The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that the timelines prescribed under the Customs Brokers Licensing Regulations, 2018, cannot be treated as a “directory” unless negligence or delay on the part of the customs broker is conclusively proven. The tribunal rejected the licensing authority’s justification of procedural delays due to officer transfers.
M D Ruparel & Sons, the appellant is a customs broker licensed under Customs Brokers Licensing Regulations, 2018 filed bills of entry for Firoza Movie International Enterprises to clear “blank cartridges 9mm Kaiser,” declared as “air gun pellet dummies.”
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The first import of similar goods was cleared after examination and the second shipment was sent for forensic testing and found to contain restricted items ( “blank cartridges” ).
The department initiated proceedings under the Customs Act, 1962, and the appellant’s license was suspended but later restored on appeal. The appellant was charged with violating Regulations 10(d), 10(e), and 10(f) of the Customs Brokers Licensing Regulations, 2018.
An inquiry report submitted on 13th September 2023 concluded violations of regulations 10(d), 10(e), and 10(f). After reviewing this, the Principal Commissioner of Customs revoked the license, forfeited the security deposit, and imposed a penalty of Rs. 50,000.
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The appellant’s counsel before the CESTAT argued that critical documents, such as earlier cleared import records, forensic reports, and importer statements, were not provided or tested through cross-examination.
The appellant’s counsel pointed out that there were huge delays at every stage, including the Show Cause Notice that was issued on 26th September 2022 and the Inquiry Report submitted on 13th September 2023. They argued these delays violated timelines prescribed under Regulation 17 and were unjustifiable.
The two-member bench comprising C.J. Mathew ( Technical Member ) and Ajay Sharma ( Judicial Member ) criticized the licensing authority for procedural inefficiencies and these delays were unjustified.
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The tribunal rejected the department’s argument that officer transfers justified delays stating it was the responsibility of the licensing authority to adhere to timelines and ensure efficient processes. The tribunal found no evidence of negligence or contributory delay by the customs broker, making the invocation of “directory” timelines not maintainable.
So, the tribunal set aside the Principal Commissioner’s order to revoke the license, forfeiture of the security deposit, and penalty. The Custom Broker’s appeal was allowed.
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