Principal Commissioner of Customs Vs Sea Queen Shipping Services (Madras High Court)
Conclusion: Since there was absolutely no material that Revenue had failed in strictly adhering the limitation period under Regulation 20(7) of CBLR, 2013 and it was not the Revenue, who kept the file, without passing the final order under Regulation 20(7) within the 90 days limitation period and it had been kept pending only at the instance of the Respondent/Licensee, therefore, the matter was remitted back to CESTAT for fresh consideration only on the merits of the issue, not on the ground or point on limitation under Regulation 20 of CBLR, 2013.
Held: Respondent was a Customs Broker viz., M/s.Sea Queen Shipping Services Private Limited, whose Customs Broker Licence was revoked by Revenue. The item viz., “Chloro di fluoro methane”, was a restricted item as per the Export Import Policy of the Government. Therefore, prima facie, the Customs seemed to have found that, in the name of Toy Rattle, the importer wanted to smuggle the restricted goods viz., “Chloro di fluoro methane”, and in order to cover up their intended smuggling activity, they, according to the Customs, wanted to make the amendment in the Invoice/Bill of Entry, without even submitting the consignment for check up, as directed by the Customs Authorities. The licensee contended that the order was passed beyond the period of limitation and therefore, was not legally sustainable. Revenue contended that the order was passed beyond the limitation period only because of the attitude and approach of the Respondent and not by the inaction of the Revenue. CESTAT, on appeal, concluded that the order of the Revenue revoking the Customs Broker Licence of the Respondent/Customs Broker was beyond the Statutory Limitation Period, accordingly the said order was set aside and the appeal of the custom was allowed by the impugned order of the CESTAT. The issue before Court was whether the limitations prescribed in various Sub Regulations of Regulation 20 of Customs Brokers License Regulations, 2013 (CBLR were to be strictly followed in the mandatory sense or not. It was held that as the issue whether the CBLR, 2013 was a mandatory one or mere directory since had been given a quietus by a number of decisions, by respectfully following those decisions and concurring with the view taken by the various High Courts as well as the Coordinate Benches of this Court, once again reiterate and amplify that, the time limits in CBLR, 2013 was mandatory, therefore, it had to be strictly followed. In the present case, insofar as the first two limitation stages were concerned, Revenue had been very cautious and strictly followed the limitation period in issuing show cause notice as well as preparing and sending the Enquiry Report. Insofar as the third stage of limitation i.e. for passing final order of revocation of licence or imposing penalty order against the Customs Broker, though the Revenue had been very conscious about the limitation, it was triggered by the voluntary action and request made by the Respondent/ Customs Broker alone, who made the Revenue to keep the file in abeyance, therefore, in the present case, there was absolutely no material to come to a conclusion that, the Revenue had failed in strictly adhering the limitation period under Regulation 20(7) of CBLR, 2013. Therefore, it was not the Revenue, who kept the file, without passing the final order under Regulation 20(7) within the 90 days limitation period and it had been kept pending only at the instance of the Respondent/Licensee. These factors had never been unearthed nor been considered by the CESTAT before deciding the issue merely on the limitation point alone. As Tribunal since had passed the impugned order only on the basis of limitation and merits of the issue since had not been discussed, the matter was remitted back to CESTAT for fresh consideration, of course, only on the merits of the issue, not on the ground or point on limitation under Regulation 20 of CBLR, 2013.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The Respondent is a Customs Broker viz., M/s.Sea Queen Shipping Services Private Limited, whose Customs Broker Licence was revoked by the Appellant/Revenue by order dated 09.05.2008 in Order-in-Original No.63353/2018 passed by the Commissioner of Customs, Chennai – VIII. As the said order revoking the Customs Broker Licence of the Respondent had been assailed before the CESTAT, Chennai in Customs Appeal No.41944/2018, where, the Respondent/Customs Broker who was the Appellant before the CESTAT, primarily raised the issue of limitation, as has been proscribed under Regulation 20 of the Customs Brokers Licensing Regulations, 2013 (in short “CBLR, 2013”). The CESTAT also on the only point of limitation had concluded that, the order of the Revenue dated 09.05.2018 in Order-in-Original revoking the Customs Broker Licence of the Respondent/Customs Broker was beyond the Statutory Limitation Period, accordingly the said order was set aside and the customs appeal was allowed by the impugned order of the CESTAT in Final Order No.40627/2019 dated 27.03.2019. Felt aggrieved over the said order of the CESTAT, the Revenue preferred this Appeal by raising the following substantial questions of law:
“A. Whether in the facts and circumstances of the case, the Tribunal is right in restoring the Customs Broker License of the respondent herein?
B. Whether in the facts and circumstances of the case, the Tribunal is right and justified in allowing the appeal of the assessee by accepting the contention of the assessee that the Show Cause Notice was issued on 06.06.2017 and the inquiry officer report was submitted only on 29.11.2017 and the date of revocation of the license was on 09.05.2018 which again is more than 90 days beyond the Inquiry officer report, and overlooking the fact that the offence report dt.09.06.2017 was received by the appellant herein on 12.06.2017 and SCN was issued on 06.09.2017 which is within the stipulated period of 90 days and therefore there has been no breach of time lines by the appellant herein?”
2. The necessary facts in nutshell which are required to be noticed for the disposal of this Appeal are as follows:
2.1 That the Respondent herein is a Customs Broker Licensee at Chennai. While so, on 01.04.2016 the Customs Authorities detained the container through which consignment was imported by M/s.Payal Enterprises, an Importer, pursuant to which, the first check by the Group was ordered by the Customs Authorities on 06.04.2016. Instead of presenting the goods for the first check, the Respondent/Customs Broker seems to have sent a letter dated 04.2016 to the Customs Authorities with a request to amend the Bill of Entry No.4783575 dated 04.04.2016 by adding Invoice No.YF2-2016 dated 15.03.2016 by changing the description of the goods, quantity and value as per the second invoice.
2.2 In order to appreciate the aforesaid, the original Invoice i.e., the first Invoice dated 15.03.2016 and the second Invoice on the same date under which the Respondent/Customs Broker requested the Customs Authorities to make an amendment of the description of the goods, its total quantity, unit, unit price and total value of the goods in US Dollar, as has been given in the show cause notice of the Customs Authorities dated 06.06.2017 in a Tabular Column in paras 4.0 and 4.1, are extracted hereunder:
“4.0 The goods as per the first invoice YF1-2016 dated 15/03/2016 were found to be as follows [RUD #3].
