• Dated 30^nd July, 2026

CESTAT Sets Aside Continued Suspension of Customs Broker Licence for Non-Compliance with Regulation 16

BRIEF FACTS:

The appellant, is a licensed Customs Broker (CB). The Directorate of Revenue Intelligence (DRI), Ahmedabad, investigated the illegal import of restricted used tyre scrap by an importer through misuse of Special Import Licences (SIL). During the investigation, it was alleged that a third party had used the appellant's Customs Broker licence for clearance of the imported goods. On the basis of the DRI offence report, the Commissioner of Customs suspended the appellant's Customs Broker licence under Regulation 16 of the Customs Brokers Licensing Regulations, 2018 (CBLR), and subsequently continued the suspension pending inquiry under Regulation 17. Aggrieved by the continued suspension, the appellant preferred an appeal before the CESTAT

ASSESSEE'S CONTENTION:

The appellant contended that it had no involvement in the alleged illegal imports or over-debiting of SIL licences. It was submitted that after completion of the DRI investigation, the appellant was not made a noticee in the Customs offence Show Cause Notice, whereas other Customs Brokers allegedly involved were specifically proceeded against. This itself demonstrated the absence of any evidence implicating the appellant. It was further argued that the Commissioner mechanically continued the suspension without independently examining the evidence or recording reasons showing why immediate suspension remained necessary. Since regular inquiry proceedings under Regulation 17 had already commenced, there was no justification for continuing the suspension, which severely affected the appellant's business and the livelihood of its employees. The appellant also relied upon CBIC Instruction No. 24/2023 and several judicial precedents emphasizing that suspension under Regulation 16 is an exceptional measure and cannot be invoked routinely.

DEPARTMENT'S CONTENTION:

The Department supported the impugned order and argued that the appellant had violated various obligations prescribed under Regulations 1(4) and 10(a), 10(b), 10(d) and 10(e) of the CBLR, 2018. It was alleged that the appellant had effectively rented out its Customs Broker licence, failed to obtain proper authorization from the importer, allowed customs clearance to be handled by unauthorized persons, failed to advise its client regarding compliance with law, and neglected to exercise due diligence. According to the Department, these violations justified both the immediate suspension and its continuation pending completion of inquiry proceedings under Regulation 17.

DECISION:

The Tribunal held that Regulation 16 permits suspension of a Customs Broker licence only in appropriate cases where immediate action is genuinely necessary, and such satisfaction must be supported by recorded reasons. The Commissioner failed to demonstrate any evidence showing the appellant's direct involvement in the alleged illegal imports or to explain why immediate suspension was warranted. The Tribunal observed that the Commissioner had virtually concluded the appellant's guilt even before completion of the independent inquiry under Regulation 17. Significantly, the appellant was not made a noticee in the DRI Show Cause Notice, indicating the absence of material implicating it in the customs offence. The Tribunal also relied upon CBIC Instruction No. 24/2023, which mandates that suspension should not be exercised mechanically and requires both identification of the grounds and recording of reasons before invoking Regulation 16. Since these mandatory requirements were not satisfied, the continued suspension was held to be contrary to law. Accordingly, the impugned order was set aside, the appeal was allowed, and the Commissioner was directed to complete the Regulation 17 inquiry expeditiously while permitting the appellant to resume its business immediately

BTA's COMMENT:

This decision reiterates that suspension of a Customs Broker licence under Regulation 16 of the Customs Brokers Licensing Regulations, 2018 is an extraordinary power that can be exercised only upon recording cogent reasons demonstrating the necessity for immediate action. Mere allegations or pendency of an investigation are insufficient to justify suspension. The ruling reinforces the principles of natural justice and procedural fairness by emphasizing that licensing authorities must rely on tangible evidence rather than presumptions or mechanical reasoning before curtailing the right of a Customs Broker to carry on business.

Case Reference- Hirannya Shipping and Logistics Services v. Commissioner of Customs (General), Mumbai, (2026) 44 Centax 247 (Tri.-Bom.)

Author- Madhurima Bose