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TMI Blog2023 (6) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... MMISSIONERATE VERSUS M/S CRM LOGISTICS PRIVATE LIMITED (VICE-VERSA) [ 2021 (12) TMI 253 - CESTAT NEW DELHI ] where it was held that The Customs Broker cannot be faulted for trusting the certificates issued by a government officer. It is a different matter if documents were not authentic and were either forged by the Customs Broker or the Customs Broker had reason to believe that the documents submitted to him were forged. After referring to the various documents submitted by the appellant, the Tribunal held that it is not the responsibility of the customs broker to physically go and verify the existence of each exporter at every location, let alone keep track as to whether the exporters shifted their place of business. The Tribunal held that even if the exporter changed his address, action cannot be taken against the customs broker - The show cause notice has relied upon the two relied upon documents and the report of the officer is that the exporters had taken ineligible ITC, which even if correct cannot be a factor for revoking the customs broker license of the appellant. The customs broker is also not required to physically verify the addresses of the exporters. App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the data for adversely reported cases of identified risky exporters including that of exporter who could not be verified physically (untraceable), it was revealed that certain Customs Brokers handled consignments for multiple untraceable exporters. 4. Whereas, as per the list provided by the DGARM the CB M/s Sadagati Clearing Services Pvt. Ltd. handled consignments for exporters having the following GSTIN who are untraceable: 6. Whereas, as a result of physical verification for identification of Risky Exporter by the field formations of the following exporters has been received in some cases which is elaborated as below:- (i) M/s Ridhi Sidhi Traders (07AAVFR6825K1ZE): Remarks of jurisdictional officer (RUD-2): Exporter does not appear to be bonafide. (ii) M/s Saturn Expotrade (07ADHFS9621F1ZW): Remarks of jurisdictional officer (RUD-3): Exporter does not appear to be bonafide. 7. From the above remarks/verification report, it appears that during verification/ identification of Risky Exporters, they have found non-existent and the CB has handled the export consignment of the above exporters, resulting there is a possible collusion and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Regulation 18 and Regulation 20 of erstwhile CBLR 2013). 4. The appellant participated in the proceedings before the enquiry officer who submitted a report and the relevant portion of the report is reproduced below:- 25.4 I find that the CB during the Inquiry proceedings have not placed on record that they have exercised due diligence to ascertain the genuineness of the exporters and failed to justify the custom clearance of the said risky exporters under the CBLR, 2018. I also find from the sources that directors of the CB were also involved in the bogus export in the name of different dummy firms and controller in some cases for getting extra benefits and hence, in the instant cases knowingly had also not followed the Regulations of the CBLR, 2018. Conclusion: 26. In view of the facts discussed above, I find that M/s Sadagati Clearing Services Pvt. Ltd., A-13, Okhla Industrial Area, Phase-I, New Delhi 110020, holder of CB License No. R- 05/DEL/CUS/2016 (PAN: AAVCS2245K) valid upto 26.05.2025, have failed to comply with the Regulation 10 (n) of CBLR, 2018 and are liable for penal action under Regulation read with Regulations 17 18 of CBLR, 2018, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CB in the instant case. Therefore, I find that CB has not shown due diligence while verifying features and obtaining the documents as per KYC norms. If CB had done verification of present and permanent address in full, complete and correct and principal place of Business, which is to be verified by the CB, huge government revenue could have been saved. 26.5 Thus, I find that the CB has failed to fulfil his obligation cast upon him in terms of provisions laid down under Regulation 10(n) of CBLR, 2018 read with the Circular 09/2010- Customs dated 08.04.2010. (emphasis supplied) 6. Shri Priyadarshi Manish, learned counsel for the appellant submitted that all the documents as per the Circular dated 08.04.2010 were taken by the appellant from the respective exporters and, therefore there was no violation of regulation 10 (n) of the Customs Broker Licensing Regulation 2018, 2018 regulations. Learned counsel submitted that there is no requirement under regulation 10(n) that the customs broker should physically verify the addresses of the exporters/importers. In fact, a customs broker is only required to verify the correctness of the Importer Exporter Code (IEC) number, Good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 15.05.2020 was sent to assessee by this office to their registered email ID to provide Annexure-A along with relevant documents for verification. However, no response to the mail has been received in this office till date. 4. On perusal of documents downloaded from AIO system, it was found that assessee obtained GST registration in July, 2017. The assessee is under the supervision of the State Present registration status of assessee is cancelled . GSTR-1. GSTR-3B and GSTR-2A returns of the assessee were obtained from AIO and analyzed. 4.1. The assessee has filed-GSTR-1M for the period from April, 2018 to March, 2019 only. Out of the returns filed, except for May, 2018, all other filed returns are nil returns. 4.4. In the above context, it appears that the assessee has availed major ITC only in the month of May, 2018. During the above period, assessee appears to have availed excess ITC amounting to Rs. 66,34,954/-. No GSTR-3B and GSTR-1M returns have been filed after June, 2019. 5. Further, no details are available on E-WAY Bill portal in respect of e-way bills received or generated by the assessee. 6. Further, the suppliers of the assessee as reflecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it appears that the assessee has availed excess ITC amounting to Rs. 64,58,030/- (primarily in GSTR-3B of Apr,2018). Further, the assessee appeared to have shown noticeable business transactions only in the month of March-Apr, 2018 as no significant transactions have been reported prior to and after that period. (emphasis supplied) 12. The entire allegation against the appellant is based on the two reports of the jurisdictional officer that the exporters were found to be non-existing at the registered premises and that the Input Tax Credit, ITC was not admissible to the exporters. The aforesaid two reports accept that the two exporters had obtained GST registration in July 2017 and had been filing the returns. It also mentions that they have fraudulently obtained ITC. For fault of the exporters, the appellant cannot be blamed unless there is evidence to establish that the appellant had colluded with the exporters but evidence has not been placed. 13. These two issues were examined at length by a Division Bench of the Tribunal in M/s CRM Logistics Private Limited Vs. Commissioner of Customs, New Delhi (Airport and General), Customs Appeal No. 50857 of 2021 decided o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard i.e., KYC, etc. would have been done by the customs authorities .. (emphasis supplied) 14. After referring to the various documents submitted by the appellant, the Tribunal held that it is not the responsibility of the customs broker to physically go and verify the existence of each exporter at every location, let alone keep track as to whether the exporters shifted their place of business. The Tribunal held that even if the exporter changed his address, action cannot be taken against the customs broker. 21. It is possible that all the authorities who issued the above documents had issued them 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. It is not the responsibility of the Customs Broker to physically go to and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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