2024 (6) TMI 140 - AT - Customs

Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - risky exporters involved in frauds - exporters not found at all physically at their registered premises - non-compliance of Regulation 10(d) (e) (n) of CBLR 2018. Violation of Regulations 10(d) - exporter Arise was found to be non-existent on verification - HELD THAT - No inference can be drawn that the appellant had not advised Arise to comply with the provisions of the Customs Act or other allied Acts or rules or regulations or that it was aware of the violation of any Acts or Rules by Arise and had not brought it to the notice of the Assistant Commissioner or Deputy Commissioner - In fact the appellant as the Customs Broker had neither any role or authority or responsibility with respect to the GST registration of Arise. It is between Arise which had applied for the GST registration and the officer who issued the registration. If the entity was non-existent and the officer issued a benami GST registration to a non-existent entity the responsibility for that rests squarely on the officer who issued such registration and the entity which applied for and obtained such benami registration. Once a GST registration is issued by the department the appellant had no choice but to accept it. The appellant had no authority to sit in judgment over the GST registration issued by the department. Neither the fact that benami registration was issued by the officer nor that it was subsequently cancelled ab initio makes any difference. The appellant as the Customs Broker had no choice but to assume that was done by the department was correct and proceed - The Customs broker has no responsibility to either advise its clients about compliance with any other law or compliance with respect to any other import or export consignment which it was not dealing with - The appellant had clearly not violated Regulation 10(d). Violation of Regulation 10(n) - HELD THAT - Regulation 10(n) requires the Customs Broker to verify correctness of Importer Exporter Code (IEC) number Goods and Services Tax Identification Number (GSTIN) identity of his client and functioning of his client at the declared address by using reliable independent authentic documents data or information - It is possible that all the authorities who issued the above documents had issued them correctly and thereafter by the time of verification situation may have changed. It is not the responsibility of the Customs Broker to physically go to and verify the existence of each exporter in every location let alone keeping track if the exporter has moved from that address. In this case there is no clarity whether the exporter was not available at the registered premises on the date of export or if it ceased to operate after the export. Even if the exporter had changed its addresses and failed to intimate it cannot be held against the Customs Broker. The verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were indeed issued by the concerned officers. This can be done through online verification comparing with the original documents etc. and does not require an investigation into the documents by the Customs Broker. Therefore the appellant was correct in verifying the GSTIN issued by the department on the GST portal. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine. 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 as discussed in the above paragraph 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 appellant Customs Broker did not fail in discharging its responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporter was found to not exist during subsequent verification by the officers. The impugned order cannot be sustained and therefore set it aside - Appeal allowed.

Summary

Issues Involved:

1. Violation of Regulations 10(d) and 10(n) of CBLR, 2018.
2. Revocation of Customs Broker Licence.
3. Forfeiture of Security Deposit.
4. Imposition of Penalty of Rs. 50,000.

Summary:

1. Violation of Regulations 10(d) and 10(n) of CBLR, 2018:

The appellant, M/s Pushpanjali Logistics, was alleged to have violated Regulations 10(d) and 10(n) of CBLR, 2018, for filing shipping bills for non-existent exporter M/s Arise Enterprises. The Commissioner concluded that the appellant failed to advise its client to comply with the provisions of the Act and did not verify the correctness of the client's GSTIN and address. However, the Tribunal found that the appellant had no responsibility for the GST registration of the exporter and had verified the documents as required. The Tribunal held that the appellant did not violate Regulation 10(d) as there was no evidence of non-compliance brought to the Customs Broker's notice. Similarly, the Tribunal found no violation of Regulation 10(n) as the appellant had verified the client's identity and address using reliable documents like GSTIN and IEC.

2. Revocation of Customs Broker Licence:

The Tribunal concluded that the revocation of the appellant's Customs Broker Licence was not justified. The evidence did not support the Commissioner's finding that the appellant violated Regulations 10(d) and 10(n).

3. Forfeiture of Security Deposit:

Since the appellant was found not to have violated the regulations, the forfeiture of the security deposit was also deemed incorrect by the Tribunal.

4. Imposition of Penalty of Rs. 50,000:

The imposition of a penalty of Rs. 50,000 was not upheld as the Tribunal found no violation of the regulations by the appellant.

Conclusion:

The Tribunal set aside the impugned order, allowing the appeal with consequential relief to the appellant. The judgment emphasized that the Customs Broker's responsibility does not extend to verifying the correctness of documents issued by government officers and that the broker is not required to physically verify the client's premises. The Tribunal reiterated that the responsibility of the Customs Broker under Regulation 10(n) is limited to verifying documents, data, or information that are reliable, independent, and authentic.