2026 (2) TMI 406 - HC - Customs

Right to cross-examination under Customs Brokers Licensing Regulations upheld; revocation of licence set aside for natural justice breach.

Denial of the right to cross-examine witnesses relied upon in a licence-revocation inquiry breached the principles of natural justice and vitiated the ... Right to cross-examination under the Customs Brokers Licensing Regulations - breach of principles of natural justice vitiating disciplinary proceedings - procedural mandatory nature of Regulation 17(4) of CBLR, 2018 - relevance of non-adherence to prescribed timelines in CBLR where natural justice is breached - HELD THAT:- After going through the impugned Order, we find that no substantial question of law arises in the present case. We say this because admittedly, as recorded in the impugned Order, despite the Respondent seeking an opportunity to cross-examine persons examined by the Revenue, in support of the grounds forming the basis of the proceeding, the aforesaid opportunity was denied. The denial was on the basis that there is no retraction filed by any of the persons whose statement were recorded under Section 108 of the Customs Act, 1962, and therefore, there is no need to cross-examine all the persons, as demanded by the Respondent. In the facts of the present case, admittedly, the inquiry relies upon the oral evidence/statements recorded of certain persons. Admittedly also, these persons were not cross-examined by the Respondent Assessee because the right to cross-examine these persons was denied by the Inquiry Officer. We find that, in the facts of the present case, once there is a breach of Regulation 17(4), then we do not find any infirmity in the Order passed by the Tribunal in setting aside the Order of the Commissioner revoking the license of the Respondent Assessee. No hesitation in holding that the CESTAT was fully justified in setting aside the Order of the Commissioner on the ground of non-compliance of Regulation 17(4) of the CBLR, 2018. As far as the finding given by the Tribunal on the time line is concerned, the same becomes irrelevant when one takes into account the fact that the Order of the Commissioner cannot be sustained on the ground that it is passed in violation of Regulation 17(4) and in breach of the principles of natural justice. We, accordingly, find that the above Appeal does not give rise to any substantial question of law requiring any answer by the Court. It is accordingly dismissed. Issues: Whether revocation of a customs broker's licence and related penalties could be sustained where Regulation 17(4) of the Customs Brokers Licensing Regulations, 2018 (entitling the broker to cross-examine witnesses examined in support of the grounds for proceedings) was not complied with.Analysis: Regulation 17(3) requires consideration of documentary and oral evidence relevant to the grounds of inquiry and permits questions to persons tendering evidence. Regulation 17(4) explicitly entitles the customs broker to cross-examine persons examined in support of the grounds, and mandates that if permission to examine is declined the reasons be recorded in writing. The inquiry in the present matter proceeded on oral statements recorded (including statements under Section 108 of the Customs Act, 1962) which were not made available for cross-examination as required by Regulation 17(4). Precedential authority addressing an identical provision in earlier regulations found that non-compliance with the provision amounted to violation of procedural requirements and principles of natural justice, and such breach vitiates an order based on the inquiry report.Conclusion: The revocation of the customs broker's licence and related penalties cannot be sustained because of non-compliance with Regulation 17(4) of the Customs Brokers Licensing Regulations, 2018; the appellate order setting aside the revocation is justified.