ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 19.12.2025
CESTAT Chandigarh Overturns Customs Broker License Suspension
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.โโ
In a landmark decision, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has ruled in favor of M/s Secon Logistics Pvt. Ltd., setting aside the suspension of their Customs Broker License. โ This decision, pronounced on December 17, 2025, brings relief to the appellant after a prolonged legal battle lasting over three years.
Background of the Case
The case originated from an incident in December 2020, when M/s Secon Logistics Pvt. Ltd., acting as a customs broker, filed Bills of Entry for goods declared as “light melting scrap” on behalf of M/s Goyal Steel Industries. โ Upon examination by the Directorate of Revenue Intelligence (DRI), the goods were found to be dry dates instead of the declared scrap. โ This led to the seizure of the goods and subsequent investigations, including the arrest of the customs broker’s director, Mr. Jatinder Kumar. โ
The Commissioner of Customs, Ludhiana, suspended the customs broker license of M/s Secon Logistics Pvt. โ Ltd. on February 5, 2021, under Rule 16(1) of the Customs Broker Licensing Regulation (CBLR), 2018. โ A series of hearings and legal proceedings followed, culminating in the issuance of a Show Cause Notice (SCN) for revocation of the license on November 10, 2021. โ
Key Arguments in the Case
The appellant, represented by a team of advocates, argued that the suspension and subsequent proceedings violated the mandatory timelines prescribed under the CBLR, 2018. โ Regulation 16 requires a personal hearing within 15 days of suspension, followed by an order within the next 15 days. โ Regulation 17 mandates that a notice for revocation must be issued within 90 days of the “offence report.” โ The appellant contended that these timelines were not adhered to, rendering the proceedings invalid. โ
The appellant also maintained that they had acted within the provisions of the CBLR, 2018, and had no knowledge of the misdeclaration of goods. They argued that the import documents, including the Pre-Shipment Inspection Certificate (PSIC), were in order, and the alleged violations were committed by the importer, M/s Goyal Steel Industries. โ
On the other hand, the Revenue argued that the appellant had committed serious violations, including failure to verify the legitimacy of the importer, misdeclaration of goods, and non-compliance with regulations. โ They also cited the Supreme Court’s extension of timelines during the COVID-19 pandemic as a justification for the delay in issuing the SCN. โ
CESTAT’s Observations and Decision โ
After hearing both sides, the CESTAT found that the timelines prescribed under the CBLR, 2018, are mandatory and must be strictly adhered to. โ The Tribunal cited multiple judgments from various High Courts, which have consistently held that violations of these timelines render the proceedings invalid. โ The Tribunal also noted that the appellant had already suffered due to the suspension of their license for over three years, which had severely impacted their livelihood. โ
While the Tribunal acknowledged certain lapses on the part of the customs broker, it emphasized the importance of proportionality in imposing penalties. โ It referred to the Delhi High Court’s judgment in the case of Ashiana Cargo Services, which cautioned against disproportionate penalties that unjustly restrict a customs broker’s ability to conduct business. โ
In conclusion, the CESTAT set aside the impugned order and directed the restoration of M/s Secon Logistics Pvt. โ Ltd.’s customs broker license within four weeks.
Key Takeaways
- Adherence to Timelines: The case underscores the importance of adhering to the strict timelines prescribed under the CBLR, 2018, for suspension and revocation proceedings. โ
- Proportionality in Penalties: The Tribunal highlighted the need for penalties to be proportionate to the violations, taking into account the impact on the livelihood of the customs broker. โ
- Legal Precedents: The decision aligns with previous High Court rulings that emphasize the mandatory nature of timelines under the CBLR, 2018. โ
Conclusion
The CESTAT’s decision in favor of M/s Secon Logistics Pvt. Ltd. is a significant development in the realm of customs regulations. It serves as a reminder to both customs brokers and authorities about the importance of adhering to legal procedures and timelines. โ This case also highlights the need for a balanced approach in penalizing violations, ensuring that penalties are fair and proportional. โ
Source: CESTAT Chandigarh
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