Procedural CBLR violations without a proven substantive customs breach cannot justify licence revocation.

The appellant, a licensed Customs Broker, was subjected to a Premises Based Audit to examine compliance with the Customs Brokers Licensing Regulations, 2018 (“CBLR, 2018”).

During physical verification on 27.11.2018, the declared premises at B-176, Jawahar Park, Khanpur, New Delhi, was found to be occupied by a third party.

The Commissioner revoked the appellant’s Customs Broker licence, forfeited the security deposit, and imposed a penalty of ₹50,000 under Order-in-Original No. 106/MK/POLICY/2019 dated 17.10.2019.

In a subsequent order dated 27.06.2024, the appellant was held liable for alleged violations connected with excess availment of ROSL by two exporters, M/s Baba Exports and M/s Krystafab Enterprises, and a further penalty of ₹50,000 was imposed.

1. Whether the alleged violations of CBLR, 2018—including non-intimation of change of address, operation at ICD Loni without permission, use of unauthorised signatures or employees, and alleged sub-letting of the licence—justified revocation of the Customs Broker licence and forfeiture of the security deposit?

2. Whether the appellant could be held liable under Regulations 10(d), 10(e), 10(f) and 10(q) for the exporters’ alleged excess availment of ROSL and for related post-clearance conduct?

3. Whether the penalties imposed under the impugned orders were proportionate to the violations established against the appellant?

The Tribunal applied Regulations 7(3), 10, 13, 14, 17 and 18 of the CBLR, 2018.

Regulation 7(3) requires a Customs Broker wishing to transact business at another Customs Station to submit Form-C intimation; Regulation 10(o) requires immediate intimation of changes in postal address and other contact particulars; and Regulation 13 requires approval, identification and supervision of persons employed by the broker, including limiting document-signing authority to authorised F- or G-card holders.

Regulation 18 permits imposition of a penalty up to ₹50,000 for contravention of the Regulations.

The Tribunal distinguished procedural or regulatory lapses from substantive breaches affecting Customs control or revenue.

It relied on *Husain Kasam Mukadam & Sons v. Pr. Commissioner of Customs, Mumbai*, holding that where no substantive violation is established, revocation may be set aside while penalty is sustained.

*M/s APS Freight & Travels Pvt. Ltd. v. Commissioner of Customs (General), New Delhi*, regarding the limits of a Customs Broker’s obligation to physically verify client premises.

*Kunal Impex* and *Kunal Travels*, concerning the scope of Regulation 10(d) and proportionality of revocation.

*Naman Gupta v. Commissioner of Customs (Airport)*, holding that liability cannot ordinarily be fastened on a Customs Broker for exporter misconduct occurring after the broker’s statutory function is completed at the Let Export Order stage.

The Tribunal held that non-intimation of the change of address violated the specific and time-bound obligation under Regulation 10(o), but treated it as a regulatory contravention adequately addressed by the ₹50,000 penalty rather than by revocation of the licence.

The failure to obtain permission for operation at ICD Loni under Regulation 7(3) was likewise characterised as a compliance failure distinct from breach of the broker’s primary obligations under Regulation 10 and insufficient, by itself, to warrant the harsh consequence of revocation.

Although signatures on certain Bills of Entry did not correspond with authorised records and one signature was allegedly linked to another broker’s G-card holder, the Tribunal found no established serious or substantive breach of the Customs Act sufficient to sustain revocation.

The allegation of sub-letting was rejected because the Department relied principally on the fact that clearances occurred at multiple ports on the same day; since Customs filings were made through the national ICEGATE platform, such activity did not by itself prove sub-letting, and no more concrete evidence was produced.

The allegations concerning dealings through mediators and concealment of DRI notices were also held unestablished on the evidence.

In the ROSL-related appeal, the Tribunal held that the Customs Broker could not be made responsible for the exporters’ post-clearance excess availment of ROSL or for exporter-side lapses, particularly where the Commissioner had mechanically adopted the Inquiry Officer’s findings without independent application of mind.

In C/50080/2020, the Tribunal set aside revocation of the Customs Broker licence and forfeiture of the security deposit, but upheld the ₹50,000 penalty for the procedural violations established under the CBLR, 2018.

In C/50798/2025, the Tribunal reduced the penalty from ₹50,000 to ₹5,000, holding that the appellant could not be held liable for the exporters’ alleged excess ROSL availment.

The impugned orders were modified accordingly.