By TIOL News Service

NEW DELHI, MAY 17, 2017: THE Appellant was issued a Customs Broker Licence and which was valid upto 9th October 2021.

In the matter of alleged incorrect use of licences issued under the Vishesh Krishi and Gram Udyog Yojana, inter alia, the Appellant was also found to have cleared the import consignment of importers using these ab initio null and void licences.

Consequently, the Appellant's licence was placed under immediate suspension.

By an order dated 1st June 2016, the Commissioner of Customs (General) proceeded to revoke the licence without following the procedure outlined under the CBLR, 2013.

This order was challenged before the CESTAT and the Tribunal by its order dated 17.10.2016 held thus -

"3. After considering the totality of the Appellant's argument, we direct the Appellate authority to conclude investigation which is still pending, within a period of three months by providing an opportunity to the Appellant, as per law and thereafter, the Competent Authority will take final decision."

Pursuant thereto, a SCN dated 16th December 2016 was issued by the Commissioner of Customs (General) to the Petitioner in terms of Regulation 20 of the CBLR, 2013.

The CESTAT order is challenged by the licence holder.

The High Court framed the following question for consideration -

"Did the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in the facts and circumstances of this case fall into error in directing the Competent Authority to conclude the investigation and take a final decision in the inquiry, contrary to the Customs Broker Licensing Regulation, 2013 (CBLR), as interpreted by this Court in its various judgments?"

The High Court inter alia observed -

+ In Overseas Air Cargo Services = 2016-TIOL-1531-HC-DEL-CUS it is emphasised that if the mandatory time limits under the CBLR, 2013 for various stages is not adhered to, the actions taken thereunder including the revocation of licences would be vulnerable to being invalidated.

+ Court finds that in the present case those time limits have been given a complete go by.

+ Regulation 20(1) of the CBLR 2013 is categorical in that prior to revocation of the licence, a SCN in writing has to be issued to the Customs Broker. The SCN has to be issued within a period of 90 days from the date of receipt of the 'offence report'. The SCN in the present case was issued only on 16th December 2016, more than six months after the revocation of the Appellant's licence.

+ It requires to be straightway noticed that the CESTAT could not have and should not have extended the time for the Respondent to issue the SCN beyond what has been provided under Regulation 20 (1) of the CBLR 2013.

+ Secondly, the CESTAT failed to refer to the CBLR. Thirdly, there was no question of the CESTAT granting further time of three months to the Respondents "to conclude the investigation which is still pending". There was no power under the CBLR that enabled the CESTAT to grant such time . Further what was under challenge before it was the revocation order dated 1st June 2016. The CESTAT had to pronounce on its validity, but it failed to address that issue.

+ The Court, accordingly, finds that the entire action in proceeding to revoke the Appellant's licence was contrary to CBLR, 2013. There was an abject failure to comply with the mandatory time limits set out under Regulation 20 (1) of the CBLR, 2013 since there was no SCN issued in terms thereof to the Appellant prior to the revocation of its licence . Also, the SCN was not issued within 90 days of the receipt of the offence report.

+ Court also finds that the CESTAT acted without jurisdiction in extending the time for investigations to be completed by the Respondent without realizing that the revocation order was invalid as it was in clear violation of the CBLR, 2013.

In fine, the impugned order, the consequential SCN as well as the revocation order were set aside.

The appeal was allowed.

(See 2017-TIOL-939-HC-DEL-CUS)