to do so on the basis of the
affidavits filed. If however a party has already availed of the
alternative remedy while invoking the jurisdiction under Article
226 it would not be appropriate for the Court to entertain the
writ petition. The Rule is based on public policy but the
motivating factor is the existence of a parallel jurisdiction in
another Court. But this Court has also held in Chandra Bhan
Gosain Bhan v. State of Orissa that even when an alternative
remedy has been availed of by a party but not pursued that the
party could prosecute proceedings under Article 226 for the
same relief. This Court has also held that that when a party has
already moved the High Court under Article 226 and failed to
obtain relief and then moved an application under Article 32
before this Court for the same relief, normally the Court will
not entertain the application under Article 32. But where in the
parallel jurisdiction, the order is not a speaking one or the
matter has been disposed of on some other ground, this Court
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has, in a suitable case, entertained the application under
Article 32. Instead of dismissing the writ petition on the ground
that the alternative remedy had been availed of, the Court may
call upon the party to elect whether it will proceed with the
alternative remedy or with the application under Article 226
Therefore the fact that a suit had already been filed by the
appellant was not such a fact the suppression of which could
have affected the final disposal of the writ petition on merits.
9. The learned Judge, on facts of the case has
categorically found that despite an offence report dated
29.08.2012, the appellant fails to issue the notice within the
time prescribed under the Customs House Agents Licensing
Regulations 2004. It is also pertinent to point out at this
juncture that the interim order of suspension passed against the
respondent/Writ Petitioner by invoking Regulation 20(2) of the
Customs House Agents Licensing Regulations 2004 has nothing
to do with the Regulation 22(1) of the Customs House Agents
Licensing Regulations 2004 as both are independent to each
other and therefore, the pendency of the legal proceedings
pertain to the interim suspension cannot operate as any
impediment for the appellant to issue the notice within the time
prescribed under the Customs House Agents Licensing
Regulations 2004 and as such, the belated issuance of the show
cause notice, after the receipt of the offence report dated
29.08.2012, on the face of, is unsustainable. The learned Judge
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has rightly taken note of the said aspect and reached the
conclusion to allow the Writ Petition.’
20. Santon Shipping Services v. Commissioner of
Customs, Tuticorin in CMA No. 730/2016 and CMP. No.
5921/2016 dated 13.10.2017, a Division Bench of this High
Court held thus:
‘41. In view of the aforesaid judgments, in our opinion,
the issue as to whether the limitation prescribed i.e. 90 days
period under Regulation 22(1) of CHALR 2004, is mandatory
or not, is no more res integra.
42. Once the limitation prescribed is mandatory, as has
been declared by the Courts of law, it cannot be stated that,
because of the other issues that is the merit of the case, this
mandatory requirement of the limitation can be ignored.
43. It is not the case of the 1st respondent that the 90
days limitation contemplated under Regulation 22(1), is
directory. It is also not the case of the 1st respondent that the
show cause notice was issued within the limitation period of 90
days from the date of offence report.
44. Since the offence report was dated 22.09.2010 and
the show cause notice, admittedly, was issued only on
18.11.2011, there can be no doubt that the said show cause
notice was issued well beyond the period of limitation of 90
days.
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W.P.Nos.29141 & 38198 of 2016
45. Whatever be the claim and counter claim on the
merits, in this appeal can, in our view, they get shadowed by
the failure on the part of the revenue in not acting in time, by
issuing the show cause notice, within the period as
contemplated under Regulation 22 (1) of CHALR, 2004.
46. Therefore, we are of the considered view, and in fact
have no hesitation to hold so that, the Revenue has not issued
and the show cause notice dated 18.11.2011 within the period
of limitation prescribed under Regulation 22 (1) CHALR, 2004
and thus, the consequent proceedings involving revocation of
the appellant's CHALR licence and forfeiture of its security
deposit, is unlawful.’
7. The other cases cited in Kalki Shipping Associates -VIII vs.
Commissioner of Customs, Chennai, reported in 2019 (368) E.L.T. 319
(Mad) and KTR Logistics Solutions Private Limited Vs. Commissioner of
Customs, Chennai, reported in 2020 (371) E.L.T. 685 (Mad), the issues are
decided and the proposition laid down regarding the adherence of time limit
as per the regulations are confirmed by various Benches of this Court and by
the Hon'ble Division Bench and therefore, the present writ petition is to be
allowed on the ground that the impugned orders in both the writ petitions
were issued beyond the period of limitation as contemplated under the
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Regulations.
8. The learned Senior Panel counsel appearing on behalf of the
respondents have not disputed the time limit prescribed in the regulations
and the judgments holding that the time limits are to be followed strictly.
However, it is brought to the notice of this Court that the respondent /
Department has filed Review Petition on the issue that the regulations are
only directory and not mandatory. The learned Senior Panel counsel is of an
opinion that the Hon'ble Supreme Court, in number of cases, reiterated that
time limits prescribed in certain regulations are only directory and cannot be
held as mandatory and the proceedings need not be quashed merely on the
ground of delay in following such time limits. On this line, the Department
filed Review Petition and the same is pending. However, this Court is of an
opinion that those Review Petitions or otherwise have no bearing on the
present writ petitions as the facts are distinguished by the respondent in the
present cases.
9. The learned Senior Panel counsel made a submission that even
presuming that the time limits are to be adhered strictly, the present cases
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have not fallen beyond the period of limitation as contemplated and
therefore, the facts are relevant for the purpose of deciding these writ
petitions. The judgment cited by the petitioners are not applicable with
reference to the facts and circumstances of these writ petitions.
10. In order to substantiate the said contentions, the learned Senior
Panel counsel solicited the attention of this Court with reference to the
summons issued by the Superintendent of Customs, Customs House, New
Harbour Estate, Tuticorin, in proceedings dated 28.04.2015. The said
Summon was issued under Section 108 of the Customs Act, 1962. It is
contended that the petitioner is operating in various Ports, but the License
Issuing Authority is the Commissioner of Customs, Chennai. Therefore, the
Licensing Authority is competent to issue an order of interim suspension,
show cause notice and proceed with the enquiry by following the
regulations. In the present case, the initial summon was issued by the
Superintendent of Customs at Tuticorin and the said proceedings were not
communicated to the License Issuing Authority as it is not necessary to do
so. In view of the fact that the offence was committed in Tuticorin Port, the
competent authority of the Tuticorin Port initiated actions and issued
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summons. The authority at Tuticorin issued Show Cause Notice in
proceedings dated 16.09.2015, setting out allegations against the petitioner.
Reliance is placed on the documents for issuance of show cause notice. It is
categorically stated, why penalty should be imposed on the petitioners under
Section 114(i) read with Section 117 of the Customs Act, 1962.
11. Perusal of the said show cause notice reveals that the copy of the
same has not been communicated to the License Issuing Authority namely,
the Commissioner of Customs at Chennai. The show cause notice was
issued to the petitioners. Thereafter, the order in original was passed by the
competent authority at Tuticorin Port in proceedings dated 22.03.2016. The
said final order in proceedings were issued and the said order was
communicated to the Commissioner of Customs, Chennai, which was
received by the License Issuing Authority on 01.07.2016.
12. In this regard, the counter affidavit filed on behalf of the
respondents states that the offence report of the intimation letter
no.C.No.VIII/13/59/2007-ChAL dated 08.06.2016, enclosing copy of the
Order-in-Original no.45/2016 dated 22.03.2016 passed by the Joint
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Commissioner of Customs, Tuticorin, was forwarded to the Commissioner
of Customs, Chennai (License Issuing Authority) on 01.07.2016 to initiate
action against the said Customs Broker / petitioner.
13. Relying on the said intimation letter, the learned counsel for the
respondents reiterated that the first respondent / License Issuing Authority
received the offence report only on 01.07.2016 and therefore, the time limit
should be reckoned with effect from 01.07.2016.
14. In the present case, the offence was committed by the petitioners
in Tuticorin Port and the competent authorities in Tuticorin Port initiated
action by issuing show cause notice, conducted an enquiry and passed an
order in original dated 22.03.2016 and the said order in original, imposing
penalty was communicated to the License Issuing Authority through their
letter dated 08.06.2016 and the said letter was received by the License
Issuing Authority on 01.07.2016 and therefore, the time limit as
contemplated in the regulation is to be reckoned from 01.07.2016.
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15. The date of acknowledgement of the offence report is relevant
date to be considered for the purpose of initiation of action for revocation of
license by following the procedures contemplated under the Customs
Brokers Licensing Regulations. In the present case, the show cause notice
issued on 16.09.2015 and the order in original, imposing penalty issued on
22.03.2016, and therefore, the license issuing authority was nothing to do
with that proceedings. Only when the penalty imposed was communicated
to the License Issuing Authority at Chennai, they are empowered to institute
action under the provisions of the Customs Brokers Licensing Regulations.
16. In the present case, admittedly, the interim order of suspension
was issued on 08.08.2016 under Regulation 19. Immediately, the petitioner
approached the Hon'ble High Court by filing W.P.No.29141 of 2016 and an
interim order was granted and pursuant to the interim order, he is
continuing the operations. During the pendency of the said writ petition, the
competent authority issued show cause notice in proceedings dated
28.09.2016 and challenging the said show cause notice, subsequent writ
petition was filed in W.P.No.38198 of 2016.
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17. Carefully considering the relevant dates and the receipt of offence
report by the first respondent / License Issuing Authority, this Court is of an
opinion that the period of limitation for initiation of action under the
regulation is to be reckoned from 01.07.2016, the date on which the offence
report had been received by the License Issuing Authority / the
Commissioner of Customs, Chennai. This being the factum, the impugned
interim suspension order was issued on 08.08.2016 and the impugned show
cause notice was issued on 28.09.2016. These proceedings were instituted
within a period of 90 days. Thus, the orders cannot be said to be violative by
the time limit prescribed under the Regulations.
18. This Court is of the considered opinion that normally a writ
against a show cause notice is not entertainable. As far as the interim order
of suspension is concerned, the writ petitioner is continuing its operation for
about 4 ½ years and therefore, the interim order of suspension lost its
relevance. Thus, the interim order of suspension need not be restored and
the respondents are permitted to continue the proceedings based on the
show cause notice issued on 28.09.2016 and take a decision and pass final
orders.
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19. As far as the judgment cited by the petitioner in the case of
A.M.Ahamed & Co., Vs. Commissioner (cited supra) is concerned, it is
categorically clarified in Paragraphs 19 and 20 as follows:
“19. The Regulations not only fail to prescribe what an
offence report is and how it is to be sent, but they do not also
prescribe the person competent to send it. In such
circumstances, the interpretation sought to be given by the
petitioner is more acceptable.
20. The time limit prescribed in Regulation 22(1) has to
be understood in the context of the strict time schedule
prescribed in various portions of the Regulations. Regulation
20(2), for instance, entitles the Commissioner, to suspend the
licence of an agent, in appropriate cases where immediate
action is necessary. Regulation 22(3) prescribes a time limit of
15 days. Regulation 22(1) prescribes a time limit within which
action is to be initiated. It also prescribes the time limit under
Regulation 22(5). Therefore, considering the fact that the whole
proceedings are to be commenced within a time limit and also
concluded within a time frame, I am of the view that the show
cause notice issued to the petitioner on 08.05.2010 with a copy
marked to the first Respondent should be taken as the date of
receipt of the offence report. Consequently, the period of 90
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days should commence only from that date. If so calculated, the
impugned proceedings have obviously been initiated beyond the
period of 90 days.”
20. Perusal of the findings in the above judgment, it is unambiguous
that there is no definition for an offence report. Thus, in the present case, the
order of punishment by the competent authorities at Tuticorin Port, which
was communicated through intimation letter to the License Issuing
Authority is to be construed as an offence report for the purpose of initiation
of action under the Regulations. It is needless to state that unless an offence
report is served to the License Issuing Authority, it may not be possible for
initiation of further action. As rightly pointed out by the learned Senior
Panel counsel that the License Issuing Authority may not have knowledge
about each and every actions initiated by the competent authorities of
various Ports. The petitioner is having operations in number of Ports across
the country. Therefore, the communication of offence report by the
authorities of a particular Port to the License Issuing Authority is an
important factor for the purpose of deciding the limitation for initiation of
action under the Regulations. Thus, the principles laid down in the case of
A.M.Ahamed & Co., Vs. Commissioner (cited supra) is crystal clear that
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the receipt of offence report by the License Issuing Authority would be
relevant for the purpose of initiation of action against the Customs Brokers
License by invoking the provisions of the Regulation.
21. This Court is of the considered opinion that a writ against the
show cause notice in this case is filed mainly on the ground that it is issued
beyond the period of limitation and the respondents have no competency to
issue show cause notice. As the respondents could able to establish factually
that the offence report was communicated to the License Issuing Authority
on 01.07.2016, the action initiated by issuing interim suspension order and
show cause notice dated 28.09.2016 are well within the period of limitation
as contemplated under the Regulations and there is no infirmity as such.
However, the interim order of suspension issued need not be given effect to
as the petitioner is operating continuously for about 4 ½ years, after the
issuance of interim suspension order. But in respect of the impugned show
cause notice, the petitioner is at liberty to submit their explanations along
with the relevant documents and evidences and participate in the process of
enquiry. The respondents are directed to proceed with the enquiry by
affording opportunity to the writ petitioner as expeditiously as possible and
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dispose of the enquiry proceedings preferably within a period of six months
from the date of receipt of a copy of this order. The petitioner is at liberty to
raise all the grounds both factually and legally before the authorities
competent.
22. With these directions, both the writ petitions stand disposed of.
However, there shall be no order as to costs. Consequently, connected
miscellaneous petitions are closed.
17.06.2021
Kak
Internet:Yes/No
Index:Yes/No
Speaking / Non-Speaking order
To
1.The Commissioner of Customs, Chennai,
VIII Commissionerate, Custom House,
No.60, Rajaji Salai, Chennai – 600 001.
2.The Assistant Commissioner of Customs
(Inquiry Officer), Room No.313, 3rd
Floor, Narmada Block, Custom House,
No.60, Rajaji Salai, Chennai – 600 001.
3.The Assistant Commissioner of Customs
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W.P.Nos.29141 & 38198 of 2016
(CBS) Custom House, No.60, Rajaji
Salai, Chennai – 600 001.
S.M.SUBRAMANIAM, J.
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W.P.Nos.29141 & 38198 of 2016
Kak
W.P.Nos.29141 & 38198 of 2016
17.06.2021
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