Customs Broker Licence Suspension In Heroin Smuggling Case Linked to Mundra Port Upheld: CESTAT

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the suspension of the customs broker licence in connection with a case involving the smuggling of heroin concealed in a consignment declared as semi-processed talc stone. The bench of Dr. Ajaya Krishna Vishvesha (Judicial Member) and Satendra Vikram Singh (Technical Member) dismissed the appeal filed by the broker against the suspension order passed by the Commissioner of Customs, Kandla, observing that the action taken by the department was justified given the seriousness of the allegations and the broker’s failure to exercise due diligence under the Customs Brokers Licensing Regulations (CBLR), 2018. The matter arose from the import of a consignment by M/s Vyom Fashion, Surat, which filed a bill of entry at Mundra Customs on 16 March 2021 declaring the goods as semi-processed talc stone. The documentation for the import, including the bill of entry, was processed by Saarthee Shipping Co. acting as the customs broker. Based on intelligence inputs, the container was selected for scanning by the Container Scanning Division at Mundra Port. The scan flagged the consignment as suspicious with the remark “container mismatch.” Consequently, the container was marked for 100% examination and sampling. However, records revealed that only one package was opened and examined, despite the instructions for complete examination. Subsequent investigations led to the involvement of the National Investigation Agency (NIA), which examined various individuals connected to the consignment. Following the investigation, the Directorate General of Vigilance forwarded a report recommending action against the customs broker. Acting on the report, the Commissioner of Customs, Kandla, suspended the broker’s licence under Regulation 16(1) of CBLR, 2018 pending inquiry proceedings for possible revocation of the licence. Saarthee Shipping Co. argued before the Tribunal that the suspension was unwarranted since revocation proceedings were already underway. The broker contended that it had carried out proper Know Your Customer (KYC) verification and had relied on documents such as the importer’s IEC, GST registration and bank account details before filing the bill of entry. The appellant also argued that the suspension was issued more than four years after the import, which indicated absence of urgency. According to the broker, suspension is an emergent power that must be exercised immediately when required, and the delay made the order unsustainable. Additionally, the appellant claimed that principles of natural justice were not followed and that there was no evidence to establish violation of the provisions of Regulation 10(d), 10(e), 10(f), and 10(n) of the CBLR, 2018. The department opposed the appeal, arguing that the customs broker had failed to exercise due diligence in handling the import documentation. According to the department, the broker accepted documents from an individual claiming to be the accountant of the importer without verifying his identity or authority to represent the firm. Further, the department pointed out that the importer was primarily engaged in trading textiles and textile articles, yet suddenly imported a consignment of talc stone—an unusual transaction that should have prompted greater scrutiny from the broker. The Revenue also emphasized that the broker was present during examination of the goods but failed to ensure compliance with the directive for 100% examination of the container, as required under the relevant public notice governing container scanning procedures at Mundra Port. After hearing both sides, the Tribunal observed that the suspension order was issued promptly after the vigilance report was received in July 2025. The Bench held that there was no delay attributable to the Commissioner, as the matter had remained under investigation by the NIA until the report was submitted. The Tribunal further noted that the broker failed to verify the authenticity of the person who submitted the importer’s documents and could not establish that the individual was authorized to represent the importer. This lapse amounted to a failure to meet the due diligence requirements under the CBLR. Additionally, the Tribunal found that the broker did not ensure proper examination of the goods despite clear instructions for full inspection after the scanning report flagged the container as suspicious. The Bench also highlighted that investigations revealed the smuggling of a large quantity of narcotic drugs—approximately 2,988 kg of heroin—through multiple consignments during the relevant period, underscoring the gravity of the situation. The Tribunal stressed that cases involving smuggling of narcotic drugs have serious implications for national security, foreign exchange outflow, and the welfare of society, particularly the impact on young people. It reiterated that customs brokers hold a position of trust and must strictly comply with their statutory obligations. Referring to earlier judicial precedents, the Bench noted that even negligence without deliberate intent can justify disciplinary action against a customs broker if regulatory obligations are breached. The Tribunal held that there was no justification to interfere with the suspension order at this stage, especially when a detailed inquiry into possible licence revocation was already underway. However, acknowledging that suspension affects the livelihood of employees associated with the broker, the Tribunal directed the Commissioner to strictly adhere to the timelines prescribed under the CBLR, 2018 for completing the inquiry and passing the final order. Accordingly, the appeal was dismissed and the suspension of the customs broker licence was upheld. Case Details Case Title: Saarthee Shipping Co Versus Commissioner Of Customs – Kandla Citation: JURISHOUR-345-CES-2026(AHEM) Case No.: CUSTOMS Appeal No. 11282 of 2025-DB Date: 12/03/2026 Counsel For Appellant: Hardik Modh with Ms. Shweta Garge Counsel For Respondent: Girish Nair, Assistant Commissioner (AR) Click Here To Read Order Read More: Contractor Not Entitled to Refund of Service Tax Passed on to MES: CESTAT

Customs Broker Licence Suspension In Heroin Smuggling Case Linked to Mundra Port Upheld: CESTAT

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