Delhi High Court upholds cancellation of Customs Broker licence for lending licence and filing Shipping Bill without authorisation

Overview of the Delhi High Court decision

The Delhi High Court in Pardeep Kumar Prashar Vs Commissioner of Customs (Delhi High Court) has upheld the disciplinary action taken against a Customs Broker, including:

  • Revocation of the Customs Broker licence
  • Forfeiture of security deposit of Rs.75,000/-
  • Imposition of penalty of Rs.50,000/- under the Customs Brokers Licensing Regulations, 2018 (CBLR, 2018)

The Court dismissed CUSAA 75/2025, thereby affirming Final Order No. 58517/2024 dated 27.08.2024 passed by the CESTAT, Principal Bench, New Delhi, which in turn had sustained the Order-in-Original dated 02.08.2021 of the Commissioner of Customs (Airport & General). The High Court’s judgment was delivered on 21.08.2026.

The dispute centred on:

  • The admitted arrangement whereby the assessee (Customs Broker) allowed his G-card holder to use his Customs Broker licence and digital credentials for a fixed monthly consideration
  • Filing of a Shipping Bill in the name of an exporter without obtaining any authorisation from that exporter
  • Alleged violations of Regulations 10(a), 10(d), 10(e) and 10(n) and of Regulation 1(4) of the CBLR, 2018

Background facts and seizure of Red Sanders

Attempted export under the questioned Shipping Bill

The proceedings originated from an export attempt under Shipping Bill No. 8904827 dated 12.12.2019, filed in the name of M/s Deepnidhi International, having IEC No. AALFD4113A. Key particulars were:

  • Description in the Shipping Bill: “decorative iron material”
  • Declared FOB value: Rs.66,000/-
  • Covered under Master Airway Bill No. 160-1382-7063
  • Intended consignee: Stromshaga AB, Sweden

Pursuant to specific intelligence received by the Special Intelligence and Investigation Branch (SIIB), Air Cargo Export Commissionerate, New Customs House, New Delhi, the consignment was detained for detailed scrutiny.

On 16.12.2019, a 100% examination of the consignment was done in the presence of independent witnesses and representatives of the Customs Broker. The examination revealed:

  • 33 brown corrugated boxes, wrapped with white HDPE bags and tape
  • Inside the boxes were wooden logs of varying dimensions, wrapped in bubble wrap and thermocol

These wooden logs were identified as Red Sanders (Pterocarpus santalinus), in miscellaneous sizes, weighing about 1,158 kilograms.

As the consignment comprised Red Sanders – an item whose export requires prior permission from the CITES Management Authority – and no such permission was furnished, Customs officials treated the goods as prohibited. The consignment was seized under Section 110 of the Customs Act, 1962 on the belief that it was liable to confiscation under Section 113(d) of the Act.

Investigation into the role of the Customs Broker

Absence of authorisation from the named exporter

During investigation, Customs examined how the Shipping Bill came to be filed in the name of M/s Deepnidhi International. The inquiry brought out that:

  • The assessee had filed the Shipping Bill in the name of Deepnidhi without any written authorisation as required
  • The assessee had not even contacted Deepnidhi before filing the Shipping Bill

Further, the documents relating to this export were supplied by Shri Mohit Taneja, described as one of the Directors of M/s Soleado Impex. The Department’s case was:

  • Shri Mohit Taneja requested that the Shipping Bill be filed not in the name of M/s Soleado Impex but in the name of Deepnidhi
  • Acting on this request, the assessee filed the Shipping Bill in the name of Deepnidhi, though Deepnidhi had not engaged or authorised the assessee

Thus, the Shipping Bill was filed in the name of an exporter who was neither the actual client nor aware of the transaction.

Role of the G-card holder and use of licence and dongle

The investigation also scrutinised the role of Shri Devender Kumar, the G-card holder associated with the assessee. Notable aspects were:

  • Shri Devender Kumar was operating from premises at L-9, Sunder Singh Building, near Mahipalpur Chowk, New Delhi, distinct from the assessee’s place of business at the Air Cargo Complex
  • Searches were conducted both at the assessee’s premises and at the premises of Shri Devender Kumar on 16.12.2019
  • While nothing incriminating was recovered from the assessee’s premises, various documents and a computer system were resumed from the premises of Shri Devender Kumar for further examination

The assessee’s statement was recorded on 16.12.2019. In that statement, he accepted that:

  • He was receiving Rs.10,000/- per month from Shri Devender Kumar
  • He had lent his Customs Broker licence and dongle to Shri Devender Kumar “for a price”

The CESTAT relied significantly on this admission, as well as on a similar admission made before the Tribunal, to hold that the assessee had effectively allowed his G-card holder to carry out Customs-related work using his licence and credentials.

Initiation of proceedings under CBLR, 2018

The investigation into the attempted export (and related Show Cause Notice No. 29/KRM/ADC/ACE/2020 dated 09.12.2020 issued by the Additional Commissioner of Customs) formed the basis for initiation of licensing proceedings under the CBLR, 2018.

Chronology of regulatory action:

  1. 15.12.2020 – Suspension of the assessee’s Customs Broker licence
  2. 06.01.2021 – Post-hearing confirmation of the suspension order
  3. 08.02.2021 – Issuance of a separate Show Cause Notice to the assessee under the CBLR, 2018, proposing:
    • Revocation of the Customs Broker licence
    • Forfeiture of security deposit
    • Imposition of penalty for alleged non‑compliance with obligations under the Regulations
  4. Appointment of an Inquiry Officer, completion of inquiry and submission of report
  5. 02.08.2021 – Passing of Order‑in‑Original by the Commissioner of Customs (Airport & General):
    • Licence revoked
    • Entire security deposit of Rs.75,000/- forfeited
    • Penalty of Rs.50,000/- imposed