The Kerala High Court has held that the 90 Days period prescribed under Regulation 17(1) of Customs Brokers Licensing Regulations 2018 is not mandatory.
The bench of Justice A.K.Jayasankaran Nambiar and Justice Easwaran S. has observed that as per sub-Regulation (1) to Regulation 17 of the Customs Brokers Licensing Regulations, 2018, the Commissioner of Customs to have issued notice in writing to the Customs broker within a period of ninety days from the date of receipt of the offence report stating the grounds on which it is proposed to revoke the licence is directory and not mandatory.
The appellant, is a Customs Broker and a holder of regular licence issued under Regulation 9(1) of the Custom House Agent Licensing Regulations, 2004 has come up with the present appeal challenging the order passed by the Customs, Excise & Service Tax Appellate Tribunal, by which the order revoking the license is set aside, however the forfeiture of security deposit and imposition of penalty is upheld.
The customs broker contended that the appellant primarily contended that the entire proceedings for revocation of the licence were barred by limitation. According to her, in terms of sub-Regulation (1) to Regulation 17 of the Customs Brokers Licensing Regulations, 2018, the Commissioner of Customs ought to have issued notice in writing to the Customs broker within a period of ninety days from the date of receipt of the offence report stating the grounds on which it is proposed to revoke the licence.
The court noted that a reading of Regulations 16(1) and 17 of the Customs Brokers Licensing Regulations, 2018 makes it explicitly clear that the powers to suspend the licence and the power to revoke the licence are distinct and different. No doubt, Regulation 17(1) of the Regulations of 2018 mandates that the notice to revoke the licence has to be issued within a period of ninety days from the date of the report.
The court refused to accept the contention raised by the customs broker that the proceedings under Regulation 17(1) ought to have been initiated from the date of the first report, i.e. 23.3.2022, primarily for the reason that the powers under Regulations 16 and 17 are distinct and different.
The court held that it was well within the domain of the Customs Authorities to have initiated proceedings under Regulation 17 without initiating measures under Regulation 16(1) by suspending the licence. The mere fact that a preliminary enquiry was conducted for the purpose of ascertaining the facts to determine as to whether a prima facie case for suspension of the licence with immediate effect has been made out or not by itself will not enable the Customs broker to contend that the proceedings for revocation, if any, ought to have been taken within ninety days from the date of the said report.
The court pointed out that a reading of Regulation 17(1) of the Customs Brokers Licensing Regulations, 2018 shows that the Commissioner of Customs is under an obligation to issue a notice to show cause stating the grounds on which it is proposed to revoke the licence. However, the consequence of not issuing the notice within the aforesaid period is nowhere laid down in the Regulations. Whether a particular statute, or the subordinate legislation framed under it is “mandatory” or “directory” depends on whether the thing directed to done is of the essence of the thing required or is a matter of form and what is a matter of essence can often be determined only by judicial construction.
The court noted that the consistent case of the authorities is that the appellant is a habitual offender of the violation of Regulation 10 of the Customs Brokers Licensing Regulations, 2018. The Tribunal proceeded to consider the appeal and found that the proceedings initiated against the appellant are proper. However, while holding so, the Tribunal took a sympathetic view and, finding that the revocation of the licence would detrimentally affect the employees of the appellant firm, decided to interfere with the order revoking the licence of the appellant, but however, confirmed the imposition of penalty and forfeiture of the security deposit.
The court held that it is not always mandatory that while this Court exercises its appellate powers under Section 130 of the Customs Act, 1962, it should interfere with the order, though not legal, which meets the interest of justice.
The court while dismissing the appeal held that no substantial question of law arises for consideration in the appeal.
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Case Details
Case Title: M/S. CARGO CARE INTERNATIONAL Versus COMMISSIONER OF CUSTOMS
Case No.: CUS.APPEAL NO. 8 OF 2024
Date: 2/12/2024
Counsel For Appellant: V.Vijitha
Counsel For Respondent: V Girishkumar
