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TMI Blog2022 (11) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... sued the documents. On examination of order in the case of Millenium Express Cargo it is found that, that was a case where the cigarettes were smuggled concealed in a consignment of induction cookers and the Bill of Entry was filed by the CHA whose licence was then revoked for violation of Regulations 13(e) and 13(o) of CHA licensing Regulations, 2004. Of these, 13(o) is pari materia with CBLR 10(n) under consideration in this case. In the case of Millenium express cargo, the CHA has not even ever claimed that it had verified the existence of the importer at the given address - Millenium express Cargo does not support the case of the Revenue since there is nothing on record to show that the exporters did not exist at the premises at the time of export or that the appellants were aware about the non-existence of the exporters when they filed the Shipping Bills. In fact, there is not even an assertion by the Revenue that on the day the Shipping Bills were filed the exporters did not exist at the premises. Documents issued by various Government officers - HELD THAT:- It is common knowledge that in designing schemes for issuing registrations, certificates or providing incentive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record in the form of verification reports relied upon in the SCNs are vague and in some cases, even the name of the exporter who they were enquiring about is not indicated in them - the impugned orders revoking the Customs Brokers licences of the appellants forfeiting their security deposits and further imposing penalty on the appellants cannot be sustained and need to be set aside - Appeal allowed. - CUSTOMS APPEAL NO. 51658 OF 2021 with CUSTOMS APPEAL NO. 51665 OF 2021 - FINAL ORDER NO. 51083-51084/2022 - Dated:- 18-11-2022 - MR. DILIP GUPTA, PRESIDENT AND MR. P. V. SUBBA RAO, MEMBER (TECHNICAL) Shri L B Yadav, Consultant - for the Appellant Shri Rakesh Kumar, Authorised Representative for the Department ORDER We have heard Shri L B Yadav, learned consultant for the appellants, Shri Nagendra Yadav and Shri Rakesh Kumar, learned authorised representatives for the Revenue and perused the records. Both these appeals are on identical issues and hence they are being disposed of together. 2. The appellants are Customs Brokers [CB] whose licences were revoked by the impugned orders under of Customs Brokers Licensing Regulations [ CBLR ], 2018 and the security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised representatives for the Revenue, the Customs Broker is an agent of the Custom House and has to ensure that the interests of the importer/exporter as well as the Revenue are protected. It is not sufficient for the Customs broker to merely obtain two KYC documents. The Regulation also requires the Customs Broker to verify identity of his client and functioning of his client at the declared address. If the Customs Broker does not fulfill this responsibility, it will invite action under the CBLR, 2018. They rely on the following decisions: a) Commissioner of Customs versus K M Ganatra Co [2016(332) ELT 15(SC)] b) Baraskar Brothers versus Commissioner of Customs (General) Mumbai [2009(244) ELT 562(Tri-Mumbai)] c) Sky Sea Services versus Commissioner of Customs (General) Mumbai [2022(5) TMI 1050- CESTAT Mumbai] d) Jasjeet Singh Marwah versus Union Of India and others [2009(2)TMI 57-Delhi High Court] 6. We have considered the submissions on both sides. 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 hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat every certificate which is purported to be issued by the Government officer to be genuine. It reads as follows: 79. Presumption as to genuineness of certified copies . The Court shall presume to be genuine every document purporting to be a certificate, certified copy or other document, which is by Law declared to be admissible as evidence of any particular fact and which purports to be duly certified by any officer of the Central Government or of a State Government, or by any officer in the State of Jammu and Kashmir who is duly authorized thereto by the Central Government. Provided that such document is substantially in the form and purports to be executed in the manner directed by law in that behalf. The Court shall also presume that any officer by whom any such document purports to be signed or certified, held, when he signed it, the official character which he claims in such paper. 8. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers have issued the certificate or registration correctly. It has been held by the High Court of Delhi in the case of Kunal Travels [ 2017 (3) TMI 1494- Delhi High Court ] that the CHA is not an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certainly qualify as independent as none of these departments have any interest in the relationship between the client and the Customs Broker and these documents are presumed to be authentic and reliable having been issued by the Government officers. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or even private parties (so long as they qualify as independent, reliable and authentic) could meet this requirement. While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs broker can also, as an alternative, fulfill this obligation by obtaining data or information. In these cases, we are fully satisfied that the appellants have fulfilled this part of the obligation under Regulation 10(n). 11. The fourth and the last obligation under Regulation 10(n) requires the Customs Broker to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information. This responsibility, again, can be fulfilled using documents or data or information so long as they are reliable, independent and authentic. Nothing in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reason to believe that they were not independent. 12. We further note that 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 paragraphs, 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. Of course, if the Customs Broker was aware that the client has moved and continues to file documents with the wrong address, it is a different matter. 13. In these appeals, the negative reports were issued by the jurisdictional GST officers who, or whose predecessors or colleagues, must have issued the GST registration. Thereafter, if it is found that the exporter was not operating from that address at all and the GST registration was wrongly issued, the responsibility rests on the officers who issued the GST Registration and not the Customs Broker. This wisdom in hindsight of the officers that the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBLR, 2018 which obligation does not get obliterated or diluted by the fact that officers of various departments have issued the documents. 18. Learned Authorized Representatives further submit that the case of Kunal Travels [2017 (3) TMI 1494- Delhi High Court] cannot come to the aid of the appellant as that was issued in the context of the erstwhile Custom House Agents Licensing Regulations,2004 which, as it stood during the relevant time, did not have an obligation on the Custom House Agent similar to the one in Regulation 10(n) of CBLR 2018. A provision similar to Regulation 10(n) of CBLR, 2018 was later introduced as Regulation 13(o) of CHA Licensing Regulations, 2004 which was considered in the case of Millenium Express Cargo [2017 (346) ELT 471 (Tri- Del)] by this Tribunal which decision was upheld by the High Court of Delhi. The ratio of this order should apply to this case. 19. We have examined the order in the case of Millenium Express Cargo and find that, that was a case where the cigarettes were smuggled concealed in a consignment of induction cookers and the Bill of Entry was filed by the CHA whose licence was then revoked for violation of Regulations 13(e) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the satisfaction of the CHA will suffice. Thus the appellant was required to inter alia verify present and permanent address in full, complete and correct which the appellant did not do. Merely because the appellant obtained documents as per Column 4 of the above table does not tantamount to fulfilment of requirement of Column 3 relating to features to be verified because if that was so, then there was no need to have Column 3. As seen from Regulation 13(o) quoted above, the Customs House Agent is obligated to inter alia verify antecedent, correctness of Importer Exporter Code, identity of the importer and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. The appellant has not even claimed that it had ever verified the existence of the importer at the given address. Obviously, the appellant failed to fulfil the requirement of Regulation 13(o) ibid. 20. Millenium express Cargo does not support the case of the Revenue since there is nothing on record to show that the exporters did not exist at the premises at the time of export or that the appellants were aware about the non-existence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 23. However , the burden of this very liberal, open, scheme and its potential misuse cannot be put at the doorstep of a Customs Broker. Just as the officer s responsibility ends with doing his part of the job (which may be issuing a registration without physical verification or allowing exports without assessing the documents or examining the goods), the Customs Broker s responsibility ends with fulfilling his responsibilities under Regulation 10 of the CBLR, 2018. In dispute in these appeals is CBLR 10(n) which, as we have discussed above, does not require any physical verification of the address of the exporter/importer. 24. Learned Authorized representatives for the Revenue relied on the decision of a coordinate bench of this Tribunal in Baraskar Brothers that there is an obligation on the Customs Broker to conduct a physical verification. Firstly, there is nothing in the Regulation 10(n) about physical verification. It require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18.6.2021 held that the appellant has taken necessary documents as per the KYC as per CBLR 2018 but failed to verify the actual functioning of the exporter concerned and has not satisfied the inquiry officer that they had made all possible efforts to verify the genuineness of the exporter. The appellant has been held to have violated Regulation 10(n) of CBLR 2018 and hence his licence was revoked under Regulations 14 18 read with Regulation 17(7) of CBLR 2018 and his security deposit of Rs. 5,00,000/- was forfeited and a penalty of Rs. 50,000/- was imposed on the appellant. 29. It appears from the verification reports that in two cases, the officers enquired not by 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 would confirm. Interestingly, the reports also indicate that the premises were rented while at the same time indicating that the exporter was non-existent. It is not clear who, according to the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Kavya Impex (07AIMPL4955B1Z7)- RUD-4: This report indicates that the exporter was not found to exist at the premises but further specifies the total value of exports within 9 months and older than 9 months and also gives details of remittances received. It further gives the details of the bank account of the exporter and month wise transactions for a few months. It also confirms that physical copy of the PAN and IEC were provided. 33. Inquiry Report dated 26.3.2021 held that the appellant has violated provisions of Regulation 10(n) of CBLR, 2018 34. Impugned order dated 22.6.2021 revoked the licence, directed the licence to be surrendered immediately along with all F, G H cards issued, forfeited security deposit of Rs. 50,000 and imposed penalty of Rs. 50,000/-. 35. Two verification reports in respect of this appellant state that the exporter is not bonafide . The third verification is self contradictory inasmuch as it, on the one hand, states that the exporter does not exist at the place and on the other hand confirms that physical copies of PAN and IEC were provided during verification. It is not clear who has provided these documents if the exporter did not exist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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