TaxTMI 
TaxTMI 
TaxTMI 
The Hon'ble High Court of Delhi, in Commissioner of Customs Airport and General New Delhi Versus M/s. Entire Logistics Pvt. Ltd. - 2026 (3) TMI 860 - DELHI HIGH COURT held that an Order-in-Original('OIO') cannot be sustained if it travels beyond the scope of the Show Cause Notice ('SCN'), and that vague Show Cause Notices ('SCNs') lacking specific allegations violate the principles of natural justice.
Facts:
- The Commissioner of Customs ('Appellant') filed an appeal under Section 130 of the Customs Act, 1962, challenging a CESTAT order dated August 28, 2024. The CESTAT had quashed an earlier OIO dated February 14, 2024 that revoked the Customs Broker License of the M/s Entire Logistics Pvt Ltd ('Respondent').
- The appellant had issued an SCN alleging violations of Regulations 10(a), 10(d),10(e), and 10(n) of the Customs Brokers Licensing Regulations ('the CBLR'), 2018.
- The respondent argued that the SCN was too vague to understand how the CBLR violations were inferred, and that the adjudicating authority travelled beyond the SCN in the Order-in-Original.
Issues:
- Whether an Order-in-Original can be legally sustained if it travels beyond the scope of the Show Cause Notice?
- Whether a Show Cause Notice that relies on borrowed material without specifying how it constitutes a violation of the relevant regulations violates the principles of natural justice?
Held:
The Hon'ble High Court of Delhi is under [CUSAA 55/2025] held that:
- The respondent was not provided with specific allegations explaining the mode or manner in which the violations were attributable to them, making the SCN vague. Even though the Order-in-Original detailed the violations, it impermissibly travelled beyond the scope of the SCN.
- Relying on the Supreme Court's ruling in Commissioner of Central Excise, Bangalore Versus Brindavan Beverages (P) Ltd. and Ors. - 2007 (6) TMI 4 - Supreme Court., the Court reiterated that the SCN is the foundation on which the Department builds its case. If the SCN is vague or lacks details, it denies the noticee a proper opportunity to meet the allegations.
- Orders based on vague SCNs, or those considering material not part of the SCN record, violate the principles of natural justice.
Hence, the High Court held that no substantial question of law was involved, and it dismissed the appeal and upheld the CESTAT's order.
Relevant Sections:
Section 130 of the Act: Appeal to High Court.-(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for assessment), if the High Court is satisfied that the case involves a substantial question of law.