No Right To Reinstatement Of Customs Broker License After Breach Of Trust With Customs Department: Kerala High Court

Justices A.K. Jayasankaran Nambiar and P.M. Manoj stated that “…..the relationship between the Customs Department and the Customs Broker appointed in terms of the Regulations is essentially one of trust. Once that trust is broken, and the Customs Broker ceases to inspire the confidence of the Customs Department in relation to his functioning, he loses the right to seek a reinstatement of his license under the Regulations.”

The assessee/appellant was a Customs Broker and holder of license No.102 issued by the Commissioner of Customs under Regulation 7 of the Customs Broker Licensing Regulation [CBLR], 2013.

An inspection was conducted by the Officers of the Preventive Department of the Cochin Commissionerate, and a quantity of 30.245 kgs. of gold was seized from the consignment declared as Diplomatic Cargo.

A show cause notice was served on the assessee under Regulation 17(1) of the CBLR, 2018. The assessee was directed to show cause as to why its customs broker license should not be revoked under Rule 14 of the CBLR, 2018 on account of violation under Regulation 10(a), (d), (e), (m) and (n) respectively and penalty should not be imposed on the assessee under Regulation 18 of the CBLR, 2018.

The Commissioner, however, rejected the explanation offered by the assessee and confirmed the proposals in the show cause notice. The Commissioner revoked the customs brokers license issued to the assessee with immediate effect, and imposed penalty under Regulation 14 read with 18(1) of the CBLR, 2018. The Commissioner also directed a forfeiture of the entire amount of security deposit that had been paid by the assessee.

Aggrieved by the order of the Commissioner, the assessee preferred the appeal before the CESTAT which was dismissed.

The bench agreed with the Appellate Tribunal and stated that “as per the Regulations, the appellant was entitled to receive only those documents, that were mentioned in the show cause notice and the enquiry report that was drawn up by the Enquiry Officer during the adjudication proceedings before the Commissioner. Since it is not in dispute that the appellant received both the show cause notice and the enquiry report and that he was afforded an opportunity of filing representations against both, we fail to see how the appellant can sustain a contention regarding violation of natural justice.”

The bench after observing that the instances of breach of the Regulations, coupled with the fact that the recent instances where a breach was occasioned, were in connection with the smuggling of huge quantities of gold, denied to interfere with the order of the Tribunal that upholds the revocation of the license of the assessee.

In view of the above, the bench dismissed the appeal.

Case Title: M/s Cappithan Agencies v. Commissioner of Customs

Case Number: CUS. APPEAL.NO.1 OF 2024

Citation: 2025 LiveLaw (Ker) 378

Counsel for Appellant/ Assessee: M.A. Baby

Counsel for Respondent/ Department: P.R. Sreejith and R. Harishankar

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