2024 (7) TMI 19 - AT - Customs

Revocation of Customs Broker Licence - forfeiture of security deposit - levy of penalty - execution of frauds - violation of Regulation 10(n) of CBLR, 2018 - appellant had filed shipping Bills in the name of some exporters who the DGARM found suspicious - HELD THAT - The entire verification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent. 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 completed 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. It is found that the Customs Broker had not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker 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 - the impugned order cannot be sustained and hence set it aside - appeal allowed.

Summary

Issues involved:
Alleged violations of Regulation 10(n)

Detailed Analysis:

Alleged violations of Regulation 10(n):
The case involved an appeal by a licensed Customs Broker against an order revoking its license, forfeiting its security deposit, and imposing a penalty. The Commissioner held that the broker violated Regulation 10(n) of Customs Brokers Licensing Regulations (CBLR), 2018. The issue revolved around whether the appellant had indeed violated the said regulation. The allegations were based on the appellant filing shipping bills for exporters flagged as suspicious by DGARM. Physical verifications revealed that some exporters did not exist at their registered premises. The inquiry report confirmed the violation of Regulation 10(n) by the appellant. However, the Tribunal analyzed the obligations under Regulation 10(n) in detail.

The Tribunal examined the obligations imposed by Regulation 10(n) on Customs Brokers. It required verification of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), client's identity, and client's functioning at the declared address using reliable, independent, authentic documents, data, or information. The Tribunal broke down these obligations into specific requirements, such as verifying the correctness of IEC number and GSTIN, confirming the client's identity, and ensuring the client's functioning at the declared address. The Tribunal emphasized that the Customs Broker's responsibility was not to physically visit the client's premises but to verify using reliable documents, data, or information.

Regarding the verification of documents issued by government departments, the Tribunal clarified that the Customs Broker's obligation was to ensure that the documents were genuinely issued by the concerned officers, not to verify the officers' correctness. The Tribunal cited the Evidence Act, 1872, to support the presumption of genuineness of government-issued documents. The Tribunal stressed that the Customs Broker's duty was to establish the client's identity using reliable, independent, authentic documents, data, or information, which could include various official documents beyond GSTIN and IEC.

In conclusion, the Tribunal found that the Customs Broker had fulfilled its responsibilities under Regulation 10(n) and had not violated the regulation as alleged. Therefore, the impugned order revoking the license, forfeiting the security deposit, and imposing a penalty was set aside, and the appeal was allowed in favor of the appellant.

This comprehensive analysis highlights the Tribunal's detailed examination of the alleged violations of Regulation 10(n) and the Customs Broker's obligations under the regulation, leading to the decision to overturn the impugned order.