2023 (10) TMI 831 - HC - Customs

Revocation of Customs Broker License - forfeiture of security deposit - it is alleged that the report has been drawn excluding vital evidence and the report is not legal - HELD THAT - Admittedly, no action has been initiated under the provisions of the Customs Act against the exporter nor any show cause notice was issued under Section 124 of the Customs Act against the exporters or the respondent customs broker. After having found that the exporters are not traceable, there appears to be a feeble attempt made by the Department to confer upon Customs broker by proposing to examine as to whether the Customs broker has done proper verification in terms of the obligation under Regulation 10(n) of the CBLR. It is not the case of the department that the documents which were produced by the respondent/customs broker were false and fabricated documents and there is nothing on record to even remotely suggest such an allegation. The Tribunal has rightly held that the obligation of the customs broker under regulation 10(n) does not include keeping a continued surveillance on the client to ensure that he continues to operate from that address and has not changed its operations - The stand taken by the respondent even at the time of enquiry that all set of documents which were produced clearly would satisfy the mandate under regulation 10(n) of the Act - the learned Tribunal has rightly explained the scope and obligation under regulation 10(n) and the finding would not call for any interference. The substantial questions of law are answered against the revenue - Appeal dismissed.

Summary

Issues involved:
The appeal challenges the Customs, Excise, and Service Tax Appellate Tribunal's order regarding the revocation of a customs broker's license under the Customs Broker Licensing Regulation, 2018. The revenue raises substantial questions of law related to the interpretation of Regulation 10(n) of the Regulation, 2018, and Circular no. 09/10-CUS dated 8.04.2010, as well as the jurisdiction of the Tribunal in the matter.

Issue (i):
The first issue questions whether the Tribunal should consider the true spirit and meaning of Regulation 10(n) of Regulation, 2018, along with Circular no. 09/10-CUS dated 8.04.2010 before setting aside the Order-in-original dated 08.08.2022. The respondent, a customs broker, had collected and submitted various documents for verification as per the regulation. The Tribunal found that the documents were authentic and reliable, fulfilling the broker's obligation under the regulation. The Tribunal's decision was based on the verification process mandated by the regulation and previous tribunal decisions.

Issue (ii):
The second issue concerns whether the Tribunal is required to provide an independent reason for setting aside the Order in Original. The Tribunal's decision to set aside the original order revoking the customs broker's license was based on the authenticity and reliability of the documents submitted by the broker for verification. The Tribunal concluded that there was no reason to doubt the documents or the broker's verification process, as per the regulation's requirements.

Issue (iii):
The third issue revolves around whether the documents submitted by the respondent customs broker can be considered as full compliance with the provisions of Regulation 10(n) read with Circular no. 09/10-CUS dated 8.04.2010. The respondent submitted a list of documents, including GSTIN ID Enquiry, KYC Form, and PAN Card, among others, to verify the correctness of the client's details. The Tribunal found that these documents were authentic and fulfilled the verification obligation under the regulation.

Issue (iv):
The final issue questions whether the Tribunal exceeded its jurisdiction by denying the report of the GSTN Authorities regarding non-existence/fictitious business place of the exporters. The Tribunal's decision was based on the verification process outlined in Regulation 10(n) and previous tribunal decisions. The Tribunal concluded that the customs broker had fulfilled its obligation by verifying the documents submitted by the exporters, and there was no reason to doubt the authenticity of the documents.

Separate Judgement:
The judgment was delivered by the High Court of Calcutta, with the Hon'ble T.S. Sivagnanam, Chief Justice, and Hon'ble Justice Hiranmay Bhattacharyya presiding. The Court dismissed the appeal, upholding the Tribunal's decision in favor of the respondent customs broker. The Court found that the broker had complied with the verification requirements of Regulation 10(n) and that the documents submitted were authentic and reliable, leading to the dismissal of the revenue's appeal.