The court clarified that the issuance of a show cause notice under Regulation 20(1) is not time-barred unless the date of receipt of the offence report is clearly established.

JUDGMENT :

(G.R. Swaminathan, J.)

Thiru.T.Shanmugasundaram was granted customs broker license by the Commissioner of Customs, Customs House, New Harbour Estate, Tuticorin on 26.03.2013. The licensee opened customs broker branch at Chennai in January 2014. F card was also obtained at Chennai in May 2014. Whileso, certain irregularities were allegedly noticed in the operation of the licensee in their Chennai Branch. Finally on 31.08.2015, Shanmugasundaram was prohibited from operating his customs broker license at Chennai. This was communicated to the Commissioner of Customs, Tuticorin by the Assistant Commissioner of Customs, Chennai vide communication dated 06.10.2015. Acting on the same, show cause notice dated 11.11.2015 was issued by the Commissioner of Customs, Tuticorin under Regulation 20(1) of Customs Brokers Licensing Regulations, 2013 calling upon Shanmugasundram to submit his written explanation as to why the customs broker license issued to him should not be revoked and the security deposit of Rs.75,000/- furnished by him shall not be forfeited and as to why, penalty should not be imposed on him under Regulation 22 of Customs Brokers Licensing Regulations, 2013 . Challenging the said show cause notice, Shanmugasundram filed W.P.(MD)No.2043 of 2016. The said writ petition was allowed by the learned Single Judge vide order dated 26.07.2018. Challenging the same, this writ appeal was filed by the Commissioner of Customs, Tuticorin.

2.Heard the learned standing counsel for the appellant and the learned counsel for the respondent / writ petitioner at length. The show notice impugned in the writ petition was issued under Regulation 20(1) of Customs Brokers Licensing Regulations, 2013 . It reads as follows:

“20. Procedure for revoking licence or imposing penalty. —

(1) The Commissioner of Customs shall issue a notice in writing to the Customs Broker within a period of ninety days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the licence or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defense and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.”

The learned Single Judge quashed the show cause notice issued by the appellant on the ground that it was issued beyond the limitation period of 90 days proscribed in the Regulation.

3.The question that calls for consideration is whether the learned Single Judge was right in doing so.

4.It is true that the aforesaid regulation stipulates that the notice should be issued within 90 days from the date of receipt of an offence report. The expression “offence report” was dealt with by a learned Judge of this Court (Mr.Justice V.Ramasubramanian as his Lordship then was) in the decision reported in 2014 (309) E.L.T. 433 (Mad.) (A.M.Ahamed and Company Vs. Commissioner of Customs (Imports), Chennai). Paragraph Nos.17 to 20 of the said judgment read as under:-

“17. Unfortunately, the Regulations do not define what an offence report is and the Regulations do not even state as to how an offence report is to be sent. The Regulations do not even use the expression "offence report" anywhere else other than Regulation 22(1). Even the grounds on which a licence can be revoked or suspended, mentioned in Regulation 20(1), do not include the definition of the expression offence or offence report.

There are only three grounds on which a licence can be suspended or revoked under sub-regulation (1) of Regulation

20. Regulation 20(1) reads as follows:-

"20.Suspension or revocation of licence. (1) The Commissioner of Customs may, subject to the provisions of regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture