Unexplained delays undermine immediate suspension of customs brokers’ licences, Madras High Court rules

These connected writ petitions challenged orders suspending Customs Broker licences under Regulation 16(1) of the Customs Brokers Licensing Regulations, 2018 (CBLR), and, in some cases, orders continuing suspension under Regulation 16(2).

The allegations included smuggling, attempted export of prohibited goods, misdeclaration, and failures concerning authorisation, KYC verification and supervision.

The suspension orders followed incidents occurring between 2021 and 2025; in several cases, substantial time elapsed before the investigation was completed, the offence report reached the licensing authority, or suspension was ordered.

The petitioners contended that the delay was inconsistent with the requirement of “immediate action” and the timelines in Circular No. 9/2010-Customs.

The Court confined its review to the validity of the immediate suspensions, leaving the merits of the allegations open.

Whether the suspension orders satisfied Regulation 16(1)’s requirement that immediate action be necessary, given the time taken to investigate and the delay after receipt of the offence reports.

Whether the delay and the resulting invalidity of the Regulation 16(1) orders also required setting aside the consequential orders continuing suspension under Regulation 16(2).

Section 146 of the Customs Act, 1962 authorises regulations governing Customs Broker licensing, including suspension.

Regulation 16(1) of the CBLR, 2018 permits suspension only in an appropriate case where immediate action is necessary and an enquiry is pending or contemplated; the mere existence of an enquiry is insufficient.

Regulation 16(2) provides for a hearing within fifteen days of suspension and consideration of whether suspension should continue.

Immediate suspension is an exceptional, preventive power requiring application of mind and reasonable promptness once sufficient material is available; delay must be assessed in context, including the investigation’s nature, the availability of relevant material and the licensing authority’s subsequent response.

Circular No. 9/2010-Customs contemplates an offence report within thirty days of detection and suspension action within fifteen days of the report’s receipt.

The Court held that the Circular remained applicable and binding on the Department, and that substantial, unexplained departure from its timelines could undermine the claimed necessity for immediate action.

The Court also considered *East West Freight Carriers (P) Ltd. v. Collector of Customs*, *Commissioner of Customs v. National Shipping Agency*, *Babaji Shivram Clearing and Carrier Pvt. Ltd. v. Union of India*, and *Schankar Clearing and Forwarding v. C.C. (Import & General)* on delay and the emergent nature of suspension; and *Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur* on determining whether procedural requirements are mandatory.

Applying Regulation 16(1) and the Circular’s timelines, the Court found that the delays across the cases were not satisfactorily explained.

They included suspension more than 250 days after the incident in the Aala Shipping matters, 606 days after seizure in the Sealine Forwarders matter, and more than 228 days after seizure in the Dev Cargo Logistics matter; in Dev Cargo, the investigation itself took nearly 200 days without a satisfactory explanation.

In other cases, the suspension orders were made more than fifteen days after the offence report was received, including the Al-Kabir Impex and BSKV Logistics matters.

The Court rejected the contention that a pending Regulation 17 revocation enquiry, by itself, justified delayed use of the exceptional Regulation 16 power where no intervening circumstance requiring immediate suspension was shown.

In the circumstances of the batch, the unexplained investigation and decision-making delays were inconsistent with the asserted need for immediate preventive action.

The petitioners were permitted to resume business as Customs Brokers, subject to the CBLR, 2018 and other applicable requirements.

The Court expressed no opinion on the merits of the allegations and left the competent authority free to proceed in accordance with law, including by pursuing licence revocation where warranted.

There was no order as to costs.