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TMI Blog2024 (9) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... sition of penalty of Rs. 50,000/- proportionate to the violation?" 4. The facts which led to this case are that the Directorate General of Analytics and Risk Management [DGARM] of the Central Board of Excise and Customs [CBIC] analysed data, identified suspicious registrants under the Goods and Services Tax [GST] and got a physical verification of some of these suspected registrants and found that they did not exist at all at the places of their business. 5. DGARM also found that some of these GST registrants also had obtained importer exporter codes [IEC] from the Directorate General of Foreign Trade [DGFT] and actually exported goods. DGARM further identified whi ch Customs Brokers had processed the exports of such exporters and conveyed the data to the concerned commissioners. Among the Customs Brokers so identified by the DGARM was the appellant. 6. Based on the information received from DGARM, the Commissioner (Airport & General) New Delhi, initially suspended the licence of the appellant on 25.8.2020 and gave a po decisional hearing to the appellant on 7.9.2020 and thereafter, issued Show Cause Notice [SCN] dated 7.12.2020 and appointed an inquiry officer. The Inquiry offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that several GST registrants did not exist and did not operate from their business addresses at all. It is undisputed that their registrations were issued by the very department which initiated the investigation. Thus, the irresistible conclusion is that if the DGARM is correct, then the department issued several benami (pseudonymous) GSTIN registrations to several entities which did not exist at all. 10. These allegedly non-existent entities were also issued importer exporter codes (IEC) by the DGFT. Thus, if the DGARM is correct, DGFT had issued benami IECs. 11. As far as the appellant is concerned, there were thirty four exporters who, the DGARM suspected to be non-existent but verification was done only in respect of five. The verification reports were enclosed as RUD I, II, III, IV and V to the SCN. 12. The verification reports in respect of all five exporters were reproduced in paragraph 6 of the SCN as follows: "(i) M/s RETROVIS FASHION (P) LIMITED (07AAICR6589A1Z5): Remarks of jurisdiction officer: "On physical verification, the assesse was found non-existent. Further, letter dated 06.02.2020 written to the assesse to submit Annexure-A as per Circular No. 131/1/2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: Non-existent. Assessee has filed the 3B I return from July 2017 to August 2019 only and no value has been shown in GSTR-I return which were filed for the period April 2019 to August 2019 only. 100% ITC is utilized for the payment of GST liability. For the E-way bill of inward supplies, these were ITC amounting of Rs. 5,16,124/- during the period after August 2019 for which no 3B return had been filed. Therefore detailed investigation is required as the exporter seems suspicious." 13. Clearly, none of the five reports say that the exporters did not exist at the time of export. All that they say is that they did not exist when the officer verified. The remarks are that the exporters were non-existent and/or not bonafide. 14. It is not clear if the exporters existed before and had ceased to exist by the time of verification and when they ceased to exist. It is also not clear that if the entities never existed, why the jurisdictional officer had issued the GSTIN to such a benami firm in the first place. 15. Thus, even taking the reports at their face value, they do not show that the exporters never existed or had not existed at the time exports had taken place. There was no basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments, etc. and does not require an investigation into the documents by the Customs Broker. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. Customs formations are only in a few places while exporters or importers could be from any part of the country and they hire the services of the Customs Brokers. Besides the fact that no such obligation is in Regulation 10(n), it will be extremely difficult, if not, totally impossible, for the Customs Broker to physically visit the premises of each of its clients for verification. The Regulation, in fact, gives the option of verifying using documents, data or information. If there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled. If there are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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