The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, has set aside the suspension of a Customs Broker licence, finding that the department failed to demonstrate any urgency warranting immediate action.
A Bench comprising Judicial Member Ajay Sharma and Technical Member P. Anjani Kumar heard an appeal filed by Navbharat Consolidation Pvt. Ltd. against an order dated September 16, 2026, passed by the Principal Commissioner of Customs (General), Mumbai. The licence was suspended on August 31, 2026, although the department had received the offence report on April 27, 2026.
The tribunal observed, “However, suspension of the licence after 3-4 months of the receipt of the offence report and without showing any urgency is neither explained nor understood. This is not to say that the respondent authorities cannot initiate action to revoke the licence of the appellant by taking appropriate action in time following the procedure laid down under law. We find that suspension of licence in a belated manner, that too a few days before the initiation of enquiry by issuing show cause notice, is neither warrated by the facts of the case nor sustainable legally..."
The case arose from an investigation into alleged customs duty evasion through misdeclaration of the country of origin of imported walnut kernels to claim benefits under the South Asian Free Trade Area (SAFTA).
The department alleged that the Customs Broker had filed six Bills of Entry for Transworld Commercial Enterprises. Its Managing Director, Prashant Dwivedi, was also allegedly a Managing Partner of the importer.
The Customs Broker argued that the department had failed to explain the delay or identify any additional material received subsequently that justified immediate suspension.
The department alleged that the broker had facilitated misdeclaration of the origin, transit and valuation of imported walnut kernels and raisins to claim SAFTA duty exemptions. It also accused the broker of failing to exercise due diligence.
The tribunal found that the offence report already contained information about the alleged omissions and commissions by the broker. However, the suspension order did not identify any additional material in the relied-upon documents that necessitated immediate action.
It observed that if the department believed suspension was necessary to protect government revenue, it could have acted within a reasonable period. The delay of nearly four months negated the need for immediate action.
The tribunal accordingly set aside the impugned order and revoked the suspension of the Customs Broker license. It clarified that the department remained free to initiate proceedings for revocation by following the procedure prescribed under law.
The appeal was allowed.
For Appellant: Sujit Sahoo, Zainab Burmawala and Sunny Gupta
For Respondent(s): Ashish Sharma