The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) quashed the order revoking the customs broker license, citing the Inquiry Officer’s failure to provide critical investigation reports and witness statements to the appellant.
Lohia Travels & Cargo (the appellant) operated as a customs broker with license number R-27/92 valid up to August 31, 2024. The license suspension was initially confirmed on March 20, 2021, pending further inquiry.
A show cause notice was issued under Regulation 17(1) of CBLR 2018 alleging illegal imports of cigarettes and used photocopier machines disguised as aluminum scrap.
Boost Your Business with SME IPO Funding Strategies – Enroll Now
The show cause notice referenced essential documents, including a letter dated February 19, 2021, from the Assistant Commissioner, ICD PPG Commissionerate, and Statements of two individuals Dinesh Kumar Sharma (G-card holder) and Karan Singh Lohia (F-card holder).
The appellant requested some essential documents. Despite repeated requests from the appellant, the Inquiry Officer failed to provide these documents directing the appellant to other departments.
On July 21, 2021, the appellant brought up the need for the documents to prepare a defense during a personal hearing. The Inquiry Officer advised the appellant to approach the Policy Section or the respective recording officers for the required documents.
Boost Your Business with SME IPO Funding Strategies – Enroll Now
The appellant submitted an interim reply on August 10, 2021, citing the inability to respond fully without the required documents. The Inquiry Officer’s report dated August 13, 2021, concluded that the appellant had contravened CBLR 2018 provisions and recommended revocation of the license.
The Commissioner of Customs issued an order revoking the license, on November 8, 2021, forfeiting the security deposit, and imposing a penalty of Rs. 50,000. Aggrieved, The appellant filed an appeal with CESTAT arguing that procedural lapses and denial of documents violated principles of natural justice.
The bench comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) observed that the show cause notice was vague and improperly combined procedural steps under Regulations 17(1) and 17(6) of CBLR 2018.
Boost Your Business with SME IPO Funding Strategies – Enroll Now
The tribunal further observed that the Inquiry Officer failed to fulfill their responsibility to supply documents violating the appellant’s right to cross-examination and proper defense. The tribunal rejected the department’s argument that procedural lapses were immaterial given the seriousness of the charges.
The tribunal quashed the revocation order and set aside all penalties imposed on the appellant.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
