CESTAT sets aside Revocation of Customs Broker License as Proceedings Violated Mandatory Timelines under CBLR [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in its recent decision set aside the revocation of license issued to Raj Brothers Shipping Pvt. Ltd., holding that the disciplinary proceedings under the Customs Brokers Licensing Regulations, 2013 (CBLR) were vitiated by non-compliance with mandatory procedural timelines.

The appellant Raj Brothers Shipping Pvt. Ltd., a licensed Customs Broker (CB) based in Chennai, was engaged in clearing a consignment of "Drawer Channel" imported from China by Poonamani Industries.

The importer declared the gross weight as 9,880 kg. However, upon examination by Customs authorities the actual weight was found to be 28,230 kg. This significant discrepancy led to an investigation by the Special Intelligence and Investigation Branch (SIIB).

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The declared value was redetermined and Show Cause Notices were issued to both the importer and the CB. The Commissioner of Customs initially suspended the CB’s license. After due process, the Commissioner revoked the suspension. Subsequently, another Show Cause Notice was issued under Regulation 20.

Based on the inquiry report, the Commissioner of Customs later revoked the license subsequently imposing a penalty of ₹50,000 and forfeited the security deposit of ₹5,00,000.

The CB submitted that there was undue delay between the show cause notice dated 04.05.16 and the final order passed on 11.05.2018, which exceeded the 180 days stipulated in the regulations. The inquiry report was made available on 12.05.2017 also exceeding the 90-day timeline.

The bench comprising M. Ajit Kumar (Member Technical) and P. Dinesha (Member Judicial) held that the order suffers from procedural irregularities, as it was passed without adhering to the timelines specified in the CBLR, 2013.

It further relied on Madras High Court’s ruling in Masterstroke Freight Forwarders Pvt Ltd Vs Commissioner of Customs (2016) wherein it was held that when a statute prescribes a thing to be done in a particular manner, it must be performed in such a manner.

Thereby, when a time limit is prescribed in Regulations which empowers action under Regulation 18 by following the procedure in Regulation 20(1) the use of the term shall not be termed as directory. Under such circumstances the rule can only be termed as Mandatory.

The tribunal emphasized that the procedural irregularities related to timelines had already expired and the violation could not be cured by remanding the matter to the Original Authority.

Accordingly, the appeal was disposed of.

The appellant was represented by N. Viswanathan, while the Department was represented by Anoop Singh.

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