Legal principle

Failure of the Inquiry Officer to communicate the inquiry report within the 90-day period stipulated in Regulation 17(5) of the CBLR, 2018 — even after reckoning the COVID-19 extension under Notification G.S.R.601(E) dated 30.09.2020 — is fatal, and the proceedings under the CBLR must abate.

Court decision

The Court held that the enquiry report was not communicated to the licensing authority within 90 days or within the extended period: department records showed the file was received by the Customs House only on 07.01.2021 and approval for transmitting the report was given only on 02.02.2021. The failure to comply with Regulation 17(5) CBLR, 2018 was held fatal and the proceedings were directed to abate. W.P.No.5787 of 2021 was allowed in favour of the broker; W.P.Nos.9145 of 2020 and 5782 of 2021 were closed in view of that order.

Facts

M/s. Jai Logistics Services Pvt. Ltd., a customs broker (CHA), had its licence suspended by the Principal Commissioner of Customs, Chennai under Regulation 16 of the CBLR, 2018 by order dated 12.06.2020, followed by a show cause notice dated 21.06.2020 under Regulation 17(1) proposing revocation, forfeiture of security and penalty under Regulations 14 and 18. The case arose from an exporter's allegedly wrongful claim of duty drawback under Section 75 of the Customs Act, 1962 read with the Customs, Central Excise and Service Tax and Drawback Rules, 2017, with the broker alleged to be connected to the fraud. An Assistant Commissioner of Customs (CCO) was appointed Inquiry Officer, whose inquiry report was made ready on 30.12.2020, was received by the Customs House only on 07.01.2021, and was served on the broker with a covering letter dated 03.02.2021. The broker filed three writ petitions challenging the suspension order, the show cause notice and the inquiry report.

Key provisions

• Regulation 17(5), Customs Brokers Licensing Regulations, 2018 — Procedure for revoking license or imposing penalty
• Regulation 16, Customs Brokers Licensing Regulations, 2018 — Suspension of license
• Regulation 18, Customs Brokers Licensing Regulations, 2018 — Penalty
• Regulation 20(5), Customs Brokers Licensing Regulations, 2018 — Membership of associations
• Regulation 14, Customs Brokers Licensing Regulations, 2018 — Revocation of licence or imposition of penalty
• Section 75, Customs Act, 1962 — Drawback on imported materials used in the manufacture of goods which are exported