CESTAT Mumbai Sets Aside Revocation of Customs Broker License

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench has allowed the appeal filed by M/s M D Ruparel & Sons, setting aside the revocation of their customs broker license, forfeiture of security deposit, and penalty of ₹50,000 imposed by the Principal Commissioner of Customs (General), Mumbai.

Background:

M/s M D Ruparel & Sons held Customs Broker License No. 11/244.
They were accused of forging factory stuffing permissions to assist exporters in illegitimately claiming drawback benefits totaling ₹49.56 crores on goods declared at ₹543.58 crores.
Proceedings were initiated under Regulations 10(a), 10(d), and 10(n) of the Customs Broker Licensing Regulations (CBLR), 2018.
Despite the enquiry officer exonerating the customs broker, the Principal Commissioner issued a disagreement memo, held them guilty under two charges, and passed punitive orders.

Tribunal’s Observations:

The proceedings were riddled with procedural lapses and excessive delays:
- Show cause notice issued beyond 90 days of offence report receipt.
- Enquiry report submitted late—beyond the 90-day deadline post SCN.
- Final order also delayed beyond 90 days from enquiry report.
Tribunal cited the Bombay High Court’s ruling in Unison Clearing Pvt. Ltd. [2018 (361) ELT 321 (Bom)], emphasizing that timelines under Regulation 17/CBLR are mandatory unless delay is justified.
The impugned order lacked any findings attributing delay to the customs broker.
No justification provided by the revenue for failure to adhere to procedural timelines.

Key Legal Principles Reaffirmed:

Timelines in CBLR proceedings are deemed mandatory, not directory, when delay is unjustified and unexplained.
The burden lies on the licensing authority to record reasons for delay.
Citing the AB Paul & Co. ruling, the Tribunal reiterated that delay cannot be condoned without substantiated justification.

Final Verdict:

The Tribunal set aside the revocation of license, forfeiture of security deposit, and penalty of ₹50,000.
The appeal filed by M/s M D Ruparel & Sons was allowed in full.

Significance:

Reinforces the importance of procedural fairness and adherence to statutory timelines under CBLR.
Protects customs brokers from arbitrary punitive action arising from departmental delay.
Offers a precedent for similar appeals where timelines have not been respected.

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Source: CESTAT Mumbai

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