TaxTMI 
TaxTMI 
2026 (1) TMI 1298
X X X X Extracts X X X X
X X X X Extracts X X X X
....pt of offence report in the form of Order-in-Original against the Appellant in following two different cases: - i. Order-in-Original No. 104579/2023 dated 07.02.2024 which was received by the Respondent on 28.04.2025 from Import Commissionerate, Chennai Customs Zone, wherein the Adjudicating Authority has imposed a penalty of Rs. 2,00,000/- (Rupees Two Lakhs only) under Section 117 of the Customs Act, 1962 on Shri M. Vinoth, partner in the Appellant firm. ii. Order-in-Original No. 106410/2024 dated 24.04.2024 which was received by the Respondent on 16.05.2025 from Import Commissionerate, Chennai Customs Zone, wherein the Adjudicating Authority has imposed a penalty of Rs. 10,00,000/- (Rupees Ten Lakhs only) under Section 114AA of the Customs Act, 1962 on Shri M. Vinoth, partner in the Appellant firm. 4. The role of Appellant in the First Case (O-in-O No. 104579/2023 dated 07.02.2024) has been detailed out by the Respondent in paras 4.1 and 4.2 of the order of suspension dated 12.06.2025 as follows: - "4.1 It appears from depositions of Shri M. Vinoth, partner of M/s. V Unit, Chennai (CB) that CB generate check-list for filing bills of entry and after a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and 16.1 of the order of suspension dated 12.06.2025 as follows: - "16. Violations made by the Customs Broker in r/o CBLR, 2018 in First Case (O-in-O No.104579/ 2023 dated 07.02.2024) The Customs Broker i.e. M/s V-Unit, Chennai prima facie appears to have violated the following regulations of Customs Broker Licensing Regulations CBLR, 2018: i. Regulation 10(a) mandates the CB to obtain authorization letter from the Exporter/Importer at the time of filing of Bill of Entry. In the instance Case, Shri M. Vinoth, partner of M/s. V Unit, Chennai (CB) vide his Voluntary Statement dated 04.05.2022 inter alia stated that Shri Moosa, Manager and Shri Anwar Sadath, owner of M/s. Surya Oil Exporters, orally instructed him to file bills of entry by mentioning description of the imported product wrongly as 'Unflavoured Supari (Betel Nut Product), so as to avail the facility of exemption under Notification No.50/2017-Cus (Sl. No. 103). During investigation it was revealed that CB generated check-list for filing bills of entry and after approval of the importer, he filed bill of entry with customs. Hence, the CB prima facie failed to comply with Regulation 10(a) of CBL....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... benefit of Notification No.50/2017-Cus dated 20.06.2017 (Sl. No. 103) and to evade payment of appropriate customs duty and also to circumvent the prohibition imposed by the Government of India on the import of Areca Nuts below the specific value, as per the Directorate of Foreign Trade (DGFT) Notification No.20/2015-2020 dated 25.07.2018. Hence, the CB prima facie failed to comply with Regulation 10(f) of CBLR, 2018. v. Regulation 10(n) mandates the CB shall verify correctness of Importer Exporter Code (IEC)number, Goods and Services Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information; However, in the instant Case it is noticed that the officers of DRI, Coimbatore visited the registered premises of M/s Surya Oil Exporters. It was found locked. Enquiries with the building owner Shri P Gopalakrishnan revealed that during August 2019 two persons viz. Shri Mohamed Ashraf Villan and Shri Anwar Sadath approached him for taking mill on rent and had executed an agreement, they had paid rent for 6 months also. Further, the building owner stated that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... goods and had also given false statements and derailed the investigation. 15.3 Further, Shri. P.M. Vinoth of M/s.V- Unit, Customs Broker only decided on the declaration made in the bill of entries with regard to the classification and description of the goods and also approved the checklist without proper approval from the importer of the goods. He agreed, after perusal of images of split pieces or areca nut in the mahazars, that the imported good appeared to be raw Areca nuts/Betel Nuts in split form and are rightly to be classified under 08028020. He has knowingly caused the mis-declaration of the goods in the bill of entry to facilitate the importer and also approved the checklist for filing Bill of Entry without the consent of the importer." 7. Appellant's contraventions of CBLR, 2018 in the Second Case (O-in-O No. 106410 / 2024 dated 07.02.2024) are narrated in paras 17 and 17.1 of the order of suspension dated 12.06.2025 as follows: - "17. Violations made by the Customs Broker in r/o CBLR, 2018in Second Case (O-in-O No. 106410/ 2024 dated 24.04.2024) The Customs Broker i.e M/s V-Unit, Chennai prima facie appears to have violated the following re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dated 24.04.2024) the CB, M/s V-Unit in their acts of omission and commission prima facie contravened the Regulations 10(a), 10(e), 10(q) and 13(12) of CBLR, 2018." 8. It appeared to the Respondent that the Appellant has prima facie violated various regulations of CBLR, 2018 viz. 10(a), 10(d), 10(e), 10(f), 10(n), 10(q) and 13(12) which led to circumvention of the prohibition imposed by the Government of India on the import of Areca Nuts below the specific value, evasion of appropriate customs duty and thereby inflicted loss to the public exchequer and if the Customs Broker is allowed to continue to operate, it would be detrimental to the interest of revenue and therefore, it is necessary to take immediate action against the Customs Broker to prevent them from further misuse of their license in terms of Regulation 16(1) of Customs Broker Licensing Regulations, 2018. Therefore, the Respondent passed Order No. 23/2025 dated 12.06.2025 wherein it was ordered interalia as under: - "In exercise of powers conferred under regulation 16(1) of the CBLR, 2018, I Order suspension of the licence No. CHN / R-538/2019-CBS and PAN: AANFV7830L of M/s. V Unit, having office address at 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lated to dispute on classification with different views held by the different authorities and that the settled position of law mandates the onus to establish the correct classification on the revenue and in any case there is no room for charging the Appellant and punishing them for any irregularity as the Appellant had followed the accepted practice of assessment after having filed the bills of entry based on import documents provided to them, including the overseas statutory country of origin certificate, which have not been held to be false or materially incorrect. 11.3 He averred that whereas regulation 17 [1] of CBLR mandates that action against the Customs Broker should be initiated only upon receipt of an "offence report" which term has been explained in CBLR, Respondent passed the impugned order without even receiving any such offence report. He submitted further that regulation 17 [1] of CBLR mandates that action should be initiated against Customs Broker within three months of receipt of the offence report and when the Respondent had cited the orders passed in 2024 which were much earlier than the three-month period mentioned in regulation 17 [1], the whole proceedings ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... nor the continued suspension order cited any reasons of immediate necessity when the facts relied upon pertained to 2022 and 2024. It is observed that the Order dated 12.06.2025 suspending Customs Broker license of the Appellant and the Order of continuation of suspension have been issued under Regulation 16(1) and 16(2) of CBLR respectively which read as under: - "Regulation 16. Suspension of license: - (1) Notwithstanding anything contained in regulation 14, the Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated: Provided that where the Principal Commissioner or Commissioner of Customs may deem fit for reasons to be recorded in writing, he may suspend the license for a specified number of Customs Stations. (2) Where a license is suspended under sub-regulation (1), the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, within fifteen days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose licens....
X X X X Extracts X X X X
X X X X Extracts X X X X
....days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the license or impose penalty requiring the said Customs Broker to submit within thirty days to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the Customs Broker desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs Broker, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, to inquire into the grounds which are not admitted by the Customs Broker. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case maybe, shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enalty as provided in regulation 18: Provided that where an order is passed against an F card holder, he shall surrender the photo identity card issued in Form F forthwith to the Deputy Commissioner of Customs or Assistant Commissioner of Customs. (9) Where in an offence report, charges have been framed against an F card holder in addition to the Customs Broker who has been issued a license under regulation 7, then procedure prescribed in regulations 16 and 17shall be followed mutatis mutandis in so far as the prescribed procedure is relevant to the F card holder: Provided that where any action is contemplated against a G card holder alone under these regulations, then instead of authority referred to in sub-regulation (8), a Deputy Commissioner or Assistant Commissioner rank officer shall pass such order as mentioned in the said sub-regulation along with debarring such G card holder from transacting the business under these regulations for a period of six months from such order. Provided further that where an order is passed against a G card holder, then he shall surrender the photo identity card issued in Form G forthwith to the Deputy Commissi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from the date of personal hearing is prescribed for passing an order of either revoking the suspension or continuing it under Regulation 16(2). (5) a time limit of ninety days from the date of receipt of an offence report by the Principal Commissioner or Commissioner of Customs is prescribed in Regulation 17 of CBLR for issuing notice to the Customs Broker for revocation of license or imposition of penalty under CBLR. In the instant case, an enquiry was contemplated against the Customs Broker under Regulation 17 of CBLR as evident from the fact that in the impugned Order No. 11/2025 dated 01.07.2025 wherein the suspension of Customs Broker License of Appellant was ordered to be continued, it was ordered that inquiry proceedings under Regulation 17 of CBLR, 2018 shall follow. Further, the order of suspension of license of Appellant is dated 12.06.2025, which is well before initiation of enquiry against the Appellant under Regulation 17 of CBLR as ordered in impugned Order No. 11/2025 dated 01.07.2025. Thus, the two conditions prescribed under CBLR for suspension of license of Appellant, viz. contemplation of an enquiry against the Appellant and the date of suspension of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....16(1) or Regulation 16(2) of CBLR. 18. Appellant has placed reliance on the decision of Hon'ble Madras High Court in the case of Santon Shipping Services [C.M.A. No. 730 of 2016 and C.M.P. No. 5921 of 2016] to contend that regulation 17 [1] mandates that action against the Customs Broker should be initiated within three months of receipt of the offence report and when the Respondent had cited the orders passed in 2024 which were much earlier than the three-month period mentioned in regulation 17 [1], the whole proceedings are void to be held ab-initio. First of all, the case of Santon Shipping Services is distinguishable as the issue there was whether the limitation prescribed under Regulation 22(1) of Custom House Licensing Regulation, 2004 (CHALR, 2004) for revocation of licence is mandatory or not and it was held that revocation of licence is without jurisdiction as the show cause notice for the same was issued beyond the mandatory period of 90 days as fixed by Regulation 20(1) of CHALR, 2004 whereas here it is an undisputed fact that the Respondent granted an opportunity of personal hearing to the Appellant within the period prescribed under Regulation 16(2) of CBLR, i.e., 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espondent dealt with classification disputes, and there is no irregularity on the part of Appellant as they had followed the accepted practice of assessment after filing bills of entry based on import documents provided to them. It is observed that the impugned order details Appellant's violation of various regulations of CBLR as evident from the findings of the Respondent which are extracted hereunder: "21.3.1 I, in the instant Case, find that Shri. P. M. Vinoth of M/s. V-Unit, Custom Broker arranged another Custom Broker M/s Lotus International Services for filing Bill of Entry for clearance by sharing the IEC, KYC and other details of importer and has himself approved the check list given by Shri Kamalakannan without the consent of the importer. The CB cannot absolve itself by claiming that the actual filing was done by another CB, when one of its partners - acting within the scope of the firm - facilitated the filing, approved the checklist, and handled post-clearance documents and invoices. 22. The CB relied upon the Order dated 08.01.2015 passed by Commissioner of Customs (Appeal-II) wherein the Order-in-Original No. 106410/2024 was set aside. 22.1 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egulations of CBLR, 2018 in an absolute negligent manner, facilitated illegal clearances of goods, failed to comply with lawful orders and repeated violations show that the CB, M/s. V Unit has exhibited conduct incompatible with the role of a licensed Customs Broker." Appellant has not even countered the above findings in the impugned order. Further in respect of order-in-original No. 104579/2023 dated 07.02.2024 relied upon by Respondent, Commissioner (Appeals) allowed the appeal of importer but rejected the appeal of Appellant herein and in respect of order-in-original No. 106410/2024 dated 24.04.2024, which is also relied upon by Respondent, even the importer's appeal was rejected by Commissioner (Appeals). Board's Instruction No. 20/2024-Customs dated 03.09.2024 cited by Appellant in support of the contention that action against Appellant is not warranted is not relevant to this case as the said instruction does not provide for exonerating the Appellant from the consequences of various violations of CBLR discussed in the impugned order. In fact, Instruction No. 20/2024-Customs dated 03.09.2024 stipulates that "as regard the suspension of licenses of Customs Brokers, Instruct....