2026 (3) TMI 420

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....deposit and recovery of penalty has been assailed in this appeal. 2. It transpires from the records that a show cause notice dated 10.09.2024 was issued to the appellant alleging violation of the provisions of regulations 10 (a), (d), (e) and (n) of the Customs Broker License Regulation 2018 [the 2018 Regulations] 3. An Inquiry Officer was appointed to inquire into the allegations. The Inquiry Officer submitted a detailed report dated 06.12.2024 to the Commissioner of Customs concluding that the contravention of regulations 10(a), 10(d), 10(e) and 10(n) of the 2018 Regulations could not be proved against the appellant. The Commissioner has in the impugned order disagreed with the findings recorded by the Inquiry Officer and has held t....

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....erence in this appeal. 6. The submissions advanced by the learned counsel for the appellant and learned authorized representative appearing for the department have been considered. 7. The sole issue that arises for consideration in this appeal is whether it was open to the Commissioner to disagree with the findings recorded by the Inquiry Officer without providing reasons to the appellant for such disagreement and further providing an opportunity to the appellant to reply. Absence of any notice to the appellant would result in violation of well established principles of natural justice. 8. This precise issue was examined by the Delhi High Court in "Him Logistics". It was held that though the Principal Commissioner is not bound to a....

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....natural justice require that the said material/reasons must be communicated to the agent to enable the agent to rebut, qualify or explain the same and to show cause against the proposed adverse action. In the absence of communication of adverse material/reasons, the Customs Broker would not be aware of the proposed adverse action and would not be able to show cause against the same and there would be failure of compliance with the principles of natural justice, as envisaged by Regulation 20 of CBLR, 2013. 16. In the present case, the inquiry report is in favour of the petitioner and exonerates him. Mere communication of the inquiry report, which is in favour of the petitioner and without communication of adverse material and/or rea....