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2023 (2) TMI 145 - AT - CustomsRevocation of customs Broker License - forfeiture of security deposit - penalty - risky exporters involved in execution of frauds and got verification done by the jurisdictional GST officers and identified exporters who could not be found at all physically at their registered premises - violation of Regulation 10(n) of the CBLR as well - 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 - verification of certificates part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as it 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. The presumption is that a certificate or registration issued by an officer or purported to have been issued by an officer was 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. Any of the three methods can be employed by the Customs Broker to verify the identity of its client. It is not necessary that it has to only conduct a physical verification or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. If a document is issued by any other person not interested in the relationship of the client and the Customs Broker, it would be independent. But it should also be reliable and authentic and not one issued by any Tom, Dick and Harry - While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs broker can also, as an alternative, fulfil this obligation by obtaining data or information. If there are documents issued by the Government officers which show that the client is functioning at the address, it would be reasonable for the Customs Broker to presume that the officer is not wrong and that the client is indeed, functioning at that address. In this case, we find that the GSTIN issued by the officers of CBIC itself shows the address of the client and the authenticity of the GSTIN is not in doubt. In fact, 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. It appears from the verification reports that the officers enquired not giving the names of the exporters but enquired if an exporter with a particular GSTIN existed in that address. People and businesses are remembered by their names and not by their GSTIN or PAN or Voter ID Card number. If anyone goes to an area and enquires, for instance, if a person with a particular PAN lives hardly anyone will be able to confirm - the conclusion in the verification reports are Non-existent exporter , NOC denied and No such firm was found existing at the said premises and therefore, IGST Refund claims made by the exporter are bogus and may be rejected. None of them state that the exporter never operated from that premises and the officer has issued GSTIN to a non-existent firm or at the time of verification, the firm was not operating from the premises but it may or may not have existed at the time of export. If the former is the case, it is also not clear why and how the officer who conducted the verification or his predecessor issued the GSTIN to a non-existent exporter. None of three RUDs make out any case to show that the Customs Broker had not fulfilled its obligation under Regulation 10(n) of CBLR 2018. The evidence available on record in the form of verification reports relied upon in the SCN are vague and in some cases, even the name of the exporter who they were enquiring about is not indicated in them - The reports state either NOC denied which is not required by any Customs Broker or exporter or that the exporters did not exist at the time of verification which does not prove that they did not exist at the time of verification or that IGST refund may be denied which is irrelevant to the present proceedings. None of the reports establish that the appellant had violated Regulation 10(n). The impugned order revoking the Customs Brokers licence of the appellant, forfeiting their security deposit and further imposing penalty on the appellants cannot be sustained and needs to be set aside. Appeal allowed.
Issues Involved:
1. Revocation of Customs Broker's license. 2. Forfeiture of security deposit. 3. Imposition of penalty under Regulation 10(n) of CBLR, 2018. 4. Scope and extent of responsibility under Regulation 10(n) of CBLR, 2018. Issue-wise Detailed Analysis: 1. Revocation of Customs Broker's License: The Customs Broker's (CB) license was revoked under Regulation 14 read with Regulations 17 and 18 of CBLR, 2018. The revocation was based on the allegation that the CB violated Regulation 10(n), which mandates the verification of the Importer Exporter Code (IEC), Goods and Services Tax Identification Number (GSTIN), identity, and functioning of the client at the declared address using reliable, independent, authentic documents, data, or information. The Tribunal examined whether the CB fulfilled these obligations and concluded that the evidence provided by the Revenue did not substantiate the claim that the CB failed to verify the required details. 2. Forfeiture of Security Deposit: The security deposit made by the CB was forfeited as part of the penalty for the alleged violation of Regulation 10(n). The Tribunal found that the CB had obtained and verified the necessary documents such as IEC, GSTIN, PAN, Aadhar, and other relevant documents. The Tribunal emphasized that the CB is not required to physically verify the client's premises and can rely on independent, reliable, and authentic documents. The Tribunal ruled that the forfeiture of the security deposit was not justified as the CB had complied with the verification requirements under Regulation 10(n). 3. Imposition of Penalty under Regulation 10(n) of CBLR, 2018: A penalty was imposed on the CB for allegedly not fulfilling the obligations under Regulation 10(n). The Tribunal analyzed the responsibilities under Regulation 10(n) and concluded that the CB is required to verify the correctness of the IEC and GSTIN through documents issued by the concerned government officers. The Tribunal noted that the CB had obtained and verified the necessary documents and that there was no evidence to prove that the CB was aware of any fraud or misrepresentation by the clients. The Tribunal held that the imposition of the penalty was not warranted as the CB had fulfilled its obligations under Regulation 10(n). 4. Scope and Extent of Responsibility under Regulation 10(n) of CBLR, 2018: The Tribunal examined the scope and extent of the CB's responsibilities under Regulation 10(n). It clarified that the CB is not required to physically inspect the premises of each client but must verify the client's identity and functioning using reliable, independent, and authentic documents, data, or information. The Tribunal referred to various judgments, including Kunal Travels vs. CC(I&G), IGI Airport, New Delhi, and Commissioner of Customs vs. Shiva Khurana, to support its interpretation. The Tribunal concluded that the CB had met the verification requirements by obtaining and verifying the necessary documents and that the responsibility of continuous surveillance on the client does not fall under Regulation 10(n). Conclusion: The Tribunal set aside the impugned order, revoking the CB's license, forfeiting the security deposit, and imposing the penalty. The appeal was allowed with consequential relief to the appellant, as the evidence did not substantiate the alleged violation of Regulation 10(n) of CBLR, 2018. The Tribunal emphasized that the CB had fulfilled its obligations by verifying the necessary documents and that the responsibility of physical verification or continuous surveillance was not mandated under Regulation 10(n).
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