Brief Background / Introduction:

Custom Broker s [earlier known as Custom House Agents] holds a very important position in the facilitation of international trade pertaining to import / export goods. The custom broker is a n entity / person which act s as a bridge between the importers / exporters and the customs department and the job of the customs broker is to inter-alia file the proper declarations on behalf of the importer / exporter on the basis of the documents provided by the importer / exporter pertaining to import or export of goods which are imported in or exporte d out of country.

The custom broker and its working is governed by the regulations known as Custom Broker Lice n sing Regula tions, 2018. The history of the se regulations can be taken way back to 19 84 wherein first time the regulations were introduced known as Custom House Agent Licensing Regulations, 1984 [ as it was then called CHALR, 1984]. The sa id regulations were formulated by the Central Bo a rd of E x cise and Customs [CBEC] in exercise of powers conferred under Section 146(2) of Customs Act, 1962. CBEC vide Notification No. 85-Cu stoms (N.T.) d ated 19.03.2024 brought the CHALR, 1984 in force.

The said regulations of 1984 provided the entire framework qua grant of custom house agent [as it was then called] license, obligations of a customs house agent while ca rrying on work a s a custom s house agent , procedure qua suspension, revocation of the custom house agent license .

​The said regulations were thereafter superseded by Custom House Agent Licensing Regulations, 2004 which came into force videNotification No. 21-Customs (N.T.) dated 23.02.2004 and was followed on or after 23.02.2004.

Thereafter the CBEC vide Notification No. 65/2013 dated 21.06.2013 brought in C ustoms Brokers Licensing Regulations , 2013 [CBLR, 2013] and thereafter the said regulations were superseded vide Notification No. 41/2018-Customs (N.T.) dated 14.05.2018 by virtue of which the Customs B roker Licensing Regulations, 2018 came into force and the said notifica tion superseded all previous regulations i .e. CHALR, 1984, CHALR 2004 and CBLR, 2013.

Therefore , as on date, CBLR, 2018 is in forc e which has till date been amended keeping in view the amendments made in Customs Law.

The Custom Broker Licensing Regulations is a complete code in itself and any act / action taken by or against the custom broker on its license ha s to be taken in accordance with the regulations of 2018.

Grant Of License:

Any person who intends to work as a custom broker has to first pass an examination under R egulation 6 of CBLR, 2018 and when the written and oral examination is passed, thereafter the applicant is granted a Custom Broker license under Regulation 7 of CBLR, 2018 after which the applicant can work as a custom s broker.

The person who passes the exam under Regulation 6 of CBLR, 2018 is given a F-Card and the said per son is the owner o f t h e license. The F-Card holder can employee G-Card holder and a H-Card holder who are the employees of the F -card holder i .e . they are said to be the employees of the Custom Broker.

Procedure of Revocation of License [Regulation 17 Of CBLR, 2017]:

The procedure of revocation of a custom broker licences is contemplated under Regulation 17 of CBLR, 2017. There are certain strict time limits which are mentioned in the said reg ulations and the said time limits uses the word “SHALL” . The said word is in the regulation s starting from 1984 till the recent regulations of 2018. The said wor d binds the customs department to mandatorily follow the timelines in true le tter and spirit while exercising powers while revoking the custom broker license of the license holder. It is very surprising to note that most of the times the customs department d oes not follow these mand a tory time limits and revokes the license of the custom broker in a very casual manner. Regulation 17 is reproduced herein below:

“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 DeputyCommissioner of Customs or Assistant Commissioner ofCustoms 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 saidDeputy Commissioner of Customs or AssistantCommissioner of Customs.
2. The Commissioner of Customs may, on receipt of thewritten 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 may be, 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 thebasis of the proceedings, and where the DeputyCommissioner 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 shallrecord 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 afterrecording 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 AssistantCommissioner of Customs, as the case may be, and shall require the Customs Broker to submit, within the specifiedperiod 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 therepresentation 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 ofCustoms or Assistant Commissioner of Customs, under sub-regulation (5) :
8. 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 may be.
9. Where in the proceedings under these regulations, thePrincipal 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 thePrincipal Commissioner of Customs or Commissioner ofCustoms may pass an order imposing penalty as provided in regulation 18:
10. 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.
11. Where in an offence report, charges have been framedagainst an F card holder in addition to the Customs Broker who has been issued a license under regulation 7, thenprocedure prescribed in regulations 16 and 17 shall 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 DeputyCommissioner or Assistant Commissioner rank officer shallpass such order as mentioned in the said sub-regulationalong with debarring such G card holder from transacting thebusiness 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 thisregulation 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 regulationsthereunder which would render him unfit to transact business under these regulations.

Judicial Precedents:

Th ere have been numerous instances wherein Hon’ble High Courts of the country and the Hon’ble Tribunal s in a number of cases have held that the time limits prescribed under CBLR, 2018 are mandatory and they have to be followed s e nsu stricto . Case laws are as follow s:

1. Overseas Air Cargo Services versus Commr. Of Cus. (General), New Delhi reported as 2016 (340) E.L.T. 119 (Del.);
2. Impexnet Logistic Versus Commissioner of Customs (General) reported as 2016 (338) E.L.T. 347 (Del.);
3. Indair Carrier Pvt. Ltd. Versus Commissioner of Customs (General) reported as 2016 (337) E.L.T. 41 (Del.); and
4. Sunil Dutt versus Commissioner of Cus. (General), NCH reported as 2016 (337) E.L.T. 162 (Del.).
5. Sanco Trans Ltd. v. Commissioner of Customs, Sea Port/Imports, Chennai: (2015) 322 E.L.T. 170 (Mad.)
6. Commissioner v. Eltece Associates 2016 (334) E.L.T. A50 (Mad.)."
7. HLPL Global Logistics P. Ltd. v. Commissioner of Customs, (2016) 40 GSTR 86 (Delhi))
8. Santon Shipping Services Vs. The Commissioner of Customs reported as 2017 SCC OnLine Mad 7084.
9. A.M. Ahamed & Co. V. Commissioner of Customs (Imports), Chennai- 2014 (309) E.L.T. 433 (Mad)
10. Masterstroke Freight Forwarders P. Ltd., V. Commissioner of Customs (I), Chennai - 2016 (332) ELT 300 (Mad.)
11. M/s Leo Cargo Services Pvt. Ltd. Versus Commissioner of Customs (Airport & General); CUSAA 8/2020; Delhi High Court
12. M/s Rakesh Sharma Vs. CC, New Delhi (I&G)

Further, the Hon’ble CESTAT, Delhi in the case of M/s D. S. Cargo Agency Versus Commissioner Of Customs (Airport and General), New Delhi in Custom Appeal No. 50618 of 2019 took the consistent view holding that the time frame prescribed under the Customs Broker Licensing Regulations, 2013 to be mandatory and non-compliance thereof would result in dropping of the proceedings.

Conclusion:

In the en d it can be concluded t hat use of the word “Shall” has been incorporated in the regulations right from its inception in 1984 and the same is in force till date and the consistent judicial pronouncements have made it clear that the timelines prescribed under the regulations are mandatory in nature and the customs department in any manner cannot travel be yond the scope of the language of the regulations and the judicial pronouncements as thesame are binding upon the department .