CESTAT Chandigarh Restores Customs Broker Licence Over Violation Of Regulatory Timelines

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Chandigarh has set aside the suspension of a customs broker's licence after finding that the authorities themselves failed to follow the timelines laid down under the Customs Broker Licensing Regulations, 2018. Calling the delay fatal, the tribunal directed that the licence be restored within four weeks.

A coram of Judicial Member Justice S S Garg and Technical Member P Anjani Kumar said the time limits under the regulations could not be brushed aside.

Emphasing the same, the tribunal observed, “Each timeline is sacrosanct, and the idea of prescribing a time limit by statute becomes redundant if not adhered to.”

The case centred on a customs broker whose licence was put under suspension by the Commissioner of Customs, Ludhiana, over allegations linked to an import consignment. The Department of Revenue Intelligence alleged that dry dates had been brought into the country but shown on paper as light melting scrap, and that the broker had a role in facilitating the misdeclaration. On February 5, 2021, the DRI moved to suspend the licence under Regulation 16 of the CBLR, 2018, and later kept the suspension in place.

The broker challenged the action, not by disputing the allegations at that stage, but by pointing to how the proceedings were handled after the suspension.

He argued that the authorities missed key deadlines under the regulations He alleged that the authorities missed several timelines including the time limits for personal hearings and for issuing a show cause notice proposing revocation of the licence.

The DRI, however defended the suspension by highlighting the seriousness of the alleged violations. It accused the broker of failing to verify the credentials of importers, enabling misdeclaration, ignoring regulatory duties, and not cooperating during the investigation

The Department also said the delays were not deliberate, explaining that extensions of limitation granted by the Supreme Court of India during the COVID-19 pandemic had disrupted timelines. Given the nature of the allegations, it argued, strict action was necessary.

The tribunal disagreed. It said the regulations left no room for flexibility when it came to timelines and that failure to follow them would vitiate the entire process. The coram observed that authorities could not accuse a customs broker of breaching regulations while themselves ignoring the same rules. It also took note of the fact that the broker had been without a licence for more than three years, a period long enough to affect not just his own livelihood but also that of those working under him.

In view of this, the tribunal set aside the suspension and directed the authorities to restore the customs broker's licence within four weeks.

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