Unjustified Procedural Delays by Authorities: CESTAT sets aside Customs Broker License Revocation Order [Read Order]

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) set aside the revocation of the customs broker license due to unjustified procedural delays by customs authorities.

M Dharamdas & Co., the appellant, was a licensed customs broker handling the import of cranes. The customs authorities alleged that the appellant had violated multiple provisions of the Customs House Agents Licensing Regulations, 2004, and later the Customs Brokers Licensing Regulations, 2013. The Commissioner of Customs (General), Mumbai, issued an order revoking the customs broker license and forfeiting the security deposit.

The appellant challenged this order before CESTAT, arguing that the proceedings were delayed beyond the prescribed time limits under both CHALR 2004 and CBLR 2013. The appellant pointed out huge gaps in the process, including a 109-day delay in initiating proceedings after the offense report, a 356-day delay in completing the inquiry, and a total span of 493 days before the final order was issued. The appellant argued that no justification was provided for these delays.

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The revenue defended the revocation, arguing that the procedural timelines prescribed in the regulations are directory rather than mandatory. The revenue argued that the revocation was based on substantive violations and that procedural lapses should not invalidate the proceedings.

The two-member bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) referred to the Bombay High Court's ruling in Principal Commissioner of Customs (General), Mumbai v. Unison Clearing Pvt. Ltd., which held that regulatory timelines are not strictly mandatory but they cannot be ignored without a valid justification for the delay.

The tribunal observed that the customs authorities failed to provide any explanation for the delay and that procedural deadlines cannot be bypassed arbitrarily. The tribunal held that in the absence of a valid justification, the revocation order was not sustainable. Without digging deeper into the merits of the case, CESTAT set aside the revocation order and allowed the appeal.

To Read the full text of the Order CLICK HERE

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