Court holds that once a customs broker licence is revoked, subsequent revocation orders on the same licence are impermissible but penalties imposed in separate orders require independent adjudication.
In a significant judgment delivered on September 21, 2026, the Delhi High Court (Division Bench comprising Justices Avneesh Jhingan and Shail Jain) clarified the legal position regarding the revocation of customs broker licences under the Customs Act, 1962 and the Customs Brokers Licensing Regulations, 2018. The court ruled that once a customs broker licence has been revoked, issuing a second independent revocation order on the same licence is beyond the statutory provisions and results in an impermissible multiplicity of litigation. However, the court emphasized that penalties imposed under separate orders must still be independently adjudicated, even if the licence revocation itself has already been upheld.
The case involved M/s R. K. Logistics, a proprietorship that had been granted a customs broker licence on November 2, 2016. The Customs authorities revoked this licence on July 1, 2020, forfeited a security deposit of Rs. 5,00,000, and imposed a penalty of Rs. 50,000 under Regulation 18 of the 2018 Regulations. Subsequently, separate proceedings were initiated alleging violation of Regulation 10(n) of the same Regulations. This led to another order dated April 16, 2021, again revoking the licence, forfeiting the security deposit, and imposing an additional penalty of Rs. 50,000.
Challenging the second revocation order, M/s R. K. Logistics approached the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The tribunal dismissed the appeal on the ground that the licence revocation had already been upheld in respect of the first order, but it did not address the question of penalty imposed by the second order. The appellant then filed an appeal before the Delhi High Court under Section 130 of the Customs Act, 1962.
The Court upheld the earlier revocation and forfeiture of the security deposit but held that the second revocation order was invalid as it attempted to revoke an already revoked licence. The court observed that multiple grounds for revocation should be consolidated and decided within the same proceedings to avoid multiplicity of litigation. However, the court set aside the tribunal's order insofar as it did not adjudicate on the penalty imposed under the second order, holding that penalties require separate and independent adjudication regardless of the licence revocation status.
The matter was remanded to the tribunal for a fresh hearing and decision on the penalty imposed under the second order dated April 16, 2021, in accordance with law.
This judgment underscores the importance of procedural propriety in administrative actions under the Customs Act and ensures that penalties are not overlooked even where the primary issue of licence revocation has been conclusively decided. It provides clarity to customs brokers and regulatory authorities on the limits of revocation proceedings and the necessity for distinct adjudication of penalties.
Bottom Line:
Customs Broker licence once revoked cannot be revoked again by a second independent order; if there are multiple grounds for revocation, they ought to be part of the same proceedings. However, penalty imposed under a separate order still requires independent adjudication if not considered by the Tribunal.
Statutory provision(s):
Customs Act, 1962 Section 130, Customs Brokers Licensing Regulations, 2018 Regulation 10(n), Regulation 18
M/s R. K. Logistics v. Commissioner of Customs, (Delhi)(DB) : Law Finder Doc Id # 2990693
