CESTAT Dismisses Customs Broker’s Appeal Challenging Prohibition Order as Infructuous Following Expiry of Registration [Read Order]
The appellant argued that the prohibition order in Mumbai had become untenable and unsustainable following the quashing of the enquiry proceedings by the High Court and subsequent restoration of the licence.
Customs - broker - appeal - taxscan
Customs - broker - appeal - taxscan
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the validity of a prohibition order imposed on a Customs Broker, and dismissed its appeal as infructuous.
The Tribunal noted that the broker’s registration in the Mumbai Customs Commissionerate had expired, leaving no ongoing cause of action, and therefore, no interference with the original order was warranted.
The appellant, Getz Transport Logistics Pvt. Ltd., holding Customs Broker Licence No. R-520/CHA-Chennai, had extended operations to Mumbai Customs under CHA No. 11/1909 with validity up to 21.03.2024.
Mumbai Customs, upon examining ten Bills of Entry, observed irregularities in description, quantity, and valuation of imported goods. Consequently, a temporary prohibition order was passed, later confirmed by Order No. 67/2014-15, under Regulation 23 of CBLR, 2013. This action was taken for alleged violations of Regulations 11(a), 11(d), 11(k), 11(m), and 11(n).
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The appellant simultaneously faced suspension of its licence by the Chennai Customs Adjudicating Authority. However, the Hon’ble Madras High Court quashed the show-cause notice initiating proceedings under Regulation 20 for revocation of the licence and imposition of a penalty. Subsequently, CESTAT restored the appellant’s licence to operate in Chennai.
During the hearing, the appellant argued that the prohibition order in Mumbai had become untenable and unsustainable following the quashing of the enquiry proceedings by the High Court and subsequent restoration of the licence. The appellant contended that nothing survived that required continuation of the prohibition order.
The Department, represented by the Deputy Commissioner, submitted that the prohibition order was valid and its continuation was legally sustainable to prevent misuse of the Customs Broker licence.
Upon review, the two-member bench comprising Dr Suvendu Kumar Pati (Judicial Member) and R.Bhagya Devi (Technical Member) noted that while Regulation 23 empowers the Commissioner to prohibit a Customs Broker independently of enquiry proceedings, the specific prohibition in this case was conditional upon the outcome of the enquiry, which had been rendered moot by the High Court’s decision.
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Furthermore, the appellant had not approached the Commissioner to continue operations after the expiry of the enquiry-related timelines. Most importantly, the appellant’s registration in Mumbai had expired on 21.03.2024, effectively ending the legal basis for operations in that Commissionerate.
The Tribunal observed that, in light of these facts, the appeal challenging the prohibition order had become infructuous. There was no remaining cause of action, and therefore, no interference with the original prohibition order was warranted.
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