M/s Vetri Impex vs CC, New Delhi

Appeal has been filed against Order No. 13/NLB/Policy/2012 dated 18.9.2012 in terms of which Commissioner of Customs (Import & General),

New Delhi in exercise of the powers conferred under sub-regulation (3) of Regulation 20 of the CHALR, 2004 confirmed the suspension order No.

09/POLICY/VKG/2011 dated 2.5.2011 suspending the CHA licence of the appellant CHA till the proceedings contemplated against it under

Regulation 22 ibid were completed.

The facts of the case are as under.

Mumbai Customs reported that the export consignment of M/s VACKs Enterprise, Bhiwandi under four Shipping Bills all dated 26.8.2010 covering

the goods viz. ladies garment accessories (made of manmade 100% polyester filament yarn) (scarves) having total declared FOB value of Rs.86.88

lakhs were found to be overvalued and that the appellant's local brand head in Mumbai (Mr. Sasidharan Kunju Pillai) admitted that he did not meet the

exporter personally and the job was received through a forwarder named M/s Swastik Exim and a representative of said Swastik Exim also could not

lead to the main person (exporter). The CHA (appellant) was thus held guilty of violation of Regulation 13(a) on the ground that neither the exporter

nor the suspected middleman could be found at their available addresses and that the CHA also failed to follow Regulation 13(a), 13(k) and 13(O) by

not obtaining authorisation from the exporter (as none was produced before the investigation officer), not maintaining the prescribed job register and

not verifying the identity and antecedents of the exporter. The appellant also failed to exercise proper supervision over its employee Shri Sasidharan

Kunju Pillai and thereby violated Regulation 19(8) of CHALR, 2004.

In the wake of the foregoing, the Commissioner has passed the following order: Â

In exercise of the Powers conferred under Sub-Regulation (3) of Regulation 20 of the CHALR, 2004, I confirm the suspension Order No.09

/POLICY /VKG/2011 dated 2.5.2011 till the proceedings contemplated against the said CHA under Regulation 22 ibid are completed.

This order is being issued without prejudice to any other action that may be taken against the CHA or any other person (s)/ firm (s) etc.

under the provisions of the Customs Act, 1962 and Rules/Regulations framed there under or any other law for the time being in force for the

present or any other past violations committed by them.

The appellant has contended that:

(i) The investigation by SIIB, Bombay commenced on 21.9.2010 and the suspension was ordered on 2.5.2011. Thereafter the hearing for confirmation

of suspension was conducted on 28.2.2012 and the impugned order was issued on 19.9.2012. Thus there has been clear violation of the time lines

prescribed in respect of Regulation 22 of the CHALR, 2004 which vitiated the said order and for that reason, the same should be set aside.

The Id. D.R. contended that the impugned order is a speaking one and the time-lines are only advisory and not mandatory.

We have considered the contentions of both sides. As the issue involved is suspension of the licence and not revocation thereof, it is not necessary

to go into the details of the merits of the case. It is seen that CBEC vide Circular No. 9/2010-Cus. dated 8.4.2010 inter alia communicated the

following decision with regard to ""time limit for completion of suspension proceedings against CHA licencee under Regulation 22:

7.2. In cases where immediate suspension action against a CHA is required to be taken by a Commissioner of Customs under Regulation

20(2), there is no need for following the procedure prescribed under Regulation 22 since such an action is taken immediately and only in

justified cases depending upon the seriousness or gravity of offence. However, it has been decided by the Board that a 'post-decisional

hearing' should be given in all such cases so that errors apparent, if any, can be corrected and an opportunity for personal hearing is

given to the aggrieved party. Further, Board has also prescribed certain time limits in cases warranting immediate suspension under

Regulation 20(2). Accordingly the investigating authority shall furnish its report to the Commissioner of Customs who had issued the CHA

license (Licensing authority), within thirty days of the detection of an offence. The Licensing authority shall taken necessary immediate

suspension action within fifteen days of the receipt of the report of the investigating authority. A post-decisional hearing shall be granted to

the party within fifteen days from the date of his suspension. The Commissioner of Customs concerned hall issue an adjudication order,

where it is possible to do so, within fifteen days from the date of personal hearing so granted by him."" (emphasis added)

In the present case, we find that personal hearing was granted after more than nine months after the date of suspension. Not only that, after

completion of hearing, the Commissioner took almost seven months to issue the order. We are aware that the time lines prescribed by CBEC are

advisory in nature and cannot be given status of mandatory time lines. However, even advisory time lines have certain sanctity inasmuch as if such

time lines have been exceeded beyond all reasonable limits, with regard to completion of suspension proceedings, such proceedings will have to be

held to be fatally vitiated, more so when such proceedings have a direct and adverse bearing on some ones livelihood and freedom to pursue a

profession. Here is the case where the hearing was granted nine months after the suspension order while the time limit was 15 days and order was

issued almost seven months after the hearing while it was expected to be issued in about 15 days. We note that the word used in the above quoted

paragraph No.7.2 in the sentences underlined is ""shall"" and not ""will"" which is indicative of the seriousness which the CBEC sought to attach to the

prescribed time-lines and therefore these time-lines deserve to be given serious consideration and due weightage even if these are not mandatory.

In these circumstances, we are of the view that at this point of time which is almost two years and nine months after the date of the impugned

order, we do not find any justification in allowing the impugned order to remain alive. Accordingly, we set aside the impugned order and allow the

appeal.