Customs Broker Suspension Over Delayed SCN: CESTAT Quashes Suspension Treating SCN as Time-Barred and Without Jurisdiction [Read Order]

The Chennai Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed the suspension of the customs broker license of the assessee, holding that the Show Cause Notice (SCN) was issued beyond the prescribed time limit under Regulation 17(1) of the Customs Brokers Licensing Regulations (CBLR), 2018, and hence, was time-barred and without jurisdiction.

Kailash Shipping Services Pvt. Ltd., appellant-assessee held a valid Customs Broker License up to 07.01.2026. The license was suspended based on an offence report dated 05.12.2024, which alleged that a tampered and fake self-sealing permission letter dated 04.08.2023 was used by the appellant while clearing three export containers at the DPE facility in Thiruvottiyur, Chennai on 14.11.2024.

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The assessee admitted in a letter dated 21.11.2024 that the manipulation was done by one of its staff members without the knowledge of superiors, and the employee was suspended. Citing failure to meet obligations under the CBLR, 2018, the Principal Commissioner of Customs suspended the license on 06.01.2025 through Order No. 02/2025.

During a personal hearing on 21.01.2025, the assessee sought revocation of the suspension, but the Principal Commissioner continued the suspension through Order No. 04/2025 dated 03.02.2025.

Later, a SCN dated 17.03.2025 (served on 18.03.2025) was issued under Regulation 17(1) of CBLR, 2018, proposing revocation of the license, forfeiture of the security deposit, and imposition of penalty. The matter was taken up for early hearing as it related to the appellant’s livelihood.

The two member bench comprising Ajayan T.V (Judicial Member) and Vasa Seshagiri Rao (Technical Member) noted that the issuance of SCN No. 09/2025 dated 17.03.2025 (issued on 18.03.2025) under Regulation 17(1) of the CBLR, 2018, was an undisputed fact. The matter was taken up for out-of-turn hearing considering its impact on the livelihood of the assessee.

In view of this development, the tribunal examined whether the suspension order and subsequent proceedings could survive if the show cause notice was issued beyond the stipulated time limit under Regulation 17(1).

On examining the CBLR, 2018, the appellate tribunal observed that Regulation 17(1) mandated the Principal Commissioner of Customs to issue a notice within 90 days from the date of receipt of the offence report. The records showed that the offence report was received on 09.12.2024, and therefore, the show cause notice should have been issued on or before 08.03.2025. However, it was issued only on 17.03.2025, clearly beyond the prescribed 90-day limit.

The bench referred to the Madras High Court’s judgment in Santon Shipping Services v. Commissioner of Customs, which held that the 90-day timeline under the equivalent earlier regulation was mandatory and non-compliance rendered subsequent proceedings unlawful.

Relying on this judgment, the tribunal held that the delayed issuance of the show cause notice rendered it without jurisdiction and non-est in law. Consequently, the continued suspension of the customs broker license under the impugned order, which was dependent on the validity of the show cause notice, could not be sustained.

Accordingly, the ITAT set aside the impugned suspension order and held that both the suspension and the proceedings under the show cause notice stood terminated with immediate effect.

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