CESTAT Restores Custom Broker's Licence After Finding Revocation Based On Statements Not Admitted As Evidence

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at New Delhi has set aside the revocation of a customs broker licence granted to Global Links. The tribunal held that, on the facts of the case, the action could not be sustained, as it was based only on statements that were never admitted as evidence.

A coram comprising President Justice Dilip Gupta and Technical Member P. V. Subba Rao found that the adjudicating authority relied on statements recorded during the investigation without following the procedure prescribed under the Customs Act as well as Customs Broker Licensing Regulations, 2018

"Since the Commissioner did not admit the statements as evidence, they also are not relevant and cannot be relied upon in these proceedings. Therefore, the finding that the appellant had violated Regulations 10(d) and 10(e) cannot be sustained,” the tribunal observed.

Global Links is a Delhi-based customs broker licensed under the Customs Broker Licensing Regulations, 2018. The proceedings arose after consignments cleared at the Mumbai port for two importers were intercepted by customs authorities. On examination, the goods were found to be mis-declared in description, quantity, and value.

Undeclared items were also detected. The imports were further found to be in violation of Bureau of Indian Standards requirements, Legal Metrology provisions, and the RE-44 notification relating to packing material.

While action was initiated against the importers, offence reports were also issued against Global Links. Its licence was first suspended and later revoked. A penalty of Rs 50,000 was imposed. The entire security deposit was forfeited.

Before the tribunal, Global Links argued that all findings against it were based solely on statements of the importers recorded under Section 108 of the Customs Act. It contended that these statements could not be relied upon, as the safeguards under Section 138B were not followed. The customs department alleged that the broker had failed to advise its clients, exercise due diligence, supervise employees, and ensure efficient clearance.

The tribunal rejected this approach. It said a customs broker cannot be blamed merely because an importer mis-declared goods.

“The mere fact that the importer had mis-declared the nature of the goods, quantity, value and had imported some goods which it did not declare cannot be held against the appellant,” the tribunal said.

It added that a customs broker has no authority to examine imported goods, which remain in the custody of the custodian until examined by customs officers.

The tribunal noted that the commissioner neither examined the importers as witnesses nor formally admitted their statements as evidence. It also recorded that the statements were not even relied upon in the show cause notice. On this basis, it held that none of the alleged violations of the licensing regulations were proved.

The tribunal accordingly set aside the revocation order and allowed the appeal, granting consequential relief to Global Links.

For Appellant: Advocates Prabhat Kumar and Karan Kanwal

For Respondents: Advocates Girijesh Kumar