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TMI Blog2021 (12) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly and thereafter, by the time the jurisdictional GST officer who prepared the report (RUD-2) went for verification, situation may have changed. If so, it is a ground for starting a thorough investigation by the officer and is not a ground to suspend/cancel the licence of the Customs Broker who processed the exports - In this case, there is no clarity whether the exporter was not available at the registered premises on the date of export or if he ceased to operate after the export. Even if the exporter has changed his address and failed to change his address in various documents issued by various authorities immediately, it cannot be held against the Customs Broker. Thus, the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n) as far as this case is exporter is concerned. In the case of Global CNI -RUD 3: HELD THAT:- There are no reason for the Revenue to have entertained the belief that the appellant Customs Broker had violated Regulation 10(n) in respect of this exporter when none of the documents obtained for KYC have even been alleged to be not genuine and no physical verification of the premises of the exporter was even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 6.11.2020, revoked the suspension under Regulation 16(2) of the Customs Brokers Licensing Regulations, 2018 [CBLR] specifically mentioning therein this order is being issued without prejudice to any other action that may be taken against the CB or any other person(s)/firm(s), etc. under the Customs Act, 1962 and Rules/Regulations framed thereunder or any other law for the time being in force for the present or any other past violations committed by them. 4. Revenue s appeal C/50389 of 2021 is filed against this order of 6.11.2020 revoking the suspension of the licence. Cross objection C/Cross/50408/2021 was filed by the Customs Broker in this appeal. While this appeal was pending in this Tribunal, a Show Cause Notice dated 24.12.2020 was issued to the Customs Broker proposing revocation of its licence, which culminated in the issue of Order in Original [Impugned order] dated 13.5.2021 revoking the licence of the Customs Broker. Therefore, Revenue s appeal has now become infructuous being supervened by the impugned order dated 13.5.2021 and needs to be disposed of and is disposed of along with the cross objections of the Customs Broker as infructuous. 5. Customs Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue in this case, therefore, falls in a narrow compass. The questions which need to be answered in this case are: a) Given the factual matrix of the case and evidence available on record, was the Commissioner correct in holding that the appellant Customs Broker has violated Regulation 10(n) of CBLR, 2018? b) If the answer to (a) above is affirmative, can the revocation of licence of the appellant customs broker be sustained? c) If the answer to (a) above is affirmative, is the forfeiture of security deposit correct? d) If the answer to (a) above is affirmative, is the imposition of penalty of ₹ 50,000/- upon the appellant customs broker correct? 9. Although both the SCN and the impugned order listed several suspected exporters whose exports the appellant is said to have handled, the Relied Upon Documents were only in respect of three firms as follows: (i) M/s Duoflex Expo India (07AAPFD 4245 F1ZF)- RUD-2 (ii) Global CNI (07AAUPZ9336Q1Z6)- RUD-3 (iii) Galaxy Impaxe (07BL PI0059B1Z3)- RUD-4 10. The finding in the impugned order that the appellant has violated Regulation 10 (n) of CBLR 2018, is based on the above three cases. This regulation r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l- the other partner of the exporter (xii) PAN card copy of Mrs. Saroj Bansal (xiii) Rent Agreement 14. The Commissioner observed in the impugned order Here, it appears that the CB failed to exercise due diligence and grossly violated the KYC guidelines of the Circular dated 8.4.2010 read with CBLR, 2018 as a number of exporters have been found untraceable. He relied on the Tribunal s order in the case of Baraskar Brothers vs Commissioner of Customs (General), Mumbai [2009 (244) ELT 562] in which it was held that there is no second opinion to the fact that the CHA is a very important component in the whole system of Customs administration, which has a major bearing on Customs revenue collection and national security. The CHAs cannot shy away from the responsibilities and obligations cast upon them by law. 15. Learned Departmental representative reiterates the above findings of the impugned order. 16. We agree that the Customs Brokers (or CHAs as they were called earlier) play an important role in the Customs administration and have to fulfil their responsibilities and obligations under the law. The law in question in this case is Regulation 10(n) of CBLR, 2018. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the customs house area .. It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e., KYC, etc. would have been done by the customs authorities .. (emphasis supplied). 18. In this case, the negative report (RUD-2) is by the jurisdictional officer who, or whose predecessor, must have issued the GST registration. Thereafter, if it is found that the exporter is not operating from that address at all and the GST registration was wrongly issued, the responsibility rests on the officer who issued the GST Registration and not the Customs Broker. The appellant relied upon the Registration Certificate and if relying upon it is an offence, issuing a registration when the firm doesn t even exist must, logically be a much graver offence and the officer who issued it must be a more serious offender. There is nothing in the RUD (the report of the jurisdictional officer) to indicate as to why and how the GST registration was issued in December 2018 when the firm does not exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 he ceased to operate after the export. Even if the exporter has changed his address and failed to change his address in various documents issued by various authorities immediately, it cannot be held against the Customs Broker. 22. We, therefore, find that the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n) as far as this case is exporter is concerned. Global CNI -RUD 3 23. The remarks of the jurisdictional officers (RUD-3) are as follows: M/s Global CNI has submitted documents for claiming refund and as per GST 2A of M/s Global CNI it has taken ITC on the invoices of M/s GDI Exim and M/s. Alomax Impex both registered at the Ground floor R 24, Gali No.1, Ramesh Park, Laxmi Nagar, Delhi 92. This office is already conducting an investigation against M/s. GDI Exim and M/s Alomax Impex wherein the proprietor of the above mentioned firms has admitted that he is engaged only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Kalyanpuri Delhi 110091 among others. The premises of M/s Suryaditya Metal and M/s G D Corporation were visited by the officers of this office and both of them were found to be non-existent. Therefore, in view of the above facts, the ITC availed by M/s Galaxy Impaxe is not genuine and thus, it is not admissible. 27. In the RUD 4, against cell 1 Found to be existing (Yes/No), the officer typed Yes. Thus, even on physical verification by the officer, this exporter was found to exist. The officer investigated further and found some of the suppliers of this exporter on the strength of whose invoices the exporter claimed ITC were found to be non-existent. By no stretch of imagination can the obligation on the Customs Broker under Regulation 10(n) be extended to verifying the existence of all the suppliers of the exporter. Learned consultant for the appellant submits that they had obtained the following documents for KYC: (i) Authorisation letter (ii) KYC letter (iii) IEC Registration (iv) GST Registration (v) AD code copy from Axis Bank (vi) PAN card copy of Mr. Irshad, the proprietor (vii) Aadhar card copy of Mr. Irshad (viii) Bank Statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We also find that this report is defective inasmuch as it does not say when the verification was carried out and when the exporter stopped operating from the premises or if the exporter never operated from the premises at all and the GST Registration and all the other documents issued by various government officers were issued carelessly or fraudulently or without any verification at all. If the exporter ceased to operate from that premises subsequent to the issue of GST Registration, the report does not say whether the exporter ceased to operate prior to the date of export or after that date. Even if the exporter had ceased to operate from that premises and had not got amendments made in the official documents issued by various authorities, this cannot be held against the appellant Customs Broker to say that it violated Regulation 10(n) of the CBLR, 2018. For these reasons, RUD-2 also does not support the case of the Revenue. 32. In view of the above, we proceed to answer the questions framed by us in paragraph 8 above. The answer to question (a) is that in the factual matrix of the case and evidence available on record, the Commissioner was not correct in holding that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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