Suspension Of The Licence Of Broker Is Not Warranted After The Investigation And Issue Of Show Cause Notice: CESTAT

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that suspension of the license is not warranted after investigation and the issuing of a show cause notice.

The bench of P.K. Choudhary (Judicial Member) and K. Anpazhakan (Technical Member) has observed that immediate suspension of the customs broker is warranted when there is an apprehension that the customs broker may interfere in the investigation or tamper with any evidence that will be detrimental to the investigation. There is no apprehension, as the investigation has already been completed and a notice issued. Thus, there is no urgent necessity to suspend the license of the customs broker.

The appellant is a customs broker who was issued a Bill of Entry of Customs (Airport and Administration) by the Commissioner of Customs in Kolkata on April 7, 2026. The appellant filed a bill of entry for warehousing the import consignment of M/s. Eastern Light Industries Pvt.Ltd. and opted for First Check, i.e., a 100% examination of the import consignment. After First Check, the SIIB (Port) seized the import consignment under Section 110(1) of the Customs Act, 1962, upon the allegation that the consignment of goods, namely "Data Processing Servers," falling under CTH 84714190, for which the warehousing Bill of Entry filed by the Appellant was not supported by valid documents.

Accordingly, an investigation was initiated by SIIB (Port), and on completion of the investigation, a show cause notice was issued by the Addl. Commissioner of Customs Appraisal Group, Customs House, Kolkata.

On December 20, 2022, the customs broker license of the appellant was suspended under Regulation 16(1) of CBLR, 2018 upon the allegation that the appellants had violated Regulations 10(d), 10(e), 10(f), and 10(m) of CBLR, 2018 while discharging their duty with respect to the import consignment.

The Appellant stated that the order passed under Regulation 16(2) of CBLR 2018 was not warranted as there was no necessity of initiating ‘immediate action’ under Regulation 16(1) of CBLR 2018. The imported consignment reached India on February 23, 2022, and the Bill of Entry for warehousing was filed on May 31, 2022.

The SIIB (Port) seized the consignment on June 17, 2022, on the ground of the non-filing of valid documents along with the Bill of Entry. It was alleged that the customs broker had abetted the illegal attempt to import restricted goods’ namely, second-hand data processing servers, without having mandatory documents.

The appellant stated that the investigation has already been concluded by SIIB (Port) and a show cause notice dated December 9, 2022 has already been issued. Hence, the immediate action required as specified under Regulation 16(1) CBLR 2018 does not arise at a later stage. The suspension under Regulation 16 of CBLR 2018 is not a mandatory pre-condition for initiating action under Regulation 17 of CBLR 2018. The suspension of the license of the customs broker as provided under Rule 16 (1) is necessary only in respect of appropriate cases where ‘immediate action’ is necessary. There cannot be any necessity for ‘immediate action’ after a period of ten months from the date of arrival of the imported consignment in India and a period of more than six months from the date of seizure of the goods.

The tribunal held that suspension of the license at this stage will have serious implications on the livelihood of many employees working in the organization. Since the investigation has already been completed and a notice issued to the importer, we observe that there is no urgent necessity warranting suspension of the license.

Case Title: M/s.India Transport & Travel Private Limited Versus Commissioner of Customs (Airport & ACC), Kolkata

Case No.: Customs Appeal No.75048 of 2023

Date: 11.04.2023

Counsel For Appellant: Arijit Chakraborty

Counsel For Respondent: S.Chakraborty

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