CESTAT revokes customs broker license suspension citing natural justice violation under CBLR 2018 Regulations 10(d) and 10(m)

CESTAT Mumbai allowed the appeal challenging suspension of customs broker license. The Principal Commissioner had suspended the license alleging violations of CBLR 2018 Regulations 10(d) and 10(m) for incomplete declaration of imported goods and mandatory certifications. CESTAT found no evidence of purposeful mis-declaration by the customs broker who had filed bills based on available invoices and packing lists. The tribunal noted proper BIS certificates were submitted during investigation. Crucially, CESTAT held natural justice was violated as the broker was denied cross-examination opportunity during inquiry proceedings, citing precedent from Telangana HC. The impugned order was set aside and license suspension revoked.

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Issues Involved:
1. Violation of Regulations 10(d) and 10(m) of Customs Brokers Licensing Regulations (CBLR), 2018.
2. Compliance with principles of natural justice under Regulation 17(4) of CBLR, 2018.

Summary:

Issue 1: Violation of Regulations 10(d) and 10(m) of CBLR, 2018

The appellants, M/s JZN Logistics, were accused of contravening Regulations 10(d) and 10(m) of CBLR, 2018, based on an offence report from the Central Intelligence Unit (CIU) regarding imported goods in container No. TEMU 8525264. The Principal Commissioner of Customs (General), Mumbai-I, suspended the appellants' Customs Broker (CB) license and initiated inquiry proceedings. The inquiry report concluded that the appellants had violated the regulations, leading to the revocation of their CB license, forfeiture of the security deposit, and imposition of a penalty of Rs. 50,000.

The appellants contended that they had made declarations based on documents provided by the importers and were unaware of any mis-declaration. They argued that they had diligently discharged their duties and had no connection with the violations of Customs law. The Tribunal found that the appellants had declared the description of the imported goods based on the invoices and packing lists provided by the importer. There was no evidence that the appellants had purposefully mis-declared the details of the imported goods. The Tribunal concluded that the appellants did not violate Regulation 10(d) and 10(m) as there was no evidence of delay or inefficiency on their part.

Issue 2: Compliance with principles of natural justice under Regulation 17(4) of CBLR, 2018

The appellants requested cross-examination of the importer and other persons whose statements were recorded by the Inquiry Officer, which was denied. The Tribunal found that denying the opportunity for cross-examination constituted a violation of the principles of natural justice. The Tribunal referred to the case of M/s Shastha Freight Services Pvt. Ltd., where the Hon'ble High Court of Telangana and the Supreme Court emphasized the importance of cross-examination in ensuring natural justice. The Tribunal also cited the case of Andaman Timber Industries, where the Supreme Court held that denying cross-examination when the statements are the basis of the order is a serious flaw, making the order a nullity.

The Tribunal concluded that the failure to provide an opportunity for cross-examination in the inquiry proceedings was a violation of Regulation 17(4) of CBLR, 2018, and thus, the impugned order could not be legally sustained.

Conclusion:

The Tribunal set aside the impugned order, finding no merits in the revocation of the CB license, forfeiture of the security deposit, or imposition of a penalty. The appeal was allowed in favor of the appellants.

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