The Delhi High Court has held that customs broker license cannot be cancelled for misuse of Importer Exporter Code (IEC) by other exporters.
The bench of Justice Prathiba and Justice M. Singh Justice Dharmesh Sharma has observed that since the requisite KYC documents had been submitted by the Respondent and the main irregularity was in respect of the exporter Shri. Rakesh Gupta, proprietor of M/s. U.P. Garments, whose Importer Exporter Code (IEC) had been misused by other exporters in conspiracy with each other, the Respondent’s Customs Broker license cannot be cancelled for perpetuity.
The Customs Department had found certain inaccuracies in the manner in which the Respondent- M/s. Global Links, Delhi, a Customs House Agent (CHA), was facilitating exports and enabling claiming of duty drawbacks by certain exporters.
A show cause notice was issued on 9th May, 2023 by the Commissioner of Customs (Airport & General), New Delhi, wherein the Respondent filed its reply and the Order. In the Order, the Commissioner of Customs found certain irregularities and, inter alia, revocation of the Respondent’s Customs Broker license was directed. The security deposit furnished by the department was also forfeited and a penalty of Rs. 50,000 was also imposed.
The Order was challenged by the department in an appeal before the CESTAT and vide the impugned Final Order the CESTAT has set aside the revocation of the license.
The reasoning given by the CESTAT is that the KYC documents were duly submitted by the Respondent herein. However, the Department’s case is that the Customs Broker did not explain as to how it had obtained the said KYC documents. Hence, there were serious irregularities in the conduct of its business by the Customs Broker.
The Court noted that the customs Broker could not conduct any business as a CHA during the period from 30th October, 2023 till 10th July, 2024.
The court held that there is no ground set out in the Order as to how the Respondent had violated the requirement of declaration under Regulation 17(9) of the Customs Brokers Licensing Regulations, 2013.
Read More: Andhra Pradesh High Court Quashes Assessment Order Lacking DIN
Case Details
Case Title: Commissioner Of Customs (Airport And General) Versus Global Links
Case No.: CUSAA 39/2025 & CM APPLs. 3938/2025, 3939/2025
Date: 22.01.2025
Counsel For Petitioner: Aakarsh Srivastava, Standing Counsel for Customs
Counsel For Respondent: None
