Delhi High Court affirms CESTAT’s remand: Customs Broker must get cross-examination opportunity in CBLR inquiries

1. Background of the dispute

The matter concerns M/s Vogue Logistics Pvt. Ltd., a licensed Customs Broker under the Customs Brokers Licensing Regulations, 2018 (CBLR). The company challenged a decision of the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi (CESTAT) before the Delhi High Court under Section 130 of the Customs Act, 1962.

The appeal arose from a Final Order dated 19.03.2026 passed by CESTAT. In that order, CESTAT:

• Set aside the Order-in-Original dated 14.03.2023 of the Commissioner of Customs (Airport & General); and
• Remanded the case back to the Commissioner for fresh adjudication, primarily to enable the Customs Broker to cross-examine witnesses whose statements had been used against it in the inquiry under the CBLR.

The assessee (Customs Broker) approached the High Court not to contest the factual findings on misconduct, but to challenge the correctness and legality of this remand order, contending that the proceedings themselves stood vitiated and should have been quashed rather than remanded.

2. Origin of the proceedings: seizure and offence report

2.1 Investigation against exporter and seizure of diamonds

On 14.12.2021, customs authorities initiated an investigation against M/s Disha Enterprises in relation to an alleged attempt to export diamonds that were said to be concealed in plastic hot fix material.

Pursuant to this inquiry:

• Diamonds stated to be valued at approximately Rs.1.56 crores were seized on 16.12.2021 under Section 110 of the Customs Act, 1962.
• The investigation involved examination of persons associated with the assessee Customs Broker, including its directors and an H-Card holder.

2.2 Statements recorded under Section 108

During the investigative phase, customs officers recorded statements under Section 108 of the Customs Act of the following persons connected with the assessee:

• Shri Moti Khanna – Director
• Shri Samir Jha – Director
• Shri Pankaj Kumar – H-Card holder of the assessee

These individuals stated that:

• The assessee Customs Broker had no knowledge of any alleged concealment of diamonds; and
• The export documentation had been prepared and filed based on documents provided by the exporter.

In addition, statements of other persons allegedly involved in the attempted export were also recorded by the customs authorities.

2.3 Offence report and Show Cause Notice under CBLR

Subsequently:

• An Offence Report dated 01.07.2022 was prepared against the assessee; and
• Based on that report, a Show Cause Notice (SCN) dated 26.09.2022 was issued proposing action against the assessee under the CBLR.

The SCN proposed revocation of the Customs Broker licence and other consequences for alleged breaches of the following CBLR provisions:

• Regulation 10(d)
• Regulation 10(e)
• Regulation 10(m)
• Regulation 10(n)
• Regulation 10(q)
• Regulation 13(12)

An Inquiry Officer was appointed under Regulation 17 of the CBLR to conduct an inquiry into these allegations.

3. Inquiry under Regulation 17 CBLR and Order-in-Original

3.1 Request for examination and cross-examination of witnesses

During the inquiry proceedings, the assessee:

• Specifically requested that the witnesses whose statements were intended to be relied upon should be examined before the Inquiry Officer; and
• Sought an opportunity to cross-examine them, including by placing reliance on the framework of Section 138B of the Customs Act.

However, despite these requests, the Inquiry Officer did not summon or record fresh oral evidence of these witnesses.

3.2 Inquiry Report without oral examination

Instead, the Inquiry Officer:

• Prepared and submitted his Inquiry Report dated 22.12.2022 based solely on the statements earlier recorded during investigation; and
• Relied on those investigation statements as evidence, without examining the deponents in the course of the CBLR inquiry.

The assessee then filed a detailed representation against this report and repeated its request for production of witnesses and cross-examination rights. Nevertheless, the adjudicating authority proceeded to decide the matter on the basis of the investigation statements and the Inquiry Report.

3.3 Commissioner’s Order-in-Original

By Order-in-Original dated 14.03.2023, the Commissioner of Customs (Airport & General):

• Revoked the Customs Broker licence of the assessee;
• Forfeited the security deposit furnished by the assessee; and
• Imposed a penalty of Rs.50,000/-.

These measures were taken on the premise that the assessee had violated the cited provisions of the CBLR, and that the inquiry as conducted was sufficient to sustain such action.

4. CESTAT proceedings and remand directions

The assessee filed an appeal before CESTAT challenging the Order-in-Original.