Custom, Excise & Service Tax Tribunal
V-Unit vs Chennai Customs General ... on 23 January, 2026
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. III
Customs Appeal No. 40954 of 2025
with
Customs Miscellaneous (Stay) Application No. 40858 of 2025
(Arising out of Order No. 11/2025 dated 01.07.2025 passed by Commissioner of Customs (General), No.
60, Custom House, Rajaji Salai, Chennai - 600 001)
M/s. V-Unit ...Appellant
No. 123/77, MM Tower,
B-4, 2nd Floor,
East Mada Church Road,
Royapuram,
Chennai - 600 013.
Versus
Commissioner of Customs ...Respondent
Chennai VIII Commissionerate,
No. 60, Custom House,
Rajaji Salai,
Chennai - 600 001.
APPEARANCE:
For the Appellant : Mr. N. Viswanathan, Advocate
For the Respondent : Ms. Rajini Menon, Authorised Representative
CORAM:
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL)
HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
FINAL ORDER No. 40138 / 2026
DATE OF HEARING : 28.10.2025
DATE OF DECISION : 23.01.2026
Per Mr. VASA SESHAGIRI RAO
This is an appeal filed by M/s. V Unit, Chennai
(hereinafter referred to as the Appellant) to assail the Order
No. 11/2025 dated 01.07.2025 (impugned order) passed by
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the Commissioner of Customs (General), Chennai Customs
Zone, Chennai (hereinafter referred to as the Respondent).
2. The Appellant was issued Customs Broker
Licence No. R-538/2019-CBS by Commissioner of Customs,
Chennai under Regulation 7(2)(b) of Customs Broker
Licensing Regulations, 2018 (hereinafter referred to as
CBLR).
3. Vide Order No. 23/2025 dated 12.06.2025, the
licence of the Appellant was suspended by the Respondent
upon receipt of offence report in the form of Order-in-
Original against the Appellant in following two different
cases: -
i. Order-in-Original No. 104579/2023 dated 07.02.2024
which was received by the Respondent on 28.04.2025
from Import Commissionerate, Chennai Customs Zone,
wherein the Adjudicating Authority has imposed a
penalty of Rs. 2,00,000/- (Rupees Two Lakhs only)
under Section 117 of the Customs Act, 1962 on Shri M.
Vinoth, partner in the Appellant firm.
ii. Order-in-Original No. 106410/2024 dated 24.04.2024
which was received by the Respondent on 16.05.2025
from Import Commissionerate, Chennai Customs Zone,
wherein the Adjudicating Authority has imposed a
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penalty of Rs. 10,00,000/- (Rupees Ten Lakhs only)
under Section 114AA of the Customs Act, 1962 on Shri
M. Vinoth, partner in the Appellant firm.
4. The role of Appellant in the First Case (O-in-O
No. 104579/2023 dated 07.02.2024) has been detailed out
by the Respondent in paras 4.1 and 4.2 of the order of
suspension dated 12.06.2025 as follows: -
"4.1 It appears from depositions of Shri M. Vinoth, partner
of M/s. V Unit, Chennai (CB) that CB generate check-list
for filing bills of entry and after approval of the importer,
he files bill of entry with customs; he had been associated
with Shri Anwar Sadath and Shri Moosa and in earlier
occasions also cleared consignments of 'Areca Nuts in split
form' by declaring the same as " UNFLAVOURED SUPARI
(BETEL NUT PRODUCT)"; that as per the instructions of
Shri Moosa, Manager and Shri Anwar Sadath, owner of
M/s. Surya Oil Exporters, he filed bills of entry by
mentioning description of the imported product wrongly as
'Inflavoured Supari (Betel NUT Product), so as to avail the
facility of exemption under Notification NO.50/2017-CUs
(Sl.No.103); that he admitted that the imported product
under the previous 5 bills of entry was 'Areca Nut in split
form' without any processing and any additives or
ingredients; and that he has gone through the Mahazar
dated 05.04.2022 drawn at ECCT CFS, Chennai and agreed
with the contents recorded therein and also admitted that
as per the photographs taken at the time of mahazar
proceedings dated 05.04.2022, the imported products
were nothing but 'Areca Nut in split form' and appear to be
not processed and did not contain any additives and
ingredients.
4.2 Thus, it appears from the above that Shri M Vinoth,
partner of M/s. V Unit, Chennai (CB) knowingly and
intentionally caused M/S SURYA OIL EXPORTERS to file
bills of entry with wrong description and classification of
imported goods, abetted and facilitated M/S SURYA OIL
EXPORTERS to fraudulently avail the benefit of Notification
No.50/2017-Cus dated 30.06.2017 ( Sl.No.103) and to
evade payment of appropriate customs duty and also to
circumvent the prohibition imposed by the Government of
India on the import of Areca Nuts below the specific value,
as per the Directorate of Foreign Trade (DGFT) Notification
No.20/2015-2020 dated 25.07.2018. Thereby it appears
that the CB i.e M/s V-Unit, Chennai being in the business
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of Customs Broker, have not caused any verification of the
actual description of imported goods and its correct
classification under Customs Tariff Act, 1975 and not
exercised due diligence in ascertaining the classification
details while representing M/S SURYA OIL EXPORTERS for
filing bills of entry and has failed to discharge their duty as
a Customs Broker."
5. Appellant's contraventions of CBLR, 2018 in the
First Case (O-in-O No. 104579/2023 dated 07.02.2024) have
been narrated by the Respondent in paras 16 and 16.1 of the
order of suspension dated 12.06.2025 as follows: -
"16. Violations made by the Customs Broker in r/o CBLR,
2018 in First Case (O-in-O No.104579/ 2023 dated
07.02.2024)
The Customs Broker i.e M/s V-Unit, Chennai prima facie
appears to have violated the following regulations of
Customs Broker Licensing Regulations CBLR, 2018:
i. Regulation 10(a) mandates the CB to obtain
authorization letter from the Exporter/Importer at the time
of filing of Bill of Entry. In the instance Case, Shri M.
Vinoth, partner of M/s. V Unit, Chennai (CB) vide his
Voluntary Statement dated 04.05.2022 inter alia stated
that Shri Moosa, Manager and Shri Anwar Sadath, owner
of M/s. Surya Oil Exporters, orally instructed him to file
bills of entry by mentioning description of the imported
product wrongly as 'Unflavoured Supari (Betel Nut
Product), so as to avail the facility of exemption under
Notification No.50/2017-Cus (Sl.No. 103). During
investigation it was revealed that CB generated check-list
for filing bills of entry and after approval of the importer,
he filed bill of entry with customs. Hence, the CB prima
facie failed to comply with Regulation 10(a) of CBLR, 2018.
ii. Regulation 10(d) mandates that the CB shall advise his
client to comply with the provisions of the Act, other allied
Acts and the rules and regulations thereof, and in case of
non-compliance, shall bring the matter to the notice of the
Deputy Commissioner of Customs or Assistant
Commissioner of Customs, as the case may be; But in the
instant Case, it appears that the CB knowingly and
intentionally caused M/s. SURYA OIL EXPORTERS to file
bills of entry with wrong description and classification of
imported goods, abetted and facilitated M/S SURYA OIL
EXPORTERS to fraudulently avail the benefit of Notification
No.50/2017-Cus dated 30.06.2017 ( Sl.No. 103) and to
evade payment of appropriate customs duty and also to
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circumvent the prohibition imposed by the Government of
India on the import of Areca Nuts below the specific value,
as per the Directorate of Foreign Trade (DGFT) Notification
No.20/2015-2020 dated 25.07.2018. Hence, the CB prima
facie failed to comply with Regulation 10(d) of CBLR, 2018.
(iii) Regulation 10(e) mandates that the CB shall exercise
due diligence to ascertain the correctness of any
information which he imparts to a client with reference to
any work related to clearance of cargo or baggage;
However, in the instant Case it appears that CB failed to
impart the information to the importer regarding correct
classification of imported goods, inapplicability of
Notification No.50/2017-Cus dated 20.06.2017 ( Sl.No.
103). The CB also failed to impart the information about
the prohibition imposed by the Government of India on the
import of Areca Nuts below the specific value, as per the
Directorate of Foreign Trade (DGFT) Notification
No.20/2015-2020 dated 25.07.2018. Hence, the CB prima
facie failed to comply with Regulation 10(d) of CBLR, 2018.
iv. Regulation 10(f) mandates the CB shall not withhold
information contained in any order, instruction or public
notice relating to clearance of cargo or baggage issued by
the Customs authorities, as the case may be, from a client
who is entitled to such information; However, in the
instant Case the CB appears to have wilfully suppressed
the fact of actual classification of imported goods (Areca
Nut in split form) under CTH No. 08028000, and also made
deliberate wrong declaration of classification of goods
under CTH No. 21069030, so as to wrongly avail the
benefit of Notification No.50/2017-Cus dated 20.06.2017
(Sl.No. 103) and to evade payment of appropriate customs
duty and also to circumvent the prohibition imposed by the
Government of India on the import of Areca Nuts below
the specific value, as per the Directorate of Foreign Trade
(DGFT) Notification No.20/2015-2020 dated 25.07.2018.
Hence, the CB prima facie failed to comply with Regulation
10(f) of CBLR, 2018.
v. Regulation 10(n) mandates the CB shall verify
correctness of Importer Exporter Code (IEC)number,
Goods and Services Tax Identification Number (GSTIN),
identity of his client and functioning of his client at the
declared address by using reliable, independent, authentic
documents, data or information; However, in the instant
Case it is noticed that the officers of DRI, Coimbatore
visited the registered premises of M/s Surya Oil Exporters.
It was found locked. Enquiries with the building owner Shri
P Gopalakrishnan revealed that during August 2019 two
persons viz. Shri Mohamed Ashraf Villan and Shri Anwar
Sadath approached him for taking mill on rent and had
executed an agreement, they had paid rent for 6 months
also. Further, the building owner stated that no activities of
any sort were carried out at the rented premises, nor did
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he know the reason as to why the mill was taken on rent
by them. Here, it is evident that the CB has not verified
the functioning of M/s. Surya Oil Exporters at the
registered address. Hence, the CB prima facie failed to
comply with Regulation 10(n) of CBLR, 2018.
16.1 Hence, in the First Case (Order - in - Original No.
104579/ 2023 dated 07.02.2024) the CB, M/s. V-Unit in
their acts of omission and commission prima facie
contravened the Regulations 10(a), 10(d), 10(e), 10(f) and
10(n) of CBLR, 2018."
6. The role of Appellant in the Second Case (O-in-O No.
106410/2024 dated 24.04.2024) has been narrated by the
Respondent in paras 15.1, 15.2 and 15.3 of the order of
suspension dated 12.06.2025 as follows: -
"15.1 From the Statement dated 13.04.2022 of Shri. P.M.
Vinoth of M/s. V- Unit, Customs Broker, it appears that he
only passed on the KYC and other details of the importers
to Shri Kamalakannan of M/s Lotus International Services
(CB), who filed the bill of entry for clearance. After
perusing the seizure of Mahazars along with images of split
pieces of areca nut and Chapter 08 and Chapter 21 of the
Customs Tariff, he agreed that goods are not betel nut
products known as Supari (Unflavoured Supari) as
declared in the Bill of Entry, but they are raw Areca Nuts /
Betel Nuts in split form and he admitted that raw Areca
Nuts / Betel Nuts in split form are rightly to be classified
under 0802 8020. In view of above, it appears that he is
the person who handled the clearance of the subject
imported goods which was also confirmed by the importer
in his voluntary statement dated 08.07.2022. It also
appears that Shri Vinoth knowingly mis-classified the
imported goods, with malafide intention to facilitate the
importer, and had passed on the import related clearance
work to Shri Kamalakannan and M/s Lotus International
Services.
15.2 Shri M.Vinoth of V-Unit, Customs Broker arranged
another Customs Broker M/s Lotus International Services
for filing Bill of Entry for clearance by sharing the IEC, and
KYC details of importer and has himself approved the
check list given by Shri Kamalakannan without the consent
of the importer and further that he has knowingly caused
the mis-declaration in the subject Bill of Entries with
regard to the classification and description of goods and
had also given false statements and derailed the
investigation.
15.3 Further, Shri. P.M. Vinoth of M/s.V- Unit, Customs
Broker only decided on the declaration made in the bill of
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entries with regard to the classification and description of
the goods and also approved the checklist without proper
approval from the importer of the goods. He agreed, after
perusal of images of split pieces or areca nut in the
mahazars, that the imported good appeared to be raw
Areca nuts/Betel Nuts in split form and are rightly to be
classified under 08028020. He has knowingly caused the
mis-declaration of the goods in the bill of entry to facilitate
the importer and also approved the checklist for filing Bill
of Entry without the consent of the importer."
7. Appellant's contraventions of CBLR, 2018 in the
Second Case (O-in-O No. 106410 / 2024 dated 07.02.2024)
are narrated in paras 17 and 17.1 of the order of suspension
dated 12.06.2025 as follows: -
"17. Violations made by the Customs Broker in r/o CBLR,
2018in Second Case (O-in-O No. 106410/ 2024 dated
24.04.2024)
The Customs Broker i.e M/s V-Unit, Chennai prima facie
appears to have violated the following regulations of
Customs Broker Licensing Regulations CBLR, 2018:
i. Regulation 10(a) mandates the CB to obtain
authorization letter from the Exporter/Importer at the time
of filing of Bill of Entry. In the instance Case, Shri P.M.
Vinoth, partner of M/s. V- Unit, Customs Broker approved
the checklist for filing Bill of Entry without proper approval
from the importer of the goods. Hence, the CB prima facie
failed to comply with Regulation 10(a) of CBLR, 2018.
ii. Regulation 10(e) mandates that the CB shall exercise
due diligence to ascertain the correctness of any
information which he imparts to a client with reference to
any work related to clearance of cargo or baggage;
However, in the instant Case it appears that CB has
knowingly caused the mis-declaration in the subject Bill of
Entries with regard to the classification and description of
goods. Hence, the CB prima facie failed to comply with
Regulation 10(e) of CBLR, 2018.
(iii) Regulation 10(q) mandates that the CB shall co-
operate with the Customs authorities and shall join
investigations promptly in the event of an inquiry against
them or their employees; However, in the instant Case, it
appears that the CB had given false statements and
derailed the investigation. Hence, the CB prima facie failed
to comply with Regulation 10(q) of CBLR, 2018.
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iv. Regulation 13(12) mandates that the Customs Broker
shall exercise such supervision as may be necessary to
ensure proper conduct of his employees in the transaction
of business and he shall be held responsible for all acts or
omissions of his employees during their employment.
However, in the instant Case it is noticed that Shri. P. M.
Vinoth of M/s. V-Unit, Custom Broker arranged another
Custom Broker M/s Lotus International Services for filing
Bill of Entry for clearance by sharing the IEC, KYC and
other details of importer and has himself approved the
check list given by Shri Kamalakannan without the consent
of the importer and further that he has knowingly caused
the mis-declaration in the subject Bill of Entries with
regard to the classification and description of goods. It
appears that M/s. V-Unit, Custom Broker lacks supervision
over his employee Shri P. M. Vinoth. Hence, the CB prima
facie failed to comply with Regulation 13(12) of CBLR,
2018.
17.1 Hence, in the First Case (Order - in- Original No.
106410/ 2024 dated 24.04.2024) the CB, M/s V-Unit in
their acts of omission and commission prima facie
contravened the Regulations 10(a), 10(e), 10(q) and
13(12) of CBLR, 2018."
8. It appeared to the Respondent that the Appellant
has prima facie violated various regulations of CBLR, 2018
viz. 10(a), 10(d), 10(e), 10(f), 10(n), 10(q) and 13(12)
which led to circumvention of the prohibition imposed by the
Government of India on the import of Areca Nuts below the
specific value, evasion of appropriate customs duty and
thereby inflicted loss to the public exchequer and if the
Customs Broker is allowed to continue to operate, it would
be detrimental to the interest of revenue and therefore, it is
necessary to take immediate action against the Customs
Broker to prevent them from further misuse of their license
in terms of Regulation 16(1) of Customs Broker Licensing
Regulations, 2018. Therefore, the Respondent passed Order
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No. 23/2025 dated 12.06.2025 wherein it was ordered inter-
alia as under: -
"In exercise of powers conferred under regulation 16(1) of
the CBLR, 2018, I Order suspension of the licence No. CHN
/ R-538/2019-CBS and PAN: AANFV7830L of M/s. V Unit,
having office address at 2nd FLOOR, NO.77/1, MM
TOWERS EAST MADHA CHRUCH STREET, ROYAPURAM,
CHENNAI- 600013, across all customs stations, with
immediate effect and until further orders as inquiry is
contemplated against the said Customs Broker. However,
all documents already filed prior to this order will be
allowed to be completed.
However, an opportunity of personal hearing under
regulation 16(2) of CBLR, 2018 is granted to M/s. V Unit,
on 19.06.2025 at 11 hrs before the undersigned at Krishna
Block, 3rd Floor, Custom House, No 60, Rajaji Salai,
Chennai 600 001."
9. After considering the Case records, Statements,
and the written and oral submissions made by the Customs
Broker (CB) during the personal hearing held on 19.06.2025
seeking revocation of the suspension order dated
12.06.2025, Respondent passed the impugned order wherein
in exercise of the powers conferred under provisions of
Regulation 16 (2) of the Customs Brokers Licensing
Regulations, 2018, Respondent ordered that the suspension
of Customs Broker Licence of the Appellant across all
Customs Stations vide order dated 12.06.2025 be continued
until further orders. Further, Respondent ordered that inquiry
proceedings under Regulation 17 of CBLR, 2018 shall follow.
10. The appellant has preferred the present appeal
assailing the impugned order.
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10.1 The Appeal is taken up out of turn as the
Appellant sought an early hearing of the matter considering
the plea of the Appellant that their livelihood and the
livelihood of 50 odd staff of the Appellant are affected.
Further, stay petition of the Appellant is also clubbed with
the main Appeal.
11.1 The Ld. Advocate Mr. N. Viswanathan appeared
and argued for the Appellant and submitted that the order
passed did not meet the mandate contained in regulation 16
[1] of the CBLR namely immediate necessity and appropriate
cases as has been held in plethora of cases delivered by the
Hon'ble Tribunal, as neither the suspension order nor the
continued suspension order cited any reasons of immediate
necessity whereas the facts relied upon pertained to 2022
and 2024. Further, he submitted that in the impugned order,
the Respondent pre-concluded their guilt and for this reason
alone the whole proceedings need to be set aside holding the
proceedings as void and vitiated.
11.2 The Ld. Advocate contented that the Respondent
failed to see that both the cases relied upon related to
dispute on classification with different views held by the
different authorities and that the settled position of law
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mandates the onus to establish the correct classification on
the revenue and in any case there is no room for charging
the Appellant and punishing them for any irregularity as the
Appellant had followed the accepted practice of assessment
after having filed the bills of entry based on import
documents provided to them, including the overseas
statutory country of origin certificate, which have not been
held to be false or materially incorrect.
11.3 He averred that whereas regulation 17 [1] of
CBLR mandates that action against the Customs Broker
should be initiated only upon receipt of an "offence report"
which term has been explained in CBLR, Respondent passed
the impugned order without even receiving any such offence
report. He submitted further that regulation 17 [1] of CBLR
mandates that action should be initiated against Customs
Broker within three months of receipt of the offence report
and when the Respondent had cited the orders passed in
2024 which were much earlier than the three-month period
mentioned in regulation 17 [1], the whole proceedings are
void ab-initio as has been held by the Hon'ble Bench of the
Madras High Court in the case of Santon Shipping Services.
11.4 He argued that the impugned order passed by
Respondent for continuing suspension of license of the
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Appellant is not justified in view of the fact that the
Commissioner of Customs [Appeals-II] had reversed the
decision of the adjudicating authority and upheld the
classification declared by the importer.
11.5 He submitted that the circular of the Board
having clearly instructed not to proceed against the Customs
Broker when only disputable interpretational issues are
involved also warrants setting aside of the impugned order
passed against the Appellant.
12.1 The Ld. Authorized Representative Ms. Rajni
Menon, for the Department reiterated and supported the
findings of the Respondent and reiterated that the
Appellant's conduct shows a recurring violation of critical
regulatory norms and due diligence standards expected of a
licence holder and the continued operation of such a
Customs Broker poses a real and immediate threat to
government revenue and national security due to the
likelihood of further non-compliant or fraudulent
consignments being cleared. She submitted that allowing
such a Customs Broker to continue operations could result in
further illegal clearances, revenue loss and potential
smuggling of prohibited goods.
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12.2 The Ld. AR averred that given the seriousness,
repetition, and wide-ranging nature of the violations,
immediate suspension of the Customs Brokers license of the
Appellant is justified and is in line with the statutory
mandate under Regulation 16 of CBLR, 2018, and necessary
for enabling a fair and unfettered inquiry under Regulation
17.
13. Heard both sides and perused the appeal
records.
14. The issues for consideration in this appeal are: -
i. Whether the action of Respondent in issuing the Order
No. 23/2025 dated 12.06.2025 suspending Customs
Broker license of the Appellant is in accordance with
the provisions of CBLR or not.
ii. Whether the action of Respondent in issuing the Order
No. 11/2025 dated 01.07.2025 for continuation of
suspension of Customs Broker license of the Appellant
is in accordance with provisions of CBLR or not.
15. Appellant has contended that the order did not
meet the mandate contained in regulation 16 [1] of CBLR as
neither the suspension order nor the continued suspension
order cited any reasons of immediate necessity when the
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facts relied upon pertained to 2022 and 2024. It is observed
that the Order dated 12.06.2025 suspending Customs Broker
license of the Appellant and the Order of continuation of
suspension have been issued under Regulation 16(1) and
16(2) of CBLR respectively which read as under: -
"Regulation 16. Suspension of license: -
(1) Notwithstanding anything contained in regulation 14,
the Principal Commissioner or Commissioner of Customs
may, in appropriate cases where immediate action is
necessary, suspend the license of a Customs Broker where
an enquiry against such Customs Broker is pending or
contemplated:
Provided that where the Principal Commissioner or
Commissioner of Customs may deem fit for reasons to be
recorded in writing, he may suspend the license for a
specified number of Customs Stations.
(2) Where a license is suspended under sub-regulation (1),
the Principal Commissioner of Customs or Commissioner of
Customs, as the case may be, shall, within fifteen days
from the date of such suspension, give an opportunity of
hearing to the Customs Broker whose license is suspended
and may pass such order as he deems fit either revoking
the suspension or continuing it, as the case may be, within
fifteen days from the date of hearing granted to the
Customs Broker:
Provided that in case the Principal Commissioner of
Customs or Commissioner of Customs, as the case maybe,
passes an order for continuing the suspension, further
procedure there after shall be as provided in regulation
17."
It is observed that in Regulation 16(1) of CBLR which
provides for immediate suspension of license of Customs
Broker where an enquiry against such Customs Broker is
pending or contemplated but immediate action is necessary,
reference is made to Regulation 14 ibid to explicitly provide
for the suspension of license of Customs Broker
notwithstanding anything contained in the said Regulation
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14. Therefore, the word "immediate action" and
"immediately" appearing in Regulation 16(1) should be read
in the back drop of Regulation 14 of CBLR which reads as
under: -
"Regulation 14. Revocation of licence or imposition of
penalty: -
The Principal Commissioner or Commissioner of Customs
may, subject to the provisions of regulation 17, revoke the
license of a Customs Broker and order for forfeiture of part
or whole of security, on any of the following grounds,
namely: -
(a) failure to comply with any of the conditions of the bond
executed by him under regulation8;
(b) failure to comply with any of the provisions of these
regulations, within his jurisdiction or anywhere else;
(c) commits any misconduct, whether within his
jurisdiction or anywhere else which in the opinion of the
Principal Commissioner or Commissioner of Customs
renders him unfit to transact any business in the Customs
Station;
(d) adjudicated as an insolvent;
(e) of unsound mind; and
(f) convicted by a competent court for an offence involving
moral turpitude or otherwise."
In Regulation 14 of CBLR which provides for revocation of
license of Customs Broker, it is specifically mentioned that
such revocation is subject to the provisions of Regulation 17
ibid, which reads as under:
"Regulation 17. Procedure for revoking license or imposing
penalty : -
(1) The Principal Commissioner or Commissioner of
Customs shall issue a notice in writing to the Customs
Broker within a period of ninety days from the date of
receipt of an offence report, stating the grounds on which
it is proposed to revoke the license or impose penalty
requiring the said Customs Broker to submit within thirty
days to the Deputy Commissioner of Customs or Assistant
Commissioner of Customs nominated by him, a written
statement of defense and also to specify in the said
statement whether the Customs Broker desires to be heard
in person by the said Deputy Commissioner of Customs or
Assistant Commissioner of Customs.
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(2) The Commissioner of Customs may, on receipt of the
written statement from the Customs Broker, or where no
such statement has been received within the time-limit
specified in the notice referred to in sub-regulation (1),
direct the Deputy Commissioner of Customs or Assistant
Commissioner of Customs, as the case may be, to inquire
into the grounds which are not admitted by the Customs
Broker.
(3) The Deputy Commissioner of Customs or Assistant
Commissioner of Customs, as the case maybe, shall, in the
course of inquiry, consider such documentary evidence and
take such oral evidence as may be relevant or material to
the inquiry in regard to the grounds forming the basis of
the proceedings, and he may also put any question to any
person tendering evidence for or against the Customs
Broker, for the purpose of ascertaining the correct position.
(4) The Customs Broker shall be entitled to cross-examine
the persons examined in support of the grounds forming
the basis of the proceedings, and where the Deputy
Commissioner of Customs or Assistant Commissioner of
Customs declines permission to examine any person on the
grounds that his evidence is not relevant or material, he
shall record his reasons in writing for so doing.
(5) At the conclusion of the inquiry, the Deputy
Commissioner of Customs or Assistant Commissioner of
Customs, as the case may be, shall prepare a report of the
inquiry and after recording his findings thereon submit the
report within a period of ninety days from the date of issue
of a notice under sub-regulation (1).
(6) The Principal Commissioner or Commissioner of
Customs shall furnish to the Customs Broker a copy of the
report of the Deputy Commissioner of Customs or
Assistant Commissioner of Customs, as the case may be,
and shall require the Customs Broker to submit, within the
specified period not being less than thirty days, any
representation that he may wish to make against the said
report.
(7) The Principal Commissioner or Commissioner of
Customs shall, after considering the report of the inquiry
and the representation thereon, if any, made by the
Customs Broker, pass such orders as he deems fit either
revoking the suspension of the license or revoking the
license of the Customs Broker within ninety days from the
date of submission of the report by the Deputy
Commissioner of Customs or Assistant Commissioner of
Customs, under sub-regulation (5) :
Provided that no order for revoking the license shall be
passed unless an opportunity is given to the Customs
Broker to be heard in person by the Principal
Commissioner of Customs or Commissioner of Customs, as
the case maybe.
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(8) Where in the proceedings under these regulations, the
Principal Commissioner of Customs or Commissioner of
Customs, as the case may be, comes to a conclusion that
the F card holder is guilty of grounds specified in regulation
14 or incapacitated in the meaning of the said regulation,
then the Principal Commissioner of Customs or
Commissioner of Customs may pass an order imposing
penalty as provided in regulation 18:
Provided that where an order is passed against an F card
holder, he shall surrender the photo identity card issued in
Form F forthwith to the Deputy Commissioner of Customs
or Assistant Commissioner of Customs.
(9) Where in an offence report, charges have been framed
against an F card holder in addition to the Customs Broker
who has been issued a license under regulation 7, then
procedure prescribed in regulations 16 and 17shall be
followed mutatis mutandis in so far as the prescribed
procedure is relevant to the F card holder:
Provided that where any action is contemplated against a
G card holder alone under these regulations, then instead
of authority referred to in sub-regulation (8), a Deputy
Commissioner or Assistant Commissioner rank officer shall
pass such order as mentioned in the said sub-regulation
along with debarring such G card holder from transacting
the business under these regulations for a period of six
months from such order.
Provided further that where an order is passed against a G
card holder, then he shall surrender the photo identity card
issued in Form G forthwith to the Deputy Commissioner of
Customs or Assistant Commissioner of Customs.
Explanation . - Offence report for the purposes of this
regulation means a summary of investigation and prima
facie framing of charges into the allegation of acts of
commission or omission of the Customs Broker or a F card
holder or a G card holder, as the case may be, under these
regulations thereunder which would render him unfit to
transact business under these regulations."
It is observed from a harmonious reading of the provisions of
Regulations 16(1), 16(2), 14 and 17 of CBLR reproduced
above that: -
(1) The procedure for suspension of license and continuation
of suspension of license under Regulations 16(1) and (2) of
18
CBLR is different from the procedure for revocation of
licence under Regulation 17 ibid.
(2) The only pre-requisite for suspension of license is that an
enquiry under Regulation 17 of CBLR should be pending or
contemplated against the Customs Broker on whether the
Customs Broker :
(a) failed to comply with any of the conditions of the
bond executed by him under regulation 8 of CBLR;
(b) failed to comply with any of the provisions of these
regulations, within his jurisdiction or anywhere else;
(c) committed any misconduct, whether within his
jurisdiction or anywhere else which in the opinion of the
Principal Commissioner or Commissioner of Customs
renders him unfit to transact any business in the
Customs Station;
(d) was adjudicated as an insolvent;
(e) is of unsound mind; and
(f) was convicted by a competent court for an offence
involving moral turpitude or otherwise.
(3) The suspension of license is resorted to in cases where
immediate action is necessary in cases where an enquiry
against such Customs Broker is pending or contemplated. In
other words, the suspension of licence should be done either
during the pendency of an enquiry against the Customs
Broker or before initiation of such an enquiry.
(4) no time limit is prescribed within which the Principal
Commissioner or Commissioner of Customs may suspend
the license of a Customs Broker under Regulation 16(1) of
CBLR but it is prescribed in Regulation 16(2) of CBLR that
an opportunity of personal hearing should be given to the
Customs Broker within 15 days from the date of suspension
of the license. A further time limit of 15 days from the date
of personal hearing is prescribed for passing an order of
either revoking the suspension or continuing it under
Regulation 16(2).
(5) a time limit of ninety days from the date of receipt of an
offence report by the Principal Commissioner or
Commissioner of Customs is prescribed in Regulation 17 of
CBLR for issuing notice to the Customs Broker for revocation
of license or imposition of penalty under CBLR.
In the instant case, an enquiry was contemplated against the
Customs Broker under Regulation 17 of CBLR as evident
from the fact that in the impugned Order No. 11/2025 dated
01.07.2025 wherein the suspension of Customs Broker
License of Appellant was ordered to be continued, it was
19
ordered that inquiry proceedings under Regulation 17 of
CBLR, 2018 shall follow. Further, the order of suspension of
license of Appellant is dated 12.06.2025, which is well before
initiation of enquiry against the Appellant under Regulation
17 of CBLR as ordered in impugned Order No. 11/2025 dated
01.07.2025. Thus, the two conditions prescribed under CBLR
for suspension of license of Appellant, viz. contemplation of
an enquiry against the Appellant and the date of suspension
of Customs Broker License of Appellant being either within
the period of pendency of enquiry against Appellant under
Regulation 17 of CBLR or before initiation of such an enquiry,
are satisfied. Therefore, Order No. 23/2025 dated
12.06.2025 suspending Customs Broker license of the
Appellant is in accordance with the provisions of Regulation
16(1) of CBLR.
16. The order of suspension of Customs Broker
License of Appellant was passed on 12.06.2025. Thereafter,
an opportunity of personal hearing was granted to the
Appellant which was conducted on 19.06.2025, which is
within 15 days from the date of suspension as prescribed in
Regulation 16(2) of CBLR and the impugned Order No.
11/2025 was passed on 01.07.2025 which is also within the
prescribed period of 15 days from the date of personal
20
hearing. Therefore, the impugned order has been passed in
accordance with the provisions of Regulation 16(2) of CBLR.
17. Appellant's reference to explanation of the term
"offence report" in CBLR and contention that in terms of
regulation 17 [1] of CBLR action should be initiated only
upon receipt of such an offence report is misleading as
neither Regulation 16(2) under which the impugned order for
continuation of suspension of Appellant's Customs Broker
License has been passed nor Regulation 16(1) under which
Customs Broker License of the Appellant was suspended
stipulate that the action thereunder should be taken only
upon receipt of an "offence report" as defined in the
explanation in Regulation 17 of CBLR which reads as under: -
"Explanation . - Offence report for the purposes of this
regulation means a summary of investigation and prima
facie framing of charges into the allegation of acts of
commission or omission of the Customs Broker or a F card
holder or a G card holder, as the case may be, under these
regulations thereunder which would render him unfit to
transact business under these regulations."
Usage of the words "for the purposes of this regulation" in
regulation 17 makes it explicitly clear that the meaning of
offence report contained therein is only applicable for
regulation 17 and not for any other regulation such as
Regulation 16(2) under which the impugned order has been
passed or Regulation 16(1) under which Customs Broker
License of the Appellant was suspended. In fact, the term
21
"offence report" is not mentioned anywhere in either
Regulation 16(1) or Regulation 16(2) of CBLR.
18. Appellant has placed reliance on the decision of
Hon'ble Madras High Court in the case of Santon Shipping
Services [C.M.A. No. 730 of 2016 and C.M.P. No. 5921 of
2016] to contend that regulation 17 [1] mandates that action
against the Customs Broker should be initiated within three
months of receipt of the offence report and when the
Respondent had cited the orders passed in 2024 which were
much earlier than the three-month period mentioned in
regulation 17 [1], the whole proceedings are void to be held
ab-initio. First of all, the case of Santon Shipping Services is
distinguishable as the issue there was whether the limitation
prescribed under Regulation 22(1) of Custom House
Licensing Regulation, 2004 (CHALR, 2004) for revocation of
licence is mandatory or not and it was held that revocation of
licence is without jurisdiction as the show cause notice for
the same was issued beyond the mandatory period of 90
days as fixed by Regulation 20(1) of CHALR, 2004 whereas
here it is an undisputed fact that the Respondent granted an
opportunity of personal hearing to the Appellant within the
period prescribed under Regulation 16(2) of CBLR, i.e., 15
days from the date of suspension of the license, and passed
the order of continuing it within a further time limit of 15
22
days as prescribed under Regulation 16(2). Further, in
Regulation 20(1) read with Regulation 22(1) of CBLR, 2004 a
time limit of 90 days from the date of offence report was
prescribed not only for revocation of license but also for
suspension of license whereas no such time limit is
prescribed in Regulation 16(1) of CBLR, 2018 for suspension
of license and the time limit of 90 days from the date of
offence report as prescribed in Regulation 17(1) of CBLR,
2018 is only for issuing notice for revocation of license as
Regulation 17(1) of CBLR, 2018 deals only with revocation of
licence and does not deal with suspension of licence.
Further, it is observed that in the Order No. 23/2025 dated
12.06.2025 suspending Customs Broker license of Appellant,
it is mentioned that Respondent received offence report in
the form of (i) Order-in-Original No. 104579/2023 dated
07.02.2024 which was received by Respondent on
28.04.2025 from Import Commissionerate, Chennai Customs
Zone and (ii) Order-in-Original No. 106410/2024 dated
24.04.2024 which was received by Respondent on
16.05.2025 from Import Commissionerate, Chennai Customs
Zone. This has not been disputed by the Appellant.
Therefore, it is an undisputed fact that the Order No.
23/2025 dated 12.06.2025 suspending Customs Broker
license of Appellant was issued immediately upon receipt of
offence report in the form of Orders-in-Original No.
23
104579/2023 and 106410/2024 on 28.04.2025 and
16.05.2025 respectively. Further, the time limit of ninety
days from the date of receipt of offence report as prescribed
in regulation 17(1) of CBLR will come into play only in
respect of a notice issued under the said regulation 17(1)
and not in respect of orders of suspension of license and
continuation of suspension of license under Regulation 16(1)
and 16(2) of CBLR respectively. The dispute in the present
appeal is not in respect of a notice, if any, issued under
Regulation 17(1) of CBLR and therefore, Appellant's
contention based on time limit prescribed under regulation
17 [1] of CBLR is not relevant for deciding the present
appeal against impugned order issued under regulation 16(2)
of CBLR.
19. On merits, Appellant argued that Respondent
failed to note that both cases relied upon by Respondent
dealt with classification disputes, and there is no irregularity
on the part of Appellant as they had followed the accepted
practice of assessment after filing bills of entry based on
import documents provided to them. It is observed that the
impugned order details Appellant's violation of various
regulations of CBLR as evident from the findings of the
Respondent which are extracted hereunder:
"21.3.1 I, in the instant Case, find that Shri. P. M.
Vinoth of M/s. V-Unit, Custom Broker arranged another
Custom Broker M/s Lotus International Services for filing
24
Bill of Entry for clearance by sharing the IEC, KYC and
other details of importer and has himself approved the
check list given by Shri Kamalakannan without the consent
of the importer. The CB cannot absolve itself by claiming
that the actual filing was done by another CB, when one of
its partners - acting within the scope of the firm -
facilitated the filing, approved the checklist, and handled
post-clearance documents and invoices.
22. The CB relied upon the Order dated 08.01.2015 passed
by Commissioner of Customs (Appeal-II) wherein the
Order-in-Original No. 106410/2024 was set aside.
22.1 Here, I find that in the instant Case, it involves two
Offence Report:
i. Order-in-Original No. 104579/ 2023 dated
07.02.2024
ii. Order-in-Original No. 106410/ 2024 dated
24.04.2024
22.2 I find that the CB in the first Case (Order-in-Original
No. 104579/ 2023 dated 07.02.2024) prima facie violated
the provisions of Regulations 10 (a), (d), (c), (f) and (n) of
the Customs Brokers Licensing Regulations, 2018. Further
any action under CBLR, 2018 is without prejudice to the
action that may be taken against the Customs Broker or F
card holder or G card holder under the provisions of the
Customs Act, 1962 (52 of 1962) or any other law for the
time being in force.
23. The CB submitted that as per Instruction No. 20/2024-
Customs dated 03.09.2024, CB should not be implicated in
cases interpretative disputes.
23.1 However, I find that this instruction is not applicable
in the present matters. The instant Case goes beyond
interpretative disputes involving the acts of filing Bills of
Entries on oral instruction of the importer without proper
authorisation, failing to verify the functioning of importer
at the declared address, lack of supervision of the CB firm
over its employee, act of giving false statements before
the Officers of Customs during investigation with intention
to derail the investigation etc., all of which go far beyond
the scope of classification disputes and indicate serious
systemic failures and deliberate misconduct.
....
28. Judicial precedents including Commissioner vs. Sri Manjunatha Cargo Pvt. Ltd. and Falcon India vs. Commissioner of Customs-New Delhi have reiterated the principle that Customs Brokers must not merely act as passive agents relying on client declarations but must perform independent verification, especially when red flags are present. In the present matters, such due diligence is conspicuously absent.
25
29.1 The Customs Broker's conduct - across both cases - clearly demonstrates that they failed to uphold the legal and ethical standards expected under the CBLR, 2018. The repeated violations, systemic lapses, misrepresentations, and lack of supervision amount to professional misconduct and establish a case of conduct incompatible with holding a valid Customs Broker licence.
30. The evidence on record indicates clearly that the CB has violated the various Regulations of CBLR, 2018 in an absolute negligent manner, facilitated illegal clearances of goods, failed to comply with lawful orders and repeated violations show that the CB, M/s. V Unit has exhibited conduct incompatible with the role of a licensed Customs Broker."
Appellant has not even countered the above findings in the impugned order. Further in respect of order-in-original No. 104579/2023 dated 07.02.2024 relied upon by Respondent, Commissioner (Appeals) allowed the appeal of importer but rejected the appeal of Appellant herein and in respect of order-in-original No. 106410/2024 dated 24.04.2024, which is also relied upon by Respondent, even the importer's appeal was rejected by Commissioner (Appeals). Board's Instruction No. 20/2024-Customs dated 03.09.2024 cited by Appellant in support of the contention that action against Appellant is not warranted is not relevant to this case as the said instruction does not provide for exonerating the Appellant from the consequences of various violations of CBLR discussed in the impugned order. In fact, Instruction No. 20/2024-Customs dated 03.09.2024 stipulates that "as regard the suspension of licenses of Customs Brokers, Instruction No. 24/2023 dated 18/07/2023 shall continue to 26 be followed" and Instruction No. 24/2023 dated 18/07/2023 stipulates that "Commissioner should also take the care also of recording his/her reasons as to why it is considered an appropriate case where immediate action of suspension is necessary", which has been scrupulously followed by the Respondent by recording the reasons for immediate suspension of the Customs Brokers license of the Appellant in both the orders, viz. order of suspension dated 12.06.2025 and the impugned order dated 01.07.2025 passed for its continuation. Therefore, there is no merit in the claim of Appellant that they have not committed any irregularity.
20. Role of Appellant in the first case (O-in-O No. 104579/2023 dated 07.02.2024) and second case (O-in-O No. 106410/2024 dated 24.04.2024) has been narrated in paras 4.1, 4.2, 15.1, 15.2 and 15.3 of the order of suspension dated 12.06.2025 and Appellant's contraventions of CBLR in the said first and second cases have been narrated by the Respondent in paras 16, 16.1, 17 and 17.1 thereof. Thereafter, impugned Order No. 11/2025 dated 01.07.2025 has been passed after duly hearing the Appellant, as prescribed in Regulation 16(2) of CBLR. Therefore, the contention of Appellant that the Respondent pre-concluded their guilt is contrary to facts. 27
21. In view of the above discussion and findings, both the issues in this appeal are decided in favour of Revenue and against the Appellant. The appeal is rejected and the impugned order is upheld. As such, the stay petition is also rejected.
(Order pronounced in open court on 23.01.2026) Sd/- Sd/-
(VASA SESHAGIRI RAO) (P. DINESHA) MEMBER (TECHNICAL) MEMBER (JUDICIAL) MK