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HIGH COURT OF DELHI
Date of Decision: 12th March, 2026
COMMISSIONER OF CUSTOMS AIRPORT AND GENERAL NEAR IGI AIRPORT
NEW DELHI- 110037 EMAIL- legalgeneral10@gmail.com ....APPELLANT
Through: Mr. Amit Garg, Mr. Vikrant Jain and Ms. Ragini Singh, Advs.
Through: Mr. Salil Arora and Ms. Reeva Chugh Arora, Advs.
HON'BLE MR. JUSTICE AJAY DIGPAUL
JUDGMENT
NITIN WASUDEO SAMBRE, J.
1. The challenge in the present appeal preferred under Section 130 of the Customs Act, 1962 is to the final order dated 28th August, 2024 passed by the Customs, Excise and Service Tax Appellate Tribunal (‘CESTAT’) wherein the Order-in-Original dated 14th February, 2024 revoking the Customs Broker License of the respondent came to be quashed and set aside.
2. The fact remains that the appeal is maintainable on the issue, only in case if there involves a question of law.
3. That being so, we have called upon learned counsel for the appellant to demonstrate as to the involvement of a substantial question of law in the matter.
4. The learned counsel for the appellant has invited our attention to Customs Brokers Licensing Regulations, 2018, particularly the Regulations 10(a), 10(d), 10(e) and 10(n). According to him, the show cause notice which was issued to the respondent in categorical terms in para 4 refers to the violation of the aforesaid regulation. He would claim that so as to substantiate and put the respondent to notice of such violations, the extracts from the show cause notice issued under the Customs Act were relied on. He further contends that the CESTAT has failed to look into the material that was referred to in the show cause notice. In this context, he has invited our attention to the extracts of the show cause notice, particularly the reproduction of para 37 in its entirety, so as to justify that the show cause notice, in categorical terms, speaks of the violations of the regulation being demonstrated. He would further claim that such violations post inquiry report, which was duly made available to the respondent, were in fact adjudicated in the Order-in-Original and there was sufficient notice to the respondent as regards the violation of the regulation. In such an eventuality, his contentions are the Tribunal has erred in recording and finding contrary to the provisions of regulation 10 of Customs Brokers Licensing Regulations, 2018.
5. As against above, the counsel for the respondent has invited our attention to the very same show cause notice, so as to claim that the show cause notice is too vague to answer and understand, as to the mode and manner in which the violation of the regulations 10(a), 10(d), 10(e) and 10(n) can be inferred.
6. According to him, in the Order-in-Original, the authority travelled beyond the show cause notice and recorded the finding based on not only the inquiry report but also the material which was found to be basis for issuance of show cause notice under the Customs Act.
7. In such an eventuality, he would claim that the order of the Tribunal cannot be faulted with.
8. We have considered the aforesaid submissions.
9. Since the counsel for the appellant has specifically relied on para 4 of the show cause notice, it is necessary for us to refer to the said para. For the convenience, we have reproduced the said para, which reads thus:
10. The perusal of the aforesaid para contemplates that the material borrowed from the show cause notice dated 30th December, 2022 issued under the Customs Act, particularly from paras 37–37.4, 38, 38.1, 49 and 50 were relied on. The material in the said show cause notice which is relied on for initiating action against the respondent was for the purpose of the initiation of action under the Customs Act, 1962 wherein the show cause notice pertains to the penalty being imposed under Section 112(a), 112(b), 114AA and 117 of the Customs Act, 1962.
11. As far as the said material is concerned, the least that was expected of the appellant was to specify in the show cause notice, as to how the said material comes within the ambit and satisfaction of the opinion to be formed for the purpose of prima facie recording violation of the regulations 10(a), 10(d), 10(e) and 10(n). However, the respondent was not provided with any specific allegations explaining the mode or manner in which the alleged violations are attributable to them.
12. Though Order-in-Original in detail considers the violations by the respondent, however, the fact remains that the Order-in-Original has travelled beyond the scope of the show cause notice.
13. One can understand that the appellant at the relevant time, giving a concession before the CESTAT, saying that they be permitted to withdraw the Order-in-Original and causing a fresh show cause notice to the respondent based on the material which was relied on or in which the reasons are recorded against the respondent.
14. However, there is complete failure on the part of the appellant to do so and it is only after the CESTAT allowed the appeal, having recorded that the appellant has travelled beyond the show cause notice, the appellant has tried to justify their show cause notice based on the material which is found to be basis for passing the Order-in-Original.
15. It is a settled position of law that in case if the show cause notice is vague or the order based on the show cause notice considers such material which was never part of the record of the show cause notice, the order can be said to be in violation of the principles of natural justice. The said position is also affirmed by the judgment of the Apex Court in Commissioner of Central Excise, Bangalore vs Brindavan Beverages (P) Ltd. and Ors. (2007) 5 SCC 388, which reads as under:
16. In such an eventuality, the Tribunal has recorded that the Orderin-Original is passed contrary to the show cause notice, by only recording a reason to that effect. In our opinion, the said reason can be said to be justified in the wake of the findings recorded by us hereinabove.
17. That being so, we are of the view that no substantial question of law is involved in the present appeal.
18. The appeal, as such, stands dismissed. Pending applications, if any, also stand dismissed.
NITIN WASUDEO SAMBRE (JUDGE) AJAY DIGPAUL, J (JUDGE) MARCH 12, 2026/ar/yr