Customs broker due diligence requires proof of knowing facilitation or incorrect advice, not reliance on importer-approved documents.

Customs Broker licensing proceedings were not invalidated because the show-cause notice was issued within the prescribed period and subsequent inquiry and hearing provided adequate opportunity despite no separate post-suspension hearing. Regulation 10(d) was not breached where declarations relied on importer-supplied, importer-approved invoices, bills of lading and checklists, without proof that the broker knew of, colluded in, or facilitated misdeclaration. Regulation 10(e) was also not breached because no evidence showed that the broker imparted incorrect information to the importer. Revocation of licence, security-deposit forfeiture and penalty therefore lacked a sustainable basis.

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Issues: (i) Whether the licensing proceedings were vitiated by delayed issuance of the show-cause notice and absence of a post-decisional hearing following suspension; (ii) Whether the Customs Broker violated Regulation 10(d) of the Customs Brokers Licensing Regulations, 2018 by facilitating misdeclaration of green peas as yellow peas; (iii) Whether the Customs Broker violated Regulation 10(e) of the Customs Brokers Licensing Regulations, 2018 by failing to exercise due diligence regarding information imparted to its client.

Issue (i): Whether the licensing proceedings were vitiated by delayed issuance of the show-cause notice and absence of a post-decisional hearing following suspension.

Analysis: The offence report reached the licensing authority on 09.07.2025 and the show-cause notice issued on 01.08.2025 was within the prescribed 90-day period. Although a separate post-decisional hearing and order under Regulation 16(2) were not issued after immediate suspension, the subsequent notice, inquiry, written submissions and personal hearing afforded adequate opportunity before the final order.

Conclusion: The proceedings were not invalidated by delay or denial of natural justice.

Issue (ii): Whether the Customs Broker violated Regulation 10(d) of the Customs Brokers Licensing Regulations, 2018 by facilitating misdeclaration of green peas as yellow peas.

Analysis: The evolving import-policy notifications distinguished yellow peas from other peas and were capable of causing uncertainty. The bills of entry were filed on the basis of the invoice, bill of lading and importer-approved checklist classifying the goods as yellow peas. A Customs Broker cannot be made liable for a mismatch between the documents supplied by the importer and goods found in a full-container-load consignment, absent material establishing knowledge of, collusion in, or facilitation of misdeclaration. The failure of port customs systems and officers to detect the alleged restriction before clearance also supported grant of benefit of doubt.

Conclusion: No violation of Regulation 10(d) was established, in favour of the assessee.

Issue (iii): Whether the Customs Broker violated Regulation 10(e) of the Customs Brokers Licensing Regulations, 2018 by failing to exercise due diligence regarding information imparted to its client.

Analysis: Regulation 10(e) concerns diligence in respect of information imparted by the Customs Broker to its client. The description and classification were supplied by the importer and reflected in the invoice and bill of lading; no material showed that the Customs Broker imparted incorrect information to the importer. The finding founded on packing lists was therefore unsupported by the facts and did not establish the charged obligation.

Conclusion: No violation of Regulation 10(e) was established, in favour of the assessee.

Final Conclusion: Revocation of the Customs Broker licence, forfeiture of security deposit and penalty lacked a sustainable foundation because the two proved charges were not made out.

Ratio Decidendi: A Customs Broker is not liable under Regulations 10(d) and 10(e) merely for filing declarations based on importer-supplied and importer-approved documents where knowledge, collusion, or imparting of incorrect information is not established.

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