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2022 (8) TMI 181 - AT - CustomsRevocation of Customs Broker License - forfeiture of security deposit - levy of penalty on Customs Broker - allegation of violation of Regulation 10(n) of CBLR 2018 on the ground that DGARM has reported that some of the exporters whose exports the Customs Broker had handled did not exist at the premises - HELD THAT - The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker - the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporters were found to not exist during subsequent verification by the officers. The Commissioner was not correct in holding that the appellant Customs Broker has violated Regulation 10(n) of CBLR, 2018 - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Violation of Regulation 10(n) of CBLR, 2018 by the appellant Customs Broker. 2. Sustainability of the revocation of the appellant's customs broker license. 3. Correctness of the forfeiture of the security deposit. 4. Correctness of the imposition of a penalty of Rs. 50,000 on the appellant customs broker. Detailed Analysis: Issue 1: Violation of Regulation 10(n) of CBLR, 2018 The core issue is whether the appellant Customs Broker violated Regulation 10(n) of the CBLR, 2018. The Commissioner's order was based on a report from DGARM, which identified risky exporters who were not found at their registered premises. The Show Cause Notice (SCN) and impugned order listed 15 exporters, but evidence was presented only for one exporter, M/s Advit Enterprises. The Tribunal noted that the GSTIN, PAN, IEC, and other documents obtained by the appellant were genuine and issued by the respective authorities. The Tribunal emphasized that the Customs Broker cannot be faulted for trusting these government-issued documents and is not responsible for verifying the correctness of actions by government officers. The Tribunal cited the Delhi High Court's ruling in Kunal Travels, which stated that a Customs Broker is not an inspector and cannot be expected to verify the genuineness of every transaction. Issue 2: Sustainability of the Revocation of the Appellant's Customs Broker License Given that the appellant fulfilled its obligations under Regulation 10(n) by verifying the correctness of the IEC, GSTIN, and identity of the client using reliable, independent, and authentic documents, the Tribunal found that the Customs Broker had not violated the regulation. Therefore, the revocation of the license was not justified. The Tribunal highlighted that it is not the responsibility of the Customs Broker to physically verify the existence of each client at their premises. The responsibility is limited to verifying the documents provided. Issue 3: Correctness of the Forfeiture of the Security Deposit The Tribunal concluded that since the Customs Broker did not violate Regulation 10(n), the forfeiture of the security deposit of Rs. 5,00,000 was not warranted. The evidence provided did not substantiate the allegations against the Customs Broker, and the documents relied upon were genuine and issued by the appropriate authorities. Issue 4: Correctness of the Imposition of Penalty of Rs. 50,000 Similarly, the imposition of a penalty of Rs. 50,000 was not justified as the Customs Broker had not failed in discharging its responsibilities under Regulation 10(n). The Tribunal noted that the Customs Broker had verified the documents as required and that any subsequent non-existence of the exporter at the registered address could not be held against the Customs Broker. Conclusion: The Tribunal set aside the impugned order, concluding that the Customs Broker had not violated Regulation 10(n) of CBLR, 2018. Consequently, the revocation of the license, forfeiture of the security deposit, and imposition of the penalty were not sustainable. The appeal was allowed with consequential relief, if any.
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