2023 (6) TMI 201 - AT - Customs

Revocation of Customs Broker License - forfeiture of Security Deposit - levy of penalty - IGST refund frauds - exporters could not be found at all physically at their registered premises - untraceable exporters - violation of Regulation 10(n) of CBLR, 2018 - HELD THAT - The Tribunal has examined the scope of these obligations in the case of M/S Anax Air Services Pvt Limited vs Commissioner of Customs, (Airport and General), New Delhi 2022 (1) TMI 115 - CESTAT NEW DELHI - It is found that physical verification of the business premises is not an obligation cast upon the CB, under Rule 10(n) of CBLR, 2018. The Tribunal in the above said Order further examined the reliability of these documents issued by various Government agencies and analyzed the scope of the Custom Broker in relying on these documents to fulfill their obligations under CBLR 2018 and held that In view of the customs RMS letting 80% to 95% of the exports without either assessing the documents or examining the records, there is a very high probability of any fraudster successfully exporting the goods (or even empty containers) and claiming the export incentives and profiting from it. It is found that the ratio of the above said order of the Tribunal is squarely applicable in this case. In the present case also, the appellant has collected the documents such as IEC, GSTIN etc. submitted by the exporter before processing their shipping bills. Later if they were not found to be existing in the said addresses, the appellant cannot be held responsible for their non existence at the address specified, as held by the Tribunal in the case of Anax Air Services - the allegation against the appellant in the impugned order that they have violated Regulation 10 (n) is not sustainable. The impugned order cannot be sustained and is set aside and the appeal is allowed.

Summary

Issues Involved:
1. Violation of Regulation 10(n) of CBLR, 2018 by the Customs Broker.
2. Revocation of Customs Broker Licence.
3. Forfeiture of Security Deposit.

Summary:

Issue 1: Violation of Regulation 10(n) of CBLR, 2018 by the Customs Broker

The Customs Broker's licence was revoked and the security deposit forfeited based on the allegation that the Customs Broker violated Regulation 10(n) of CBLR, 2018. The Revenue argued that the Customs Broker failed to verify the correctness of the Importer Exporter Code (IEC), Goods and Services Tax Identification Number (GSTIN), and the identity and functioning of the client at the declared address using reliable, independent, authentic documents, data, or information. However, the Customs Broker contended that they had complied with Regulation 10(n) by obtaining necessary documents like IEC, GSTIN, PAN, and other government-issued documents, which substantiate the existence of the exporters at the relevant time.

Issue 2: Revocation of Customs Broker Licence

The Tribunal examined the obligations of the Customs Broker under Regulation 10(n) and concluded that the Customs Broker is not required to physically verify the business premises of the client. The Customs Broker's responsibility is limited to verifying the documents issued by government agencies, which were found to be authentic and reliable. The Tribunal referenced the case of M/S Anax Air Services Pvt Limited vs Commissioner of Customs, where it was held that the Customs Broker's obligations do not extend to ensuring the correctness of the actions by the government officers who issued the documents.

Issue 3: Forfeiture of Security Deposit

The Tribunal found that the Customs Broker had fulfilled their obligations under Regulation 10(n) by obtaining and relying on documents issued by various government authorities. The Tribunal emphasized that the Customs Broker cannot be held responsible for the non-existence of exporters at the declared addresses if the documents provided were genuine and issued by government officers. Therefore, the Tribunal concluded that the Customs Broker did not violate Regulation 10(n), making the revocation of the licence and forfeiture of the security deposit unjustified.

Conclusion:

The Tribunal set aside the impugned order, stating that the Customs Broker did not violate Regulation 10(n) of CBLR, 2018. Consequently, the revocation of the licence and forfeiture of the security deposit were not sustained, and the appeal was allowed with consequential relief.