The Central Board of Indirect Taxes and Customs ( CBIC ) recently issued very important guidelines advising against routinely implicating Customs Brokers as co-noticees in cases involving interpretative disputes. The instructions direct that Customs Brokers should only be named as co-noticees if the investigation clearly establishes their role in abetment.
The Indirect Taxes and Customs Board clarified that unless the Customs Brokers’ involvement in aiding the alleged violation is substantiated by the investigating authority, they should not be unnecessarily dragged into cases concerning the interpretation of statutory provisions.
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In such instances, the Show Cause Notice must explicitly detail the Customs Brokers’ involvement under the relevant provisions of the Customs Act, 1962.
This CBIC instruction came in response to representations made by Customs Brokersā Associations, which raised concerns about their members being frequently named as co-noticees in show cause notices issued to importers or exporters over interpretative disputes.
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A study report by CESTAT, New Delhi, on final orders, has reinforced the need for any offence report to clearly outline the Customs Brokerās role in the case. If a Customs Broker is named as a co-noticee under the Customs Act, 1962, there must be a direct link between their role in the offence and the proceedings initiated against them under the CBLR, 2018. In these cases, proving the element of āabetmentā by the Customs Broker is crucial.
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The CBIC also reiterated that Instruction No. 24/2023, dated 18/07/2023, concerning the suspension of Customs Brokersā licences, will remain in effect.
Under the Customs Brokers Licensing Regulations, 2018 (CBLR, 2018), specific provisions exist for addressing lapses by Customs Brokers. Any proceedings against a Customs Broker must strictly adhere to these provisions and must be distinct from those related to duty demands, interest, or penalties under the Customs Act, 1962.
The competent authority is required to follow the detailed procedures and timelines laid out in Regulations 16 and 17 of CBLR, 2018 when considering actions against Customs Brokers.
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