By TIOL News Service

MUMBAI, NOV 08, 2016: THE Customs Broker licence was revoked by the Commissioner of Customs (General), Mumbai vide order dated 06.08.2015 and, therefore, the appellant filed an appeal before the CESTAT.

It was submitted that there are regulations prescribing time limits for conduct of various activities by Revenue for such actions and those time limits are prescribed by amendments made in the Custom House Agent Licensing Regulations, 2004 (CHALR) vide Notification No. 30/2010-Cus (NT) dated 8.4.2010; Circular No. 9/2010 dated 8.4.2010; Customs Broker Licensing Regulations, 2013 (CBLR)& since there has been inordinate delay (of 1221 days) in the processes, the impugned order of revocation is not sustainable.

The Bench adverted to the decision in Lohia Travels and Cargo - 2015-TIOL-2467-CESTAT-DEL and observed that the total time prescribed as per law for completing the process is 270 days and there is no procedure for extension of time prescribed under the said Regulations.

The CESTAT also mentioned about its order in Skylark Travel Pvt. Ltd.- 2016-TIOL-801-CESTAT-MUM calling for data from the Revenue to ascertain if delays are regular or exceptional but which was not forthcoming.

So, the Bench while posting the matter for the next hearing observed -

"There is an obvious resistance to providing the data. This creates a suspicion. It is obvious that some Customs Brokers suffer on account of such delays and some get benefit on account of such delays. Some custom broker, who have not committed any serious fraud and who ought not to be punished, get out of work for long periods during which the proceeding are delayed. On the other hand, the nefarious custom brokers, who ought to be punished, get the benefit of the lapses committed on account of delays. In either case, it is bad for the system. It is in this context, the CBEC has issued the circulars dated 8.4.2010. It is not unlikely that many of the delays are deliberate and intended to help the nefarious custom broker or harass the good ones. In this context, it is felt that this data is relevant. In exercise of powers under CESTAT Procedure Rules, 1982, we direct the Revenue to present the data regarding observation of various time limits prescribed under regulations. This data may be given in respect of cases taken up or pending in the Mumbai Customs since the amendment made by Notification No. 30/2010-Cus dated 8.4.2010 till 30.6.2016."

We reported this order as - 2016-TIOL-1891-CESTAT-MUM .

When the matter was heard recently, the appellant argued that the time limits prescribed under the CBLR, 2013 are mandatory in nature as held in the following cases -

+ Overseas Air Cargo Services - 2015-TIOL-2602-CESTAT-DEL

+ Saro International Freight System - 2015-TIOL-2916-HC-MAD-CUS

+ INDAIR Carrier Pvt. Ltd. - 2016-TIOL-1111-HC-DEL-CUS

And, therefore,in view of the inordinate delay in the proceedings against them, the order of revocation needs to be set aside.

The AR submitted a chart of the dates and events and submitted that the delay occurred due to non-cooperation of the appellant. Reliance was also placed on the decision in Unison Clearing - 2015 -TIOL-1253-CESTAT-MUM to assert that the time limits prescribed under CBLR, 2013 are not mandatory but directory in nature; also the decision in Burleigh International - 2016-TIOL-1123-HC-DEL-CUS.

The Bench observed that the time limits prescribed under the CBLR, 2013 have not been followed and there is an inordinate delay of exceptional nature. Inasmuch as the matter had been delayed by almost three years beyond time limit and almost 4 times the prescribed time limit.

While distinguishing the decisions cited by the AR and relying on the decisions cited by the appellant, the CESTAT added -

+ In this case Revenue has taken 1221 days to complete the actions for which a period of 270 days is prescribed in CBLR, 2013. There has been a delay of almost three years and more than four times the prescribed time has been taken. Revenue has sought to explain this due to the delay on the part of appellant. It is seen that the regulations clearly use the word “Shall” while prescribing the time limits. [Saro International Freight System - 2015-TIOL-2916-HC-MAD-CUS refers.]

+ By way of Miscellaneous Application, Revenue has submitted only partial data consisting of 15 occasions. It is seen that inquiries initiated in 2010/2011 are still pending in 2016. There is absolutely no respect for the CBEC circulars or the CBLR, 2013. This data appears to be just the tip of the iceberg as the revenue is seeking further time of 8 to 12 months just to compile the data of other such files regarding delay in processing. This indicates a very serious state of affairs. The interim order seeking data was issued on 15.7.2016 and the Miscellaneous Application has been filed on 23.9.2016. In a period of 67 days, they have provided data of 15 cases. There appears to be reluctance in providing the data for some reasons. We are sure in a period of 67 days they could have easily compiled data a lot more files than 15.

+ From the data it is seen that not even in one case, the time limit being followed. In fact the delays are significant in many cases and in many cases the inquiry has not been completed - even more than 5 years have been elapsed.

+ In the instant case the appellant has been out of work for long period of time. In most such cases the licences are suspended as soon as the inquiry starts and remain suspended till the enquiry is completed. The Custom Brokers are deprived of the fundamental right to work for long periods of time. The fundamental right to work is being denied to the appellant due to failure of the Revenue to follow the time limits prescribed in the law. In the 15 cases for which the data has been provided by the revenue, it is seen there are inordinate delays and the Brokers are rendered without work for long periods of time extending upto 5 years and still continuing as the enquiry has not been completed. In the process, on the one hand the Custom Broker who are unscrupulous get the advantage of these delays, in their defense, the good ones who are not guilty suffer for long periods of time. In both the cases the justice is not delivered.

+ It was obvious that there is lack of supervision and effort to adhere to the time limit prescribed by law. This will assume serious implications especially in view of the fact that Courts have held time limit to be mandatory in nature. This data of 15 cases is only tip of the iceberg. By the miscellaneous application filed, the Revenue seeks the time of 8 to 12 months just to compile the data of such delays. Suffice to say in such a serious issue needs immediate attention of CBE&C and Chief Commissioner of Customs. As a result of such delay, a number of serious offenders will get the benefit and be left off the hook and go scot free, which is not the intent of law. Similarly, due to the delays, people who are not guilty will continue to suffer the suspension and revocation on account of delays by Revenue due to lack of responsibility.

The appeal was allowed on limitation without going into merits of the case but not before directing the Registry to send a copy of the order to CBEC and Chief Commissioner of Customs for information and necessary action.

The licence was restored forthwith and the Commissioner of Customs (General), Mumbai was directed to do the needful immediately.

(See 2016-TIOL-2899-CESTAT-MUM)