The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has  quashed customs broker license revocation held that there is no legal requirement for customs brokers to physically verify premises.

The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the Regulation requires the Customs Broker to verify the identity of the client (i.e., importer firms) and in the facts of this case since the clients (i.e., importer firms) exist as is evident from the functionality of the  Importer -Exporter Code (IEC), it is not possible to hold that there has been a blatant violation of this Regulation, which would justify the revocation of Customs Broker license.

The appellant is a Customs Broker. A specific intelligence was developed that M/s. Tanu Trading (IEC-AMCPGS448G) had imported certain cosmetic items vide warehousing Bill of Entry showing their intention for re-export of the goods under Section 69 of the Customs Act, 1962. 

However, instead of depositing the goods in the bonded warehouse, the goods were being diverted to the local market for home consumption. The officers visited the custom bonded warehouse of M/s. Akshay Logistics where the subject imported goods were destined for deposition, but the goods were not found. 

Meanwhile, letter was received forwarding an offence report dated 09.05.2023, for taking appropriate action against the appellant along with the investigation report dated 06.07.2023. 

Accordingly, the Customs Broker license was suspended under Regulation 16(1) of the CBLR, 2018. A show cause notice was issued to the CB and on receipt of the Inquiry report, and vide the order dated 23.02.2024, the CB license was revoked. 

The tribunal held that the KYC documents submitted by the appellant are all valid documents. There is no other requirement under Regulation 10 (n) which remains to be fulfilled by the appellant. 

The tribunal while allowing the appeal of the customs broker held that the revocation of CB license by the Customs authorities is not sustainable, and impugned order is set aside with consequential benefit, if any. 

Case Details

Case Title:  M/s Jaiswal Import Cargo Services Limited Versus Commissioner of Customs, Airport & General, New Delhi 

Case No.: Customs Appeal No. 50251 Of 2024

Date: 02.01.2025

Counsel For Appellant: Vidushi Shubham

Counsel For Respondent: Mukesh Kumar Shukla