The Delhi High Court has asserted that conscious use of another Customs Broker’s credentials, combined with failure to advise client on Plant Quarantine restrictions, constitutes substantive Customs Brokers Licensing Regulations, 2018 (CBLR) violations warranting revocation. The Court held that the statutory scheme governing Customs Brokers does not contemplate one Customs Broker undertaking the functions of another by using the latter’s credentials. A Customs Broker is required to transact business in accordance with the authorisation obtained from the importer and to discharge the obligations cast upon it under the CBLR.
The conscious and deliberate use of another Customs Broker’s credentials, combined with the failure to advise the client about restrictions on prohibited goods and the failure to maintain proper records, constituted substantive violations of Regulations 10(a), 10(d), 10(e), 10(f), and 10(k) of the CBLR, added the Court.
The Division Bench comprising Justice Anil Kshetarpal and Justice Shail Jain observed that despite holding its own valid Customs Broker licence, Goodwings Maritime consciously chose to undertake the clearance-related activities using the credentials of M/s Prakhar Gupta. The Court noted that the fact that M/s Prakhar Gupta may have permitted or consented to this arrangement did not absolve Goodwings of its independent statutory obligations under the Customs Brokers Licensing Regulations, 2018 (CBLR).
The Court further observed that the goods were ultimately found to be prohibited for import under the Plant Quarantine regime, and Goodwings failed to advise its client regarding the applicable restrictions or bring the matter to the notice of the Customs authorities as required under the CBLR. The Court also noted that the relief granted to M/s Prakhar Gupta by the CESTAT Allahabad Bench in separate proceedings did not affect the independent violations committed by Goodwings, as the proceedings against two separate Customs Brokers concerned their respective statutory obligations.
Essentially, the Court observed that the use of another Customs Broker’s credentials had the effect of concealing the identity of the actual Customs Broker undertaking the transaction and undermining the regulatory framework.
Briefly, the case arose from a customs clearance transaction involving M/s Goodwings Maritime Private Limited, a licensed Customs Broker, whose licence was revoked by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The dispute stemmed from a Bill of Entry filed at ICD Jhattipur, Panipat, on behalf of importer M/s JCS Botanicals for goods including dried roots and plant materials. While the Bill of Entry reflected M/s Prakhar Gupta as the Customs Broker, the investigation revealed that the actual clearance work was undertaken by Goodwings Maritime through its Director, Shri Awadhendra Kumar, and its G-Card holding employee, Sanjay Kumar. The goods were subsequently found to be prohibited under Plant Quarantine regulations. The Adjudicating Authority revoked Goodwings’ Customs Broker licence, forfeited its entire security deposit, and imposed a penalty of Rs.50,000, which was upheld by CESTAT.
