Madras High Court Quashes Time-Barred Revocation of Customs Broker License

Court rules against Customs Department for failing to adhere to the statutory deadline under Customs Brokers Licensing Regulations, 2018.

In a significant ruling, the Madras High Court's Madurai Bench has quashed the revocation of a customs broker's license and the imposition of penalties, citing the Customs Department's failure to comply with the statutory timeline mandated by the Customs Brokers Licensing Regulations, 2018. The judgment was delivered by Justice G.R. Swaminathan in the case of M/s. ACS Shipping & Logistics versus the Commissioner of Customs.

The petitioner, M/s. ACS Shipping & Logistics, challenged the revocation of their customs broker license, forfeiture of their security deposit, and a penalty of Rs. 50,000. The revocation followed allegations that the petitioner facilitated fraudulent export claims by M/s. J.Tex India, who allegedly availed ineligible tax refunds using bogus GST registration.

The crux of the petitioner’s argument hinged on the timing of the action taken by the Customs Department. Regulation 17(1) of the Customs Brokers Licensing Regulations, 2018, mandates that the Principal Commissioner of Customs must issue a notice to the customs broker within 90 days from the date of receiving an offence report. However, the Customs Department issued a show cause notice on September 14, 2021, almost a year after the prohibitory order was issued on November 18, 2020, by the Mumbai Customs Commissionerate, which qualified as an offence report.

Justice Swaminathan highlighted that the respondent, the Commissioner of Customs, failed to establish the date of receipt of the offence report, a crucial requirement for the limitation period. The Court noted that the prohibitory order was presumed to have been received by the Customs Commissionerate as it was officially marked to them, shifting the burden of proof to the respondent to demonstrate otherwise.

The Court reiterated that the 90-day limitation period is mandatory, and the failure to act within this period renders the proceedings null and void. Consequently, the Court quashed the impugned order, allowing the writ petition and closing the connected miscellaneous petition without costs.

The judgment underscores the importance of adhering to statutory timelines in administrative proceedings, ensuring procedural fairness and accountability.

Bottom Line:

Customs Brokers Licensing Regulations, 2018 - Revocation of customs broker's license and imposition of penalty - Action initiated by licensing authority was held to be time-barred as it was not within 90 days from the date of receipt of an offence report, as mandated by Regulation 17(1).

Statutory provision(s): Customs Brokers Licensing Regulations, 2018 Regulation 17(1)

M/s.ACS Shipping & Logistics v. Commissioner of Customs, (Madras)(Madurai Bench) : Law Finder Doc Id # 2799315