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TMI Blog2023 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said provision that the CB is required to verify correctness of Importer Exporter Code (IEC) number, Goods and Service 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. There is no reference to a physical verification of premises. CB these days service clients from all over the country and expecting them to verify individual premises located anywhere in the country for its functioning, would be very difficult for the CB. It is for this reason that the Regulation 10(n), states by using reliable, independent, authentic documents, data or information. i.e. The verification would be satisfied if done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xport benefits. A penalty was imposed on the CB under Regulation 17(7) of the Customs Broker Licensing Regulations, 2018 (CBLR) as the adjudicating authority was of the view that the KYC verification was not done in a proper manner and hence they had erred in their duty as a Customs Broker. 2. I have heard Shri Derrick Sam, Advocate on behalf of the appellant and Smt. Anandalakshmi Ganesh, AR for Revenue. 3. Learned counsel Shri Derrick Sam has stated that it is not correct to say that SVARAD has erred in their duty as a Customs Broker. Regulation 10(n) of CBLR, 2018 expects a CB to verify the identity and functioning of their clients. They had done so by way of obtaining the IEC, GST documents, KYC authorization documents and export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l.) to submit that just because the goods which are exported do not corroborate with the declaration, it cannot be deemed to be a mis-declaration by CHA, hence there could be no guilt, wrong or fault on the appellant, which would merit a penalty, as the Shipping Bill document prepared by the CHA is based on the instructions / documents received from the exporter and therefore any information provided by the exporter cannot be attributable against the CHA. Further he stated that Regulation 17(7) of CBLR, 2018 has wrongly been invoked for imposing a penalty, as it specifically deals with matters relating to the suspension of a license only. 4. Smt. Anandalakshmi Ganesh, learned AR has given a written submission and reiterated the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to ascertain that the parties are genuine. Once a Customs Broker verifies the IEC, GST details etc. of an exporter, he could be said to have reasonably satisfied the requirement by verifying the documents which have been issued by Government departments. He is not further expected to enter into the role of an investigator and verify whether the documents issued by government departments and provided to him by the exporter have been issued after proper verification etc, so long as the authenticity of the said documents itself is not being challenged by the department. The fact that one out of the three premises of an exporter was found to be non-existent cannot be held against the Customs Broker as physical verification of the premises wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The punishment being of such major nature, Regulation provides for the conduct of inquiry before adjudication of the Show Cause Notice issued to the Customs Broker. The inquiry proceedings is a measure to be cautious and to give sufficient opportunity to the person whose conduct is the subject matter of the Show Cause Notice. The purpose of such inquiry is to help the adjudicating authority to derive at proper conclusion based on all materials and facts that have been collected during the inquiry. The first stage of such inquiry as laid down in the Regulation is to collect material/statements so as to give opportunity to those persons who are required or relevant to be heard. In the second stage, the Regulation provides for giving opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that there is violation of principles of natural justice. I find that this procedure has not been followed in the impugned order and it is defective to that extent. I also find that a penalty has been imposed on the appellant, for their alleged failure to do a proper KYC verification, arising from a lack of physical check of premises of the exporters as found required under Regulation (10)(n). it is seen from a plain reding of the said provision that the CB is required to verify correctness of Importer Exporter Code (IEC) number, Goods and Service 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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