No Evidence of Violations Under CBLR: CESTAT Quashes Customs Broker’s Licence Revocation

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside the revocation of a Customs Broker’s licence, holding that the Department failed to substantiate allegations of violations under multiple provisions of the Customs Broker Licensing Regulations (CBLR), 2018. The Bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that Regulation 10(n) of CBLR requires the Customs Broker to verify the existence and functioning of exporter using reliable, independent authentic documents data or information. Nothing in the regulation requires the Customs Broker to conduct physical verification of the premises. If the IEC, GSTIN, and other documents issued by the various Government Departments indicated that the exporter operates from a particular place, the Customs Broker had no authority to question the wisdom of the officer who issued the documents. The Customs Broker is not a supervisor or an Appellate Authority over the officers who issued the IEC (Directorate General of Foreign Trade) GSTIN (Commissioner of Sales and State Tax), PAN (Income Tax department) etc. The Customs Broker had filed five export shipping bills dated 11 December 2023 for consignments declared as “Mens knitted hoody with zip made of blended cotton and MMF” being shipped to the UAE. A subsequent examination by SIIB revealed discrepancies: Garment tags showed “100% polyester”, contradicting the declared composition. The declared FOB value of ₹4.23 crore was allegedly inflated compared to an SIIB market valuation of ₹75.27 lakh. The exporter and its suppliers were reportedly not traceable at their registered GST addresses. GST registration of the exporter had been cancelled retrospectively with effect from February 7, 2023. Based on these findings, the Commissioner of Customs (Airport & General), New Delhi, revoked the broker’s licence, forfeited the entire security deposit, and imposed a ₹50,000 penalty through an order dated August 8, 2025. The Commissioner alleged violations of Regulations 10(a), 10(d), 10(e), and 10(n) of the CBLR, specifically failure to obtain valid authorization from the exporter; failure to advise the exporter to comply with the law; failure to exercise due diligence; and failure to verify the IEC, GSTIN and functioning of the exporter at the declared address. An inquiry officer appointed under Regulation 17 upheld all these charges. The Tribunal conducted a clause-by-clause examination of the alleged violations and found no sustainable evidence to support any of the charges. CESTAT noted that the broker produced an authorization letter dated 01.12.2023 and KYC documents. The SCN only stated that SIIB officers did not “find” authorization, not that it was never obtained. GST cancellation was possibly retrospective, meaning the registration could have been valid on the date of filing. The Bench held that the mere failure of officers to locate a document during investigation cannot prove its non-existence. The Tribunal emphasised that a Customs Broker does not examine goods or determine values; those responsibilities rest with exporters and Customs officers. Mis-declaration by an exporter does not automatically prove the broker failed in advisory duties. The Department failed to specify what incorrect information the broker imparted, or how due diligence was lacking on the broker’s part. The Tribunal found no basis for the charge. The Bench clarified that Regulation 10(n) does not require physical verification of a client’s premises. Relying on authentic government-issued documents (IEC, GSTIN, PAN) meets the requirement. The broker cannot be expected to second-guess government authorities that issued these registrations. The Tribunal held that none of the regulatory violations alleged were proved. Case Details Case Title: M/S Silver Line Global Freight Pvt Ltd Versus Customs Commissioner Case No.: Customs Appeal No. 51371 Of 2025 Date: 08/12/2025 Counsel For Petitioner: Prashant V. Kubal Counsel For Respondent: Girijesh Kumar Click Here To Read Order Read More: Customs Act | Statements Recorded Without Section 138B Compliance Cannot Be Relied Upon: CESTAT

No Evidence of Violations Under CBLR: CESTAT Quashes Customs Broker’s Licence Revocation

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