M/S ANAX AIR SERVICES PVT. LTD v. COMMISSIONER OF CUSTOMS, AIRPORT & GENERAL, NCH, NEW DELHI

(iii) I order for forfeiture of the whole amount of security deposit furnished by themin terms of Regulation 14 and Regulation 17 of CBLR, 2018;

(iv) I impose a penalty of Rs. 50.000/- qn M/s Anax

Air Services Private Limited, (PAN No. AAACA1708J) under the provisions of Regulation 18 of CBLR 2018 and Regulation 17 of CBLR, 2018.”

15. The appellant, thereafter, filed an appeal challenging the order dated 03rd February, 2025 passed by the learned Commissioner of Customs. After duly considering the submissions of the appellant as well as the department, the learned CESTAT upheld the decision of the Commissioner of Customs, while dropping the allegation of violation of Regulation 10(e) of the Customs Brokers Licensing Regulations, 2018 and passed the following order: b) We, therefore, find the revocation of licence, forfeiture of security deposit and penalty of Rs. 50,000/- imposed on the appellant are proportionate to the offence committed. c) In view of the above, we find no infirmity in the impugned order. The impugned order is upheld and the appeal is dismissed.

16. Aggrieved by the same, the Appellant has filled the present appeal.

17. The appellant has raised number of grounds in this appeal. Amongst other, the question of law which the appellant has tried to canvass are:-

18. The appellant submits that there is no evidence to establish violation of Regulation 1(4) of CBLR, 2018 or any transfer/sale of Customs Broker Licence for consideration. It is stated that the entire case is based solely on the uncorroborated statement of the G-card holder without any independent evidence regarding transfer of licence or receipt of monetary consideration. The appellant also contends that shipping bills were filed on the basis of documents received from Shri Raviraj Sinh Jadeja and there was no drawback, IGST refund or export incentive involved in the consignments.

19. It is further submitted that the appellant had obtained and verified KYC documents of the exporter including IEC, GST registration, Aadhaar card, PAN card, bank details, LUT and self-sealing permissions from DGFT, GSTN and ICEGATE portals. The appellant contends that Regulation 10(n) does not require physical verification or personal interaction with the exporter while placing reliance upon the judgment in “Aradhya Export Import Consultants Pvt. Ltd. v. Commissioner of Customs (Airport and General), New Customs House, New Delhi”. The relevant observations of the said judgment reads thus:- “12. A reading of Regulation 10(n) reveals that the CB would not be in violation of its obligations if he has relied on “reliable, independent, authentic documents, data or information” such as the IEC and GSTIN which are issued by the Director General of Foreign Trade and GST Officers respectively. Furthermore, Regulation 10(n) does not necessitate a physical verification of the veracity of the exporter. We therefore find merit in the contention of the appellant that the CESTAT committed a manifest illegality in holding that the appellant was guilty of having failed to discharge the obligation placed in terms of Regulation 10(n) of CBLR 2018.

16. It is thus apparent that the judgment handed down by the CESTAT is patently erroneous and cannot be sustained.”

20. The appellant challenges the extreme punishment of revocation of licence as grossly disproportionate, particularly in the absence of mens rea, financial gain, or prior violations. Reliance is placed on “Commissioner of Customs & C. Ex.

HYD-II v. H.B. Cargo Services 2011 (268) ELT 448 (A.P), the relevant paras reads thus:-

21. As against above, contention of the respondent department is that the appellant had failed to participate in the inquiry proceedings despite due opportunity given and chose neither to appear before the Inquiry Officer nor to file its reply within the prescribed time. Only at a belated stage before the Commissioner, a request for cross-examination was raised.

22. Such a request, made after abstaining from the inquiry proceedings, cannot be permitted to frustrate disciplinary proceedings, especially when sufficient independent material exists on record to establish the violations of Regulation 1(4) of CBLR 2018 which reads thus:- “1(4) Every license granted or renewed under these regulations shall be deemed to have been granted or renewed in favour of the licensee, and no license shall be sold or otherwise transferred.”

23. A bare reading of the aforesaid regulation i.e., 1(4) and the factual matrix of the present case in hand shows that there is a clear violation of the regulation which can be inferred from the voluntary statement made by the G-card holder of the appellant namely Shri. Dasari Naraynmurthi where he voluntarily stated that the license was used by many other persons apart from this case for the monitory consideration which has also been established from the record. The department (Inquiry Officer) has given sufficient opportunities to the CB on the following dates i.e., on 26/09/2024, 3/10/2024 and 11/10/2024 to bring on record the agreements or any other information related to the operations done by any other persons. Neither the appellant chose to file any written submissions nor he appeared before the Inquiry Officer on any of the dates.

24. The appellant has come out with a case that there is an element of denial of opportunity of hearing as the appellant has submitted a reply before the Inquiry Officer and there was a failure of the Inquiry Officer to look into the said reply.

25. The record depicts that the reply was submitted by the appellant in the inquiry to the policy branch through an e-mail which otherwise should have been submitted to the Inquiry Officer.

26. The reply was in reference to the Show Cause Notice served on the appellant which provides entire details of the authority. The appellant intentionally submitted a reply to a different branch, in this case, a policy branch so as to create artificial ground of denial of opportunity of hearing. Such a conduct of the appellant speaks of the appellant having conducted himself in an unethical manner.

27. As such, his contention that there is no violation of Sub-clause (4) of Clause (1) of the Regulation cannot be inferred.

28. Section 108 of the Customs Act, 1962, contemplates a statement can be recorded under Section 108 which is in the form of confessional statement. In the case in hand, the confessional statement of G-Card holder was recorded which was neither denied nor retracted. Such statement continues to hold the field in the present proceedings. There is no element of any error or scope to infer that such statement was nonvoluntary statement.

29. In the said statement a specific narration is made as regards the mode and manner in which the appellant has conducted in the matter of the clearance of the banned goods of which by giving a false declaration, an export was sought.

30. As such, the observations drawn by both the authorities below that there is a violation of subclause (e) of clause 10 of the Customs Broker Licensing Regulation is just and proper and does not call for any interference.

31. Apart from above both the authorities in categorical terms have dealt with the issue as regards the violation of clause 10(a) and 10(d). Clause 10(a) and 10(d) of the Regulation deals with the authorization to be obtained from each of the companies, firms, individual who have employed appellant as a customs broker and produce such authorization whenever required.

32. Clause 10(d) provides for the advice to be imparted by the appellant to his client to comply with the provisions of the Acts.

33. The cumulative effect of the conduct of the appellant in the case in hand is dealt with by both the authorities.

34. It is apparent that the appellant has never advised his client to comply with the provisions of the act, at least no material to that effect was placed by him though sufficient opportunities were provided.

35. Apart from above, there is absence of authorization in favour of the appellant as could be inferred from the records. In this backdrop the violation of the clause as has been noted above was rightly inferred. The appellant also cannot come out of the findings recorded qua the violation of clause 10(n), wherein there is a failure to verify the correctness of the details viz., Importers Export Code, Goods and Service Tax Identification Number etc.,

36. The statement of the G-card holder Shri Dasari Narayanmurthi was recorded under Section 108 of the Customs Act, 1962 during the course of investigation and forms a part of the evidentiary material corroborated by the attending facts and conduct of the Appellant.

37. The contention raised by the Appellant regarding denial of crossexamination of the G-card holder namely Shri Dasari Narayanmurthi is wholly misconceived and does not vitiate the proceedings in the facts and circumstances of the present case.

38. The Commissioner of Customs has very appositely dealt with the said issue as follows: “8.4.[5] I find that the Customs Broker (CB) has acknowledged receipt of the Show Cause Notice through their registered e-mail. It is observed that the complete address and contact details of the Inquiry Officer were duly communicated to the CB, and the CB was explicitly directed to participate in the proceedings and submit their representation to the Inquiry Officer within 30 days of the issuance of the Show Cause Notice. However, the CB chose not to participate in the inquiry. Consequently, I find that the Customs Broker has forfeited their entitlement to cross-examine Shri Dasari Narayanmurthi, G-Card holder, which was required to be conducted before the Inquiry Officer as per Regulation 17(4) of the CBLR, 2018.”

39. It is the contention of the appellant that the denial of crossexamination of the G-Card holder has violated his fundamental rights, and entire finding is based solely on uncorroborated statement of the Gcard holder, without any independent evidence or proof of monetary gain.

40. The right of cross-examination is not an absolute or unfettered right and its grant depends upon the facts and circumstances of each case, particularly, the nature of proceedings and the material available on record.

41. In the present case, the proceedings under the Customs Brokers Licensing Regulations, 2018 are departmental and regulatory in nature, intended to examine the conduct and obligations of a Customs Broker operating under a statutory license.

42. The findings against the Appellant are not founded solely upon the statement of the G-cardholder, but are supported by undisputed documentary material and surrounding circumstances, including the shipping bills for prohibited goods, complete failure of ‘KYC’ verification, handling of export consignments through unknown intermediaries, and the admitted non-compliance with statutory obligations cast upon the Customs Broker under the CBLR, 2018.

43. It is a settled principle of law that principles of natural justice are flexible and cannot be applied in a straitjacket formula. Crossexamination is necessary only where the adjudication exclusively relies upon a disputed statement and where prejudice is demonstrated.

44. The law laid down by the Apex court in the matter of “Kanungo & Co. Vs. Collector of Customs, Calcutta & Others” [1983 (13) E.L.T 1486 (S.C) is reproduced as under:-

45. In “Surjeet Singh Chhabra Vs. Union of India” 1997 (89) E.L.T. 646 (SC), the Apex Court observed as under:

46. In Patel Engineering Ltd. Vs. Union of India [2014 (307) E.L.T. 862 (Bom.)], the High Court of Bombay observed as under:

50. In Union of India v. Tulsiram Patel [(1985) 3 SCC 398: 1985 SCC (L&S) 672] whereupon reliance has been placed by Mr Reddy, this Court held: (SCC p. 477, para 97)

47. In the matter of “M/s Vallabh Textiles Vs. Additional Commissioner Central Tax GST, Delhi East &Ors.” bearing W.P. (C) No. 4576/2025 decided on 9th April, 2025, this Court observed as under:

48. It is the case of the appellant that he never received any of the communication dated 26.09.2024, 03.10.2024 and 11.10.2024 from the Inquiry officer and he proceeded and conducted the proceedings ex-parte by taking a ground that the office address and the E-mail ID of the appellant has been changed. The same also imposes an obligation on the CB to inform it to the customs authority within two days as laid down under CBLR,2018 and hence the same cannot be cannot be a ground for the relief sought by the appellant as the same was on the appellant to inform the change of address to the said respondent department which he has failed to.

49. The appellant, as observed hereinabove, has received the SCN and submitted a reply before the wrong section of department of which he intends to take benefit of.

50. Therefore, mere denial of cross-examination, in the peculiar facts of the case, does not render the inquiry proceedings illegal nor does it invalidate the concurrent findings recorded by the Commissioner and affirmed by the learned CESTAT.

51. The co-ordinate bench of this Court in the matter of “Sriaanshu Logistics Through Proprietor Vs. Commissioner of Customs (General) 2024 SCC OnLine Del 1744(2024) 388 ELT 682, relevant para of the same reads thus:- “13) We are unable to accept the submission of the learned counsel for the petitioner for the reason that a Customs Broker occupies a very important position in the customs house. A lot of trust is kept in the customs broker by the importers, exporters as well as by the Government agencies. To ensure appropriate discharge of such trust, the Customs Broker Licensing Regulations have been framed and there has to be strict compliance thereof. Any contravention of such obligation would invite sanction as provided in the Regulations.

52. The relevant paras in the matter of “Commissioner of Customs Vs. K.M. Ganatra and Company” (2016) 4 SCC 687 reads thus:-

18. In this regard, Ms Mohana, learned Senior Counsel for the appellant, has placed reliance on the decision in Noble Agency v. Commr. of Customs [Noble Agency v. Commr. of Customs, (2002) 142 ELT 84 (Tri)] wherein a Division Bench of CEGAT, West Zonal Bench, Mumbai has observed: (ELT p. 87, para 12)

We approve the aforesaid observations of CEGAT, West Zonal Bench, Mumbai and unhesitatingly hold that this misconduct has to be seriously viewed.”

53. The same stand was taken by the Hon’ble High Court of Bombay in the matter of “Skypak Services Specialists Limited v. Union of India Through the Ministry of Finance” 2025 SCC Online Bom. 2517,, specifically in paragraphs 46 and 49 and the same read thus:-

54. Hence, while multiple violations of regulations were committed by the CB, the punishment imposed by the authority and upheld by the CESTAT is well established and reasoned, and therefore requires no further indulgence.

55. It is a settled position of law that Customs House Agent is a one of the most important component in the system of processing the request of the exporters/importers in the backdrop, provisions and regulations framed under the customs Act. The custom house agent, in our opinion, first owes a duty and responsibility to the public exchequer of conducting in truthful and most honest manner.

56. They are guided by the regulations and conduct dehors the regulation by a Custom House Agent definitely provides for the punishment. The very object of such piece of legislation is to safeguard the customs revenue and most importantly to ensure that the goods exported/imported are not anywhere hampering the national interest of the country and its security.

57. The Custom House Agent cannot seek an excuse for its failure to diligent act in terms of the regulation and claim that there was no criminal intention.

58. It is not the case of the appellant that it is prosecuted in the matter but it can be inferred that the appellant proceeded against for violation of the regulation that too the serious violations.

59. In such an eventuality, in our opinion, the very view expressed by both the authorities below are completely based on analysis of the failure of the appellant and the relevant provisions of the regulation which empowers the imposing of the punishment.

60. There are concurrent findings recorded by both the authorities below which in our opinion is just and proper in the facts and circumstances of the case.

61. That being so, no case for causing interference in extraordinary jurisdiction is made out.

62. The present appeal as such lacks merit and stands dismissed.

63. Pending applications, if any, also stands disposed of.

64. Copy of this judgment be uploaded on the website of this Court.

NITIN WASUDEO SAMBRE (JUDGE)

AJAY DIGPAUL (JUDGE) APRIL 10, 2026/sky/ok