Order quashed as notice failed to state allegations relating to violation of regulation by Customs Broker

Uniclear Logistics Pvt Ltd Vs Commissioner of Customs Airport & General (CESTAT Delhi)

CESTAT Delhi sets aside the order on sole reason that show cause notice doesn’t even state the allegations in respect of violation of four regulations under CBLR 2013 by customs broker. Thus, order quashed as notice is absolutely vague.

Facts- The appellant, M/s. Uniclear Logistics Pvt. Ltd., has challenged the order dated 27.10.2023 passed by the Commissioner of Customs (Airport & General), New Delhi revoking the Customs Broker License issued to the appellant and directing forfeiture of the security deposit and also imposing penalty of Rs. 50,000/-.

Conclusion- The impugned order should be set aside for this sole reason, as the show cause notice does not even state the allegations in respect of violation of the four regulations under the 2013 Regulations.

Held that the impugned order passed by the Commissioner deserves to be set aside for the sole reason that the show cause notice, which is the foundation of the order, is absolutely vague and does not even state the allegations in respect of the four violations.

FULL TEXT OF THE CESTAT DELHI ORDER

The order dated 27.10.2023 passed by the Commissioner of Customs (Airport & General), New Delhi¹ revoking the Customs Broker License issued to the appellant and directing forfeiture of the security deposit and also imposing penalty of Rs. 50,000/- has been assailed in this appeal that has been filed by M/s. Uniclear Logistics Pvt Ltd.²

2. This order dated 27.10.2023 seeks to adjudicate the show cause notice dated 11.05.2023 that was issued to the appellant.

3. The second paragraph of the show cause notice refers to the order dated 28.02.2023 passed by the Additional Commissioner of Customs, Air Cargo Export, New Customs House, New Delhi that was received in the office on 13.03.2023.

4. Paragraph 3 of the show cause notice deals with the aforesaid order dated 28.02.2023 and reproduces the order from internal page no. 1 of the show cause notice upto internal page no. 168.

5. Paragraph 3 of the show cause notice is followed by paragraph 4 which is as follows:

“4. Whereas from the above, it appears that the CB has violated the following regulations of CBLR 2013 for the reason narrated in preceding paras:-

Regulation 11(a): obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;

Regulation 11(d): advise his client to comply with the provisions of the Act and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be;

Regulation 11(e): exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;

Regulation 11(n): verify antecedent, correctness of Importer Exporter Code (IEC) number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information;”

6. Paragraph 5 of the show cause notice then proceeds to state that from the above it appears that the appellant is found to be contravening the provisions of regulations 11(a), 11(d), 11(e) and 11(n) of the Customs Brokers Licensing Regulations 2013³ for the reasons narrated in the preceding paragraphs. It, therefore, calls upon the appellant to join the proceedings before the enquiry officer and the enquiry officer was required to submit his report within 90 days from the date of issuance of the show cause notice.

7. It clearly transpires that the show cause notice does not even make an attempt to state the allegations concerning the four regulations that have been alleged to be violated. It has been left to the wisdom of the appellant to decipher from the order reproduced in paragraph 3 of the show cause notice as to what are the allegations that can be culled out against the appellant in respect of the four alleged violations of the 2013 Regulations.

8. It was imperative for the officer issuing the show cause notice to precisely spell out the allegations pertaining to the regulations of which violation has been alleged.

9. There is, therefore, substance in the submission advanced by Shri B. Bhushan, learned counsel appearing for the appellant that the impugned order should be set aside for this sole reason, as the show cause notice does not even state the allegations in respect of violation of the four regulations under the 2013 Regulations..

10. The impugned order passed by the Commissioner deserves to be set aside for the sole reason that the show cause notice, which is the foundation of the order, is absolutely vague and does not even state the allegations in respect of the four violations.

11. In such circumstances, the impugned order dated 27.10.2023 passed by the Commissioner of Customs deserves to be set aside and is set aside. The appeal is, accordingly, allowed.

(Dictated and pronounced in open court)

Notes:

¹ the Commissioner of Customs

² the appellant

³ the 2018 Regulations