Customs Brokers Licensing Regulations | 'Offence Report Need Not Be Penal'; 90-Day Period Begins Only Upon Receipt Of Report: Madras High Court

The Madras High Court stated that the offence report under Regulation 17(1) Customs Brokers Licensing Regulations, 2018, need not necessarily have a penal connotation. Also, it stated that the 90-day limitation period begins only upon receipt of the offence report.The bench stated that, "the offence report must be received by the office of the licensing authority, and the limitation period will start running only from the date of its receipt. Even if the licensing authority can be attributed with knowledge in this regard, that would not count for the purpose of limitation. It is the date of receipt of the offence report that is material. Such an interpretation alone would be in consonance with the text of Regulation 17." Justice G.R. Swaminathan stated that an offence report need not necessarily have a penal connotation. Any official communication or proceeding or order, or notice setting out the misconduct committed by the customs broker in any customs station would qualify to be an offence report. The offence report need not be in any particular format. The only requirement is that the offence report has to emanate from an official source. In this case, the petitioner is a licensed customs broker. His license was issued by the Commissioner of Customs/respondent. The Commissioner of Customs revoked the petitioner's license and also forfeited the security deposit furnished by him. Penalty of Rs. 50,000/- was also imposed. The counsel for the petitioner assails the impugned order on several grounds. The foremost ground put forth is that the impugned action is time-barred. Admittedly, the cause of action had arisen way back in June–September 2018. The fraud committed by the exporter was noticed by DRI, and an investigation was taken up. The export had taken place through the Mumbai Customs Commissionerate, which was duly informed. It was further argued that Vide order dated 18.11.2020, they prohibited the petitioner from operating within the Mumbai Customs Commissionerate. The Commissioner of Customs did not take any action within the statutorily prescribed 90 days. The Commissioner of Customs issued a show cause notice only on 14.09.2021 and the impugned order on 25.02.2022. The bench, after analysing Regulation 17(1) of the Customs Brokers Licensing Regulations, 2018 and observed that the Principal Commissioner of Customs shall issue a notice in writing to the customs broker within a period of 90 days from the date of receipt of an offence report. Regulation 17(1) mandates that the authority must initiate action for revocation or imposing a penalty within a period of 90 days. This period has to be reckoned from the date of receipt of an offence report. The expression “offence report” was not originally defined, the bench added. The bench noted that the Commissioner of Customs has not pleaded as to what offence report was received by him, which triggered the impugned action. No material has been placed to show that the offence report was received only on 22.06.2022. The Commissioner of Customs has miserably failed to discharge the obligation cast on him to show that the impugned action was initiated within the period of limitation prescribed by Regulation 17(1) of CBLR, 2018, added the bench. In view of the above, the bench allowed the petition. Case Title: M/s. ACS Shipping & Logistics v. The Commissioner of CustomsCitation: 2025 LiveLaw (Mad) 375 Case Number: W.P(MD)No.4416 of 2022 Counsel for Petitioner/Assessee: S. Baskaran Counsel for Respondent/Department: R. Gowrishankar Click Here To Read/Download The Order

Customs Brokers Licensing Regulations | 'Offence Report Need Not Be Penal'; 90-Day Period Begins Only Upon Receipt Of Report: Madras High Court

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Customs Brokers Licensing Regulations | 'Offence Report Need Not Be Penal'; 90-Day Period Begins Only Upon Receipt Of Report: Madras High Court

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