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TMI Blog2024 (2) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... ng as the CB can find documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. In addition, under Regulation 10(n) the Customs Broker is required to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information - there is nothing on record to show that either of these documents were fake or forged. Therefore, once verification of the address is complete, the responsibility cast on the appellant under Regulation 10(n) stands fulfilled. The impugned order revoking the Customs Brokers license of the appellant, forfeiting their security deposit and further imposing penalty on the appellant cannot be sustained and are set aside - Appeal allowed. - HON'BLE Ms. BINU TAMTA , MEMBER ( JUDICIAL ) And HON'BLE Ms. HEMAMBIKA R. PRIYA , MEMBER ( TECHNICAL ) For the Appellant : Shri G S Arora , Advocate For the Respondent : Shri Nagender Yadav , Authorised Representative ORDER PER HEMAMBIKA R PRIYA The present appeal has been filed against the Order-in -Original 19/MK/Policy/2021 dated 10.03.2021 passed by the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the documentation. 4. The learned counsel further submitted that Regulation 10(n) of CBLR, 2018 mandates the CB to verify the identity of importer by way of independent documentation. In the present case the appellant cannot be held responsible for the exporters not being traceable as all necessary documents to ascertain the veracity of the exporter had been undertaken none of the documents is found to be false or forged. He contended that mere non- traceability of an exporter by itself does not lead to any conclusion that the appellant had violated the provisions of Regulation 10(n) of the CBLR 2018. He submitted that the appellant had taken all the necessary documents and conducted verification of the exporters based on documents, which has been held as valid in catena of judgements. The learned counsel went on to further submit that the department had also not adduced any evidence that the exporters of the appellant were not present at the address mentioned in the documents at the time of filing their shipping bills. There was no requirement under the CBLR, 2018 for a CB to make a visit to the business premises is on the exporter for verifying its functioning. 5. As r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brokers [CB] whose license was revoked by the impugned order under Customs Brokers Licensing Regulations [CBLR], 2018 and the security deposits made by him was forfeited. Penalty was also imposed on the ground that the appellant had violated Regulation 10(n) of CBLR 2018. 8. The factual matrix is that the Directorate General of Analytics and Risk Management [DGARM] of the Central Board of Indirect Taxes and Customs [CBIC] analysed their data and identified risky exporters involved in fraudulent IGST refunds. The verification of the premises was carried out by the jurisdictional GST officers, wherein exporters who were not found available at their registered premises were identified as risky. DGARM also identified the Customs Brokers who had handled these exports by these exporters and informed the details to respective jurisdictional Commissionerate. Consequent to this DGARM intimation, Show Cause Notice was issued to the appellant and Inquiry officers was appointed. After considering the reply to the SCN and the inquiry report, the Commissioner has passed the impugned order holding that the appellant had violated Regulation 10(n) of the CBLR. 9. In order to appreciate the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EW DELHI] has held as follows: 7. Of the above, (a) and (b) require verification of the documents which are issued by the Government departments. The IEC number is issued by the Director General of Foreign Trade [DGFT] and the GSTIN is issued by the GST officers under the CBIC or by officers of the Government of India or under the Governments of State or Union territory. The question which arises is whether the Customs broker is required to satisfy itself that these documents or their copies given by the client were, indeed issued by the concerned government officers OR is the Customs Broker also required to ensure that the officers have correctly issued these documents. In our considered view, Regulation 10(n) of CBLR cannot be read to mean the latter as it would imply treating the Customs Broker as one who is competent and responsible to oversee and ensure the correctness of the actions by the Government officers. It would also mean that actions by the Customs Broker under the CBLR prevail over the actions by officers under the Foreign Trade (Development and Regulation) Act, 1992 (under which the IEC is issued by DGFT) and the Central Goods and Services Tax Act (or state GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that an appropriate background check in this regard i.e., KYC, etc. would have been done by the customs authorities .. (emphasis supplied). Of course, if the Customs Broker comes to know that its client had obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In these cases, there is no doubt or evidence that the IEC and the GSTIN were issued by the officers. So, there is no violation as far as the documents are concerned. 11. Regulation 10(n) requires the Customs Broker to verify the identity of the client using reliable, independent, authentic documents, data or information. In other words, he should know who the client is and the client cannot be some fictitious person. As per the Regulation, this identity can be established by independent, reliable, authentic: a) documents; b) data; or c) information. Any of these methods can be employed by the Customs Broker to verify the identity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 in W.P. (C) 15808/2022 held as follows: 20. It is thus evident from the legal position as enunciated in Kunal Travels (supra), Customs Broker is entitled to proceed on the basis that IEC has come to be generated in favour of the exporter after appropriate background check having been conducted by the customs authorities. The further details that may have been captured and form part of IEC Registration of an importer are aspects which have to be verified by the customs authorities themselves. Moreover, it is also not the case of the Department that IEC, GSTIN, PAN Authorized Dealer Code of the exporters were not genuine. In the aforesaid backdrop the Court in Kunal Travels (supra) held that the obligation of the CHA under Section 13 (e) of the CHALR, 2004 cannot be stretched to it being obliged to undertake a further background check of the client. As such, as a Customs Broker, the petitioner cannot be held W.P. (C)15808/2022 Page 22 of 22 liable because exporters were not traceable, after the issuance of Let Export Orders and export of the goods out of the country. 13. In view of the above discussion, the impugned order revoking the Customs Brokers license of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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