The principle of proportionality dictates that minor violations of customs regulations may warrant suspension rather than revocation of a customs broker's license, emphasizing the importance of assessing the nature and severity of the infraction.

JUDGMENT :

Prathiba M. Singh J.

1. This hearing has been done through hybrid mode.

2. The present appeal has been filed under Section 130 of the Customs Act, 1962, inter alia, challenging the Final order dated 2^nd January, 2025 passed in Customs Appeal No. 50251/2024 (hereinafter “impugned order”) by the Customs, Excise, Service Tax Appellant Tribunal (hereinafter “CESTAT”). Vide the impugned order, the CESTAT has set aside the Order-in-Original dated 23^rd February, 2024.

3. Vide the said Order-in-Original, the customs brokers license (hereinafter “the subject license”) of Respondent - M/s Jaiswal Import Cargo Services Ltd., was suspended due to non-compliance of the Customs Brokers Licensing Regulations, 2018 (hereinafter “CBLR 2018”). The operative portion of the Order-in-Original dated 23^rd February, 2024 is extracted herein below:

“ORDER

In exercise of powers conferred in terms of Regulation 14 & 18 read with Regulation 17(7) of CBLR, 2018,

(i) I hereby revoke the CB Licence No.R- 81/DEL/CUS/2006 of M/s Jaiswal Import Cargo Services Ltd (PAN: AACCJ5444N);

(ii) I direct the CB to immediately surrender the Original CB License No. R-81/DEL/CUS/2006 along with all ‘F/G/H’ Cards in original issued there under;

(iii) I order for forfeiture of the whole amount of security deposit furnished by them under Regulation 14 read with Regulation 17 of CBLR, 2018;

(iv) I impose a penalty of Rs.50,000/- on M/s Jaiswal Import Cargo Services Ltd. (PAN:AACCJ5444N) under Regulation 18 read with Regulation 17 of CBLR, 2018.”

4. The said Order-in-Original has been set aside by CESTAT vide the impugned order. In effect, therefore, the revocation of the license of the Respondent has been set aside.

5. The allegation against the Respondent was that one M/s Tanu Trading vide Bills of Entry No. 3673416 dated 09^th December, 2022 had imported certain cosmetic items with the intention to re-export the same. However, the said goods instead of being deposited in a bonded warehouse, were in fact, diverted to the local market for home consumption.

6. Pursuant to the intelligence received by the Department in respect of the above allegations, efforts were made to locate the premises of the said importer, however its address was found to be fake and bogus. Further, the office premises of the Respondent were also searched.

7. An offence report dated 9^th May 2023 was then filed for action against the Respondent for having enabled the diversion. A Show Cause Notice (hereinafter, ‘SCN’) was then issued on 4^th September, 2023 and after the inquiry report dated 28^th November, 2023 the impugned Order-in-Original was passed on 23^rd February 2024. The Order-in-Original held that the Respondent violated the CBLR 2018.

8. These allegations were considered by the CESTAT in the impugned order which held that the KYC documents pertaining to the importer were duly verified by the Respondent. These documents were not fraudulent or fake. It was held by CESTAT that the only obligation of the Customs broker is to physically verify the premises and the verification of the Government issued documents. This has been done by the Respondent. The relevant portion of the impugned order reads as under:

“9. We find that the impugned order has also held that the appellant had violated Regulation 10(n) of the CBLR, 2018. It is an admitted fact that the appellant submitted the KYC documents pertaining to the importer such as IEC, GSTIN, Axis Bank letter regarding the AD code, copy of the PAN and Aadhar card of the proprietor Importer. There is nothing on record that these documents have been proved to be fraudulent or fake. It has been repeatedly held that there is no legal requirement of the CB to physically verify the premises and verification of the government issued documents can be verified from the portal. This has been done by the appellant. We note that the Delhi High Court in a similar case, (CUSAA No. 2/2022) and vide judgment dated 25.09.2023 in the case of D S Cargo Agency vs Commissioner of C