Legal principle

Where oral evidence is sought to be relied upon in an inquiry under Regulation 17 of the CBLR, the Customs Broker must be afforded the corresponding right of cross-examination under Regulation 17(4), but a procedural error in the inquiry warrants only a remand for fresh adjudication, not outright quashing of the proceedings.

Court decision

The appeal was dismissed and the CESTAT's remand order was upheld: the inquiry suffered from a procedural infirmity because the Inquiry Officer relied on investigation statements without examining the witnesses, entitling the Customs Broker to cross-examination under Regulation 17(4); the correct consequence was a remand for fresh adjudication, not outright setting aside of the proceedings; pending applications were closed.

Facts

The Appellant, M/s Vogue Logistics Pvt. Ltd., is a Customs Broker licensed under the CBLR, 2018. An investigation initiated on 14.12.2021 against M/s Disha Enterprises concerned an alleged attempt to export diamonds (worth approximately Rs.1.56 crores) concealed in plastic hot fix; the diamonds were seized on 16.12.2021 under Section 110 of the Customs Act. Statements of the Appellant's Directors (Shri Moti Khanna and Shri Samir Jha) and H-Card holder Shri Pankaj Kumar were recorded under Section 108; they denied knowledge of the concealment, stating the export documents were filed on documents furnished by the exporter. Following an Offence Report dated 01.07.2022, an SCN dated 26.09.2022 proposed revocation of the licence for violations of Regulations 10(d), 10(e), 10(m), 10(n), 10(q) and 13(12); the Inquiry Officer submitted his report without examining any witnesses, relying on the investigation statements, and the Commissioner's Order-in-Original dated 14.03.2023 revoked the licence, forfeited the security deposit and imposed a penalty of Rs.50,000/-. The CESTAT set aside the Order-in-Original and remanded the matter for fresh adjudication with an opportunity to cross-examine the witnesses, prompting the present appeal under Section 130.

Key provisions

• Regulation 17, Customs Brokers Licensing Regulations, 2018 — Procedure for revoking license or imposing penalty
• Regulation 10(m), Customs Brokers Licensing Regulations, 2018 — Obligations of Customs Broker
• Section 130, Customs Act, 1962 —  Appeal to High Court
• Regulation 13(12), Customs Brokers Licensing Regulations, 2018 — Engagement or employment of persons