CESTAT quashes Customs Broker License Revocation as SCN and Order Issued Beyond Mandatory Time Limits under CBLR Regulation 17 [Read Order]
CESTAT set aside the revocation Customs Broker License, forfeiture of the whole security deposit, and the penalty of ₹25,000, as mandatory time limits under Regulation 17 were violated during the proceedings.
CESTAT - quashes - Customs Broker - License Revocation - SCN - taxscan
CESTAT - quashes - Customs Broker - License Revocation - SCN - taxscan
The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) set aside the revocation order of the Customs Broker License and the forfeiture of the whole security deposit, along with a penalty of ₹25,000 as they found that critical mandatory time limits prescribed under Regulation 17 of the Customs Brokers Licensing Regulation, 2018, were breached during proceedings.
The Directorate of Revenue Intelligence sent an offence report to the Commissioner of Customs (Preventive), highlighting the role of the assessee-appellant, Sai Logistics, in respect of certain imports.
The Commissioner, based on this offence report, suspended the Customs Broker License by order dated 15.05.2018, which was subsequently confirmed after a post-decisional hearing on 07.06.2018.
However, a show cause notice (SCN) was issued to the appellant on 26.06.2019, requiring the appellant to explain why the Customs Brokers License should not be suspended with a penalty, which is even after one year from the date of receipt of the offence report.
Regulation 17(1) mandates that such notice be issued within ninety days of receipt of the offence report and led to the enquiry report being submitted on 25.09.2019.
Regulation 17(7) states the Commissioner must pass an order on the license after considering the enquiry report and representation, if any, within ninety days from the date of submission of the enquiry report. In this case, the revocation order was issued much later, on 30.04.2020 and exceeded the prescribed time limit by more than four months.
The appellant argued that with the binding precedents from the decision of the Delhi High Court in Leo Cargo Services vs. Commissioner of Customs, Airport & General, New Delhi (2022), the time limits under Regulation 17 are mandatory and not directory.
The Tribunal observed that the delay in both issuance of the SCN and final order rendered the proceedings invalid.
The bench comprising Dilip Gupta (President) and Hemambikar R Priya (Technical Member) ordered that the time limit, as has been held in the aforesaid decisions, has to be complied with and any breach would result in setting aside the final order.
Accordingly, CESTAT allowed the appeal, set aside the order dated 30 April 2020 revoking the Customs Broker License, and quashed all consequential proceedings, including the forfeiture of the security deposit and imposition of the penalty.
The assessee was represented by Arun Goyal, while Manish Kumar Shukla represented the revenue.
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