TaxTMI 
TaxTMI 
2026 (10) TMI 150
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....Nos. 53899 and 53901of 2025, W.P No. 30925 of 2025 And WMP.Nos. 34630 and 34631 of 2025, W.P No. 30927 of 2025 And WMP.Nos. 34634 and 34638 of 2025, W.P No. 30092 of 2025 And WMP.Nos. 33734 and 33737 of 2025, W.P No. 2294 of 2026 And WMP.Nos. 2542 and 2544 of 2026 Hon'ble Mr. Justice Hemant Chandangoudar For the Petitioner : Mr. S. Baskaran, Mr. Hari Radhakrishnan And Others For the Respondent : Mr.K.S.Ramaswamy, SSC, M/s. Pooja Jain Jr.SPC And Others COMMON ORDER The present batch of writ petitions challenges the orders passed by the respective Commissioners of Customs under Regulation 16(1) and, in some cases, Regulation 16(2) of the Customs Brokers Licensing Regulations, 2018 (hereinafter referred to as "the CBLR, 2018"), whereby the licences of the petitioners, who are Customs Brokers, have been suspended or the suspension has been continued. 2. Since the principal issue in all these writ petitions concerns the power of immediate suspension under Regulation 16 of the CBLR, 2018, the writ petitions were heard together and are disposed of by this common order. Submissions of the petitioners: 3. Learned counsel appearing for the petitioners submitted th....
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....e role of the Customs Broker and other persons. Until sufficient material is collected, the licensing authority may not have adequate material to form the prima facie satisfaction required for exercising the power under Regulation 16(1). 10. According to the respondents, where an offence report is submitted by another Customs formation or an investigating authority, the relevant date for considering the requirement of immediate action is the date on which the competent licensing authority receives the offence report and the material relied upon therein. If the Commissioner acts promptly thereafter, the requirement of immediate action is satisfied. 11. It was further submitted that the cases under consideration involve serious allegations relating to smuggling of gold, cigarettes and narcotic substances, attempted export of prohibited meat, misdeclaration, undervaluation, use of dummy IECs and other violations. According to the respondents, permitting such Customs Brokers to continue their operations during the investigation may prejudice the interests of revenue and the proper administration of Customs law. Discussion: 12. Before considering the individual cases, it is ....
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....ate action must be necessary; and (iii) an enquiry against the Customs Broker must be pending or contemplated. 19. Regulation 16(2) provides a safeguard to the Customs Broker whose licence is suspended under Regulation 16(1). The Customs Broker is required to be given an opportunity of hearing within fifteen days from the date of suspension and the question of continuation of the suspension has thereafter to be considered. 20. A comparison of the CHALR, 2004, the CBLR, 2013 and the CBLR, 2018 therefore shows that the power of immediate suspension has remained substantially the same. Throughout the three Regulations, immediate suspension is an exceptional and preventive power. The mere pendency or contemplation of an enquiry does not, by itself, justify suspension. The Department must also establish that immediate action is necessary. 21. The power under Regulation 16(1) is therefore an exceptional power and is not an ordinary disciplinary power. It is intended to deal with situations where allowing the Customs Broker to continue its operations during the pendency of the enquiry may prejudice the interests of revenue or the proper administration of the Customs law.....
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....ediate suspension within fifteen days of receipt of the report. 29. The Circular, therefore, provides guidance to the authorities in exercising the power of immediate suspension. However, Regulation 16 of the CBLR, 2018 itself does not prescribe a fixed period of limitation within which a suspension order must necessarily be passed. 30. The timelines prescribed in the Circular must ordinarily be respected. However, a reasonable deviation from those timelines cannot, in every case, result in automatic invalidation of the suspension. It must be examined whether the delay, in the facts of the particular case, is such as to demonstrate the absence of the statutory requirement of immediate action. 31. The subsequent Instruction No.24/2023-Customs dated 18.07.2023 requires the Commissioner of Customs to record reasons as to why the case is considered to be an appropriate case in which immediate action by way of suspension is necessary. 32. Thus, the requirement of recording reasons assumes significance because Regulation 16(1) does not permit suspension merely because an enquiry is pending or contemplated. The competent authority must apply its mind to the material available ....
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....pension order. 40. In Krishna Shipping and Allied Services v. Commissioner of Customs, Kandla, (2024) 19 Centax 321 (Tri.-Ahmd.), the Tribunal considered the timelines prescribed by Circular No.9/2010-Customs and held that the Circular continued to guide the exercise of the power of suspension. 41. On the other hand, in Orient Clearing & Forwarding Agency v. Union of India, 2000 SCC OnLine Cal 731, the Calcutta High Court held that the expression "immediate" does not necessarily mean that the action must follow instantaneously and that the authority could take action during the pendency of an enquiry when the circumstances so warranted. 42. Similarly, in Sabin Logistics Pvt. Ltd. v. Commissioner of Customs, W.P.No.9395 of 2018, dated 09.07.2018, this Court found no infirmity where the suspension order was passed shortly after receipt of the offence report. 43. In M/s. Blessing Cargo Care Pvt. Ltd. v. Commissioner of Customs, W.P.No.27359 of 2017, dated 08.12.2017, this Court held that the expression "immediate" has to be understood in the context of the statutory scheme. On the facts of that case, the period taken by the authorities to complete the investigation did not....
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.... consider the nature of the offence, the complexity of the investigation, when the relevant material became available, and the time taken thereafter to pass the suspension order. iv. The timelines in the Circular are relevant and binding on the Department. They indicate the time within which the Department is expected to complete the investigation and take action. v. Some reasonable delay may be justified. Particularly in a complex investigation, but any substantial delay must be properly explained. vi. The change from CHALR, 2004 to CBLR, 2018 does not by itself make the Circular inapplicable. It continues to apply unless it has been withdrawn, superseded, or is inconsistent with the CBLR, 2018. vii. The ultimate question is whether immediate suspension was necessary when the order was passed. If the delay is substantial and unexplained, it may show that the requirement of immediate action under Regulation 16(1) was not satisfied. 50. In the present batch of cases, this Court is not called upon to examine the correctness of the allegations against the petitioners or to decide whether the petitioners committed the alleged violations. This Cour....
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.... the impugned order is set aside. 52.2. W.P.Nos.21646 and 21649 of 2024 - M/s. Aala Shipping Services Pvt. Ltd. In these cases, the goods were seized on 22.10.2021. The date of the offence report and the date of its receipt by the licensing authority are not stated. However, the order of suspension under Regulation 16(1) was passed on 24.05.2022 and the order under Regulation 16(2) was passed on 15.06.2022. Thus, the suspension order was passed more than 250 days after the date of the offence. The allegations relate to an import-cum-consignment declared to contain circular saws, dust and vacuum cleaners, in which 4,001 foreign-origin gold pieces valued at approximately Rs. 1.97 crore were allegedly found. The Department relies upon the statement of Mr. P. Arukumar, Director of the Customs Broker, recorded under Section 108 of the Customs Act on 23.10.2021. According to the statement, he was aware of the gold consignment and agreed to undertake its clearance for a higher consideration. The Department also relies upon subsequent statements and bank records. It is further stated that substantial amounts were credited by the importers to the Customs Broker's account, ....
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....iod prescribed under the Circular, which is binding on the Department, and after 275 days from the date of detection of the offence, the order cannot be sustained. The contention of the respondent that the enquiry for revocation of the licence under Regulation 17 was already pending and that the suspension under Regulation 16(1) was therefore passed during the pendency of such enquiry, and hence there was no delay, cannot be accepted. The power under Regulation 16(1) is an exceptional power intended to meet cases where immediate action is necessary. In the present case, the suspension order was passed 275 days after the alleged offence and 20 days after receipt of the offence report. During this period, the Customs Broker was already facing an enquiry for revocation under Regulation 17. The respondent has not explained what changed during these 20 days after receipt of the offence report so as to make immediate suspension necessary. When the regular enquiry under Regulation 17 was already in progress, and no fresh or intervening circumstance requiring immediate suspension has been shown, the mere pendency of that enquiry cannot, by itself, justify resort to Regulation 16(1). ....
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....e offence report along with the relied-upon documents was received on 05.02.2026. The impugned order under Regulation 16(1) was passed on 10.04.2026, nearly four years after the date of the offence. The impugned order states that if the Customs Broker is allowed to continue its operations, it would be detrimental to public interest, as it may lead to further violations and increase the risk of misuse of the Customs clearance system for unlawful activities. It is further stated that, in cases involving controlled substances regulated under the NDPS Act, 1985, such negligence assumes greater gravity as it directly impacts public health, safety and national security, and therefore immediate action against the Customs Broker is necessary. Therefore, as the impugned order suspending the petitioner's licence under Regulation 16(1) of the CBLR, 2018 was passed beyond the 15-day period prescribed under the Circular, which is binding on the Department, and after four years days from the date of detection of the offence, the order cannot be sustained. Accordingly, the impugned order is set aside. 52.6. W.P.No.29810 of 2025 - M/s. Dev Cargo Logistics. The allegations concern....
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....es. It is alleged that these acts facilitated the attempted clearance of a grossly mis declared consignment connected with an organised smuggling arrangement. The offence report is dated 08.12.2025 and the subsequent show-cause notice dated 12.12.2025 was received by the Customs Broker licensing authority on 12.12.2025. The allegation relates to a consignment of cigarettes imported under a Bill of Entry dated 03.12.2024, which had been declared as chemical Bitumen. The impugned order under Regulation 16(1) was passed on 19.01.2026, i.e., more than 35 days after receipt of the offence report. The impugned order states that there is a reasonable apprehension that the Customs Broker may continue to adopt similar irregular and non-compliant practices in future, thereby posing a risk to the orderly functioning of the Customs clearance system. It further states that allowing the Customs Broker to continue its operations would be prejudicial to the interests of revenue and detrimental to the integrity of Customs procedures. Since the impugned order was not passed within 15 days as prescribed under the Circular, it does not satisfy the requirement of Regulation 16(1), which ....
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.... IGST refund was thereafter claimed. In the second case, the allegations concern reliance upon an alleged third party, use of a purportedly false authorisation, filing of documents without direct contact with the importer, failure to verify KYC particulars and failure to cooperate during examination of the goods. The authority has also relied upon the statement of the Customs Broker's manager regarding the manner in which the transactions were handled. Based on the NCTC alert dated 23.01.2024, an investigation was initiated and conducted in respect of two shipping bills, both dated 14.08.2024, filed by the Customs Broker on behalf of the exporter. Two offence reports were received by the Customs Broker licensing authority. The first, in the form of a show-cause notice dated 14.10.2025, was received on 22.01.2026. The second, in the form of a letter dated 28.01.2026, was received on 29.01.2026. The order of suspension under Regulation 16(1) was passed on 02.03.2026 and the impugned order under Regulation 16(2), continuing the suspension, was passed on 30.03.2026. In the impugned order, it is stated that allowing the Customs Broker to operate would be detrimental to....
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....ustoms Broker in facilitating such transactions. The authority has rejected the contention that production of authorisation letters and KYC documents, by itself, establishes compliance with Regulations 10(a) and 10(n). A search was conducted on 19.06.2025 at the business premises owned by Shri Ajaykumar Gupta, who was suspected to be a hawala operator and alleged to be sending funds to China/Hong Kong through his hawala network. The statement of P. Hari, G-card holder, was recorded under Section 108 of the Customs Act, 1962. The offence report along with the relied-upon documents was received by the Customs Broker licensing authority on 19.03.2026 in the form of a show cause notice dated 18.03.2026 in respect of the petitioner agency. The order of suspension under Regulation 16(1) was passed on 15.04.2026 and the impugned order under Regulation 16(2) was passed on 08.05.2026. Thus, the order under Regulation 16(1) was passed nearly ten months after the search of the premises of Shri Ajaykumar Gupta and his brother Alok Gupta, and more than eight months after the recording of the statement of the petitioner under Section 108 of the Customs Act. In the impugned order, ....