TaxTMI 
TaxTMI 
2026 (3) TMI 447
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....ms Broker under Regulation 7(1) ibid, until completion of pending inquiry proceedings under Regulation 17 ibid. This order is the result of action initiated by the learned Commissioner of Customs (General), Mumbai as a licensing authority under the CBLR, consequent to 'offence report' in letter F. No. DRI/ AZU/CI-1/ENQ62(INT-25)/2025 dated 04.07.2025 received from the Additional Director, Directorate of Revenue Intelligence, Ahmedabad Zonal Unit (DRI-AZU). In the said offence report it is stated that an importer M/s Shabir and Sons Eco Exim Private Limited, Vadodara had, vide Bill of Entry (B/E) Nos. 2383298 dated 30.05.2025 and 2402654 dated 31.05.2025 filed in JNCH, Nhava Sheva seaport and in earlier 11 past cases, imported "Used Tyre Scrap" which are restricted for import in terms of the Foreign Trade Policy ITC-HS, by misusing the license issued by the Directorate General of Foreign Trade (DGFT) for import of '10-mesh rubber crumb/tyre scrap'. Further, it is reported that Special Import License (SIL) issued for a specified quantity and value mentioned therein, was debited for higher value/quantity, for which the importer is not entitled to. Since the appellants CB is one of the....
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....aborating the same further, he stated that since they have been made as party/noticee to the show cause proceedings vide Show Cause Notice (SCN) dated 15.12.2025 issued against the importer and the CBs who had handled such imports, only upon the outcome of the same, further action could be initiated in respect of such allegations. He further submitted that this crucial evidence in support of the appellants have not been considered by the learned Commissioner, and the suspension of the CB license have been carried out in a mechanical manner. Therefore he pleaded that the impugned order arising from such non-application of mind, is liable to be dismissed. 3.2 He further submitted that since the regular inquiry proceedings have been initiated against the appellants CB vide SCN dated 18.12.2025, all the alleged violations are being duly examined in terms of the Regulation 17 of CBLR and therefore there is no necessity for continuing the immediate suspension during the pendency of such inquiry proceedings, as it affects the continuance of the appellants CB business and had adversely impacted the livelihood of their employees. In this regard, he relied upon the instructions issued by ....
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....gations that a Customs Broker is expected to fulfill during their transaction with Customs in connection with import and export of goods. Further, Regulations 16 & 17 ibid provide the procedure to be followed by the licensing authority is immediate suspension and regular suspension proceedings. These regulations are extracted and given below as follows: "Regulation 1. Short title, commencement and application: - (1) These regulations may be called the Customs Brokers Licensing Regulations, 2018. (4) Every license granted or renewed under these regulations shall be deemed to have been granted or renewed in favour of the licensee, and no license shall be sold or otherwise transferred. Regulation 10. Obligations of Customs Broker: - A Customs Broker shall - (a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; (b) transact business in the Customs Station either personally or through an authorized ....
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....ten statement of defense 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 of the proceedings, and he may also put any question to any person tendering evidence for or against the Customs Broker, for the purpose of ascertaining the correct position. (4) The Customs Broker shall be entitled to cross-examine the persons examined in support of the grounds forming t....
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....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 Commissioner of Customs or Assistant Commissioner of Customs. Explanation . - Offence report for the purposes of this regulation means a summary of investigation and prima facie framing of charges into the allegation of acts of commission or omission of the Customs Broker or a F card holder or a ....
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....m action has been proposed under CBLR (ii) On the basis of written reply submitted by the CB, determine the grounds which have been accepted by him and those which have not been admitted by the CB, and appoint an Inquiry Officer to inquire into such grounds which are not admitted (iii) Inquiry officer to take into account all necessary evidence, oral or documentary for ascertaining the correct position (iv) opportunity for cross-examination of the persons examined in support of the evidence against the CB (v) Preparation of the inquiry report containing the findings of the inquiry officer (vi) Obtaining written representation from the CB, if he wish to submit any grounds against the inquiry report (vii) Principal Commissioner of Customs to consider the inquiry report, CB's representation and provide an opportunity of personal hearing before passing an adjudication order on the inquiry proceedings (viii) Specific penalties against 'F' card holder, if case the Commissioner comes to a conclusion for such imposition, duly following the procedure as above. The specific sub-regulation (7) of Regulation 17 ibid, provides th....
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....e is no justification given by the learned Commissioner of Customs in the impugned order for invoking the provisions of immediate suspension and its continuation, for an alleged act done by the importer in over-debiting the SIL licenses held by him, through mis-declaration of the goods. Since, the past eleven consignments have been cleared at the same port, prior to the interception of two live consignments, it cannot be said that the appellants in collusion with importer had done such act, particularly when the appellants had least role to play in such clearances as evidenced in the SCN issued to such importer vide SCN dated 15.12.2025. Therefore, we are of the considered view, that there are no specific grounds to evidentially prove that immediate suspension of the appellants CB license is required as an appropriate case, for initiating action under Regulation 16 of CBLR, 2018. 7.7 In this regard, we find that Central Board of Indirect Taxes and Customs (CBIC) had issued certain instructions to all the Chief Commissioners/ Commissioners of Customs about the various references received about suspension of CB licenses being resorted to by the licensing authorities even in cases ....
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.... is to be kept in view by the Commissioner of Customs in the course of considering a proposal to suspend the licence of a customs broker. Before doing so, the Commissioner should also take the care also of recording his/her reasons as to why it is considered an appropriate case where immediate action of suspension is necessary." Plain reading of above instructions reveals that there is twin requirement of appropriateness of the case, as such action is not contemplated in every case. These are (i) the grounds for invoking immediate suspension action should be indicated so as to demonstrate that it is not an exercise undertaken in a mechanical or routine manner; and (ii) that the reasons for such immediate suspension should be recorded. These are to be fulfilled for taking action on immediate suspension of CB license under Regulation 16 of CBLR, 2018. From the facts of the case, it is clear that there is no ground or evidence produced by the department to implicate the appellants CB in misdeclaration of import goods and in over-debiting of SIL licenses. In fact, even in the proceedings initiated for the customs offences against the importer, the appellants CB ....