Customs Broker Can’t Be Faulted Just Because Exporter’s GST Registration Was Previously Cancelled: CESTAT

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi has held that a Customs Broker cannot be faulted merely because an exporter’s GST registration had previously been cancelled if a valid registration existed on the date of the transaction. The bench of Justice Dilip Gupta (President) and K. Anpazhakan (Technical Member) directed immediate restoration of the licence and quashed the forfeiture of security deposit. The appeal arose from an Order-in-Original dated 30 May 2025 passed by the Commissioner of Customs (Airport & General), New Delhi. The Commissioner had revoked the Customs Broker Licence after concluding that the broker had violated Regulations 10(d), 10(e), and 10(n) of the Customs Broker Licensing Regulations (CBLR), 2018. The first allegation concerned Regulation 10(d), which requires a Customs Broker to advise clients to comply with customs and allied laws. The Commissioner observed that although the authorization letter issued by the exporter mentioned that advice had been provided by the Customs Broker, the document did not specify the exact nature, scope, or content of such advice. Based on this reasoning, the Commissioner concluded that the obligation under Regulation 10(d) had not been fulfilled. Rejecting this reasoning, the Tribunal held that the regulation merely requires a Customs Broker to advise the client regarding compliance with applicable laws and regulations. According to the Bench, once the authorization letter itself stated that such advice had been provided, there was no legal requirement to separately narrate or record the contents or details of the advice in the authorization document. The Tribunal therefore found the conclusion regarding violation of Regulation 10(d) unsustainable. The dispute regarding Regulation 10(e) involved allegations that the Customs Broker had failed to exercise due diligence while handling export-related information. The Commissioner noted that the exporter had obtained GST registration on 12 June 2023 and undertaken a high-value export shortly thereafter on 15 June 2023. The authority also observed that the exporter's GST registration had earlier been suo motu cancelled on 25 April 2023 and further pointed out that a photograph of the exporter’s business premises did not display a GST number on the signboard. The Tribunal, however, found no merit in this objection. It observed that the department itself had not disputed that the exporter possessed a valid GST registration on the date when exports were undertaken. In such circumstances, the fact that there had been an earlier cancellation of registration was considered irrelevant. The Bench held that when a valid registration existed at the relevant time, no violation of due diligence obligations under Regulation 10(e) could be attributed to the Customs Broker. The Tribunal also dealt with the allegation under Regulation 10(n), which requires Customs Brokers to verify the identity and functioning of clients using reliable and authentic documents. The Commissioner alleged that the broker ought to have investigated the earlier cancellation and subsequent re-registration of the exporter’s GST registration. CESTAT rejected this reasoning as well and reiterated that the existence of a valid GST registration at the relevant time satisfied the regulatory requirements. Significantly, the Tribunal also noted that in proceedings initiated separately under the Customs Act, the Joint Commissioner had already recorded a categorical finding that the Customs Broker had not violated Regulation 10(n). Finding no sustainable basis for licence revocation, the Tribunal set aside the Commissioner’s order and allowed the appeal, directing that the Customs Broker Licence be restored immediately. Case Details Case Title: M/s Falcon Air Cargo & Travels Pvt. Ltd. Versus Commissioner of Customs (Airport & General) Citation: JURISHOUR-1276-CES-2026(DEL) Case No.: Customs Appeal No. 51737 of 2025 Date: 13/05/2026 Counsel For Appellant: Abhishek Jaju and Ms. Nikita Jaju, Advocates Counsel For Respondent: Srimali Sadashiv, Authorised Representative Click Here To Read Order Read More: Rising Trend of Money Laundering Through Corporate Fraud | Letter Format To ED

Customs Broker Can’t Be Faulted Just Because Exporter’s GST Registration Was Previously Cancelled: CESTAT

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