$~69 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 18^th March, 2025 + CUSAA 50/2025 & CM APPL. 13232/2025 COMMISSIONER OF CUSTOMS (AIRPORT AND GENERAL) .....Appellant Through: Ms. Anushree Narain, SSC with Mr.

Ankit Kumar, Adv.

versus FLYOVER CARGO PVT. LTD. .....Respondent Through: Mr. Prachit Mahajan, Adv.

CORAM:

JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

CM APPL. 13232/2025 (for exemption)

2. Allowed, subject to all just exceptions. Application is disposed of.

CUSAA 50/2025

3. The present appeal has been filed by the Appellant-Customs Department under Section 130 of the Customs Act, 1962 challenging the impugned order passed by the Customs, Excise & Service Tax Appellate Tribunal (‘CESTAT’) in Custom Appeal No.55467/2023 dated 24th July, 2023.

4. The brief background is that the Respondent - M/s Flyover Cargo Pvt. Ltd. is a Customs House Agent (‘CHA’) who has been issued a Show Cause Notice dated 6th February, 2023 in respect of export of a consignment which included 500 ml of Triethanolamine. According to the CHA, the said chemical was being exported by its client (‘exporter’) for the purpose of soil Signature Not Verified testing in a sugar factory. The destination consignee was M/s Pure Diets, Mozambique, South Africa. The Department noted that the chemical was one of the Specialised Chemicals, Organisms, Machinery, Equipment, and Technology (‘SCOMET’) items and it was capable of being used as a weapon of mass destruction apart from having industrial use as well. Thus, an export authorization is required from the Directorate General of Foreign Trade (‘DGFT’) prior to the export of the said product. However, the said DGFT authorization was not obtained and the product was, according to the Department, misclassified by the Exporter and CHA.

5. Accordingly, a Show Cause Notice dated 6^th February, 2023 was issued upon the CHA and a personal hearing was also granted. Thereafter, the impugned Order-in-Original (‘OIO’) came to be passed on 24th July, 2024.

6. The impugned OIO clearly records that the CHA ought to have properly described the product and advised the client to comply with the requisite approvals and authorizations. The adjudicating authority found the CHA’s conduct being contrary to the responsibilities affixed on CHAs. The relevant part of the Order-in-Original dated 26^th July, 2023 reads:

“17. I have carefully gone through the Show Cause Notice No. 02/ZR/Policy/2023 dated 06.02.2023, Inquiry report dated 03.05.2023 submitted by Shri Sanjay Pandey, Deputy Commissioner, Custom Audit, New Custom House, New Delhi (Inquiry officer), Written Submissions dated 24.05.2023 (received in this office on 29.05.2023) of the CB & submissions during P.H. on 05.07.2023 and available records.

18. For sake of brevity, facts of the case are not being reproduced here again, therefore, I, now proceed to discuss the alleged violations of Regulations of CBLR, 2018 made by the Customs Broker as under:

Signature Not Verified

18.1 Whereas, as per Regulation 10(d) of the CBLR, 2018:-

"10. Obligations of Customs Broker. - A Customs Broker shall-

… … …”.

(d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, 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;

… … …”

18.1.1 On going through the above regulation, it is clear that the Customs Broker has to advise his client i.e. the importer to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs. However, I find that the Inquiry Officer has observed that M/s Fly Over Cargo Pvt. Ltd. failed to advise his client i.e. the exporter about the restrictive nat