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TMI Blog2025 (3) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... son for the Customs broker to not produce it. In this case, as per the records, the appellant had not even responded to several summons issued to it. It is only during the personal hearing while passing the impugned order, the appellant stated that it had an authorisation and would be able to produce it. The Commissioner has correctly rejected this submission because Regulation 10(a) not only requires obtaining an authorisation but also producing it before the Assistant Commissioner or Deputy Commissioner when called for. Violation of Regulation 10 (d) - HELD THAT:- The presumption is that DGFT has not issued benami IECs to non-existent exporters. If DGFT is issuing benami IECs and the Customs ICES system is allowing export on the basis of such benami IECs to exporters who do not exist at all or exist only on paper, the problem is not of the appellant or any other Customs Broker but it is a deep rooted systemic problem where neither DGFT nor Customs checks the existence of the exporter/importer while allowing exports and giving out export benefits. Even a ration card which gives the poor families subsidised rations worth a few thousand rupees is not issued without verifying the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not violated Regulation 10(n).
Violation of Regulation 10(q) - HELD THAT:- After carefully considering the sequence of events as narrated in the SCN and the impugned order, there are no iota of doubt that the appellant had not cooperated at all with the investigation. The appellant's submission that it had not received the several summons issued by post and that it had received only one summon delivered by hand to Shri Ajay Dogra but the statement could not be recorded are nothing but lame excuses - the appellant had not cooperated with the investigation and thereby violated regulation 10(q) of CBLR, 2018.
Conclusion - The appellant violated Regulations 10(a) and 10(q) but had not violated Regulations 10(d) and 10(n). Applying the doctrine of proportionality, the ends of justice will meet, if the penalty of Rs. 50,000/- imposed on the appellant is upheld and the revocation of its licence and forfeiture of security deposit are set aside.
The appeal is partly allowed and the impugned order is modified to the extent that the revocation of licence and forfeiture of security deposit of the appellant are set aside but the penalty of Rs. 50,000/- imposed on the appellant is upheld. X X X X Extracts X X X X X X X X Extracts X X X X ..... Ravi Dhanwariya, I (Ravi Dhanwariya) hereby want to submit that all things were done with due diligence in the said case. All relevant supporting's were submitted for the case and therefore the inquiry report does not seems deemed fit. Hereby, wish to state that we are not satisfied with the findings of the report. You are kindly requested to consider our case and oblige." 6. A personal hearing was fixed on 11.1.2023 which was attended by the appellant Shri Ravi Dhanwariya and he contested the allegations in the SCN and asserted that he had not violated any Regulations of CBLR. On the question of not responding to the summons, he said that they had received only one summons which was received by their G card holder and although they visited the office of the investigating agency, the statement could not be recorded for some reasons. He also asserted that they had done necessary KYC checks and had also obtained authorisation from the exporter. 7. After considering the report of the inquiry officer and submissions of the appellant, the Commissioner passed Order dated 19.01.2023 Impugned order, revoking the license of the appellant, forfeiting its security deposit and imposing a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Deputy Commissioner when called for. It is not a task requiring any extraordinary effort since the Customs Broker is usually present on a daily basis or at least visits the custom house frequently because it is his place of work. The existence of the exporter or otherwise is not relevant to Regulation 10(a). The only thing relevant is if the authorisation had been obtained and produced when called for. 13. If an enquiry is being conducted into any consignment and if the Customs Broker is called and if he had obtained an authorisation from the exporter before filing the Shipping Bill, we find no reason for the Customs broker to not produce it. In this case, as per the records, the appellant had not even responded to several summons issued to it. It is only during the personal hearing while passing the impugned order, the appellant stated that it had an authorisation and would be able to produce it. The Commissioner has, in our opinion, correctly rejected this submission because Regulation 10(a) not only requires obtaining an authorisation but also producing it before the Assistant Commissioner or Deputy Commissioner when called for. We, therefore, find that the appellant had cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed rations worth a few thousand rupees is not issued without verifying the existence of the persons and their family size. Likewise, even a passport, which gives one nothing but a right to leave the country and return to it is not issued without police verification- prior to or after the issue. 19. The Revenue foregone on export incentives is a fairly large percentage of the total tax collected. If neither DGFT nor Customs is even checking the existence of the exporters before allowing exports and giving out the export benefits, it is a matter of serious concern but the Customs Broker is not responsible to nor authorised to find and correct the mistakes of DGFT and Customs. 20. We, therefore, find that the appellant had not violated Regulation 10(d). Regulation 10 (n) 21. Regulation 10(n) reads as follows: "A Customs Broker shall - (n) verify correctness of Importer Exporter Code (IEC)number, Goods and Services 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;" 22. Learned counsel for the appellant submitted that the appellant had a limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Broker to verify correctness of Importer Exporter Code (IEC)number, Goods and Services 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. This obligation can be broken down as follows : a) Verify the correctness of IEC number b) Verify the correctness of GSTIN c) Verify the identity of the client using reliable, independent, authentic documents, data or information d) Verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information 26. 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 and the GSTIN is issued by the GST officers under the Central Board of Indirect Taxes and Customs of the Government of India or under the Governments of State or Union territory. The question which arises is has the Customs Broker to satisfy himself that these documents or their copies given by the client were indeed issued by the concerned government officers or does i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. 28. The third obligation under 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. This identity can be established by independent, reliable, authentic: a) documents; b) data; or c) information 29. Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to only collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. Documents such as GSTIN, IEC and PAN card issued etc., certainly qualify as such documents. 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 aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Broker any reason to believe that they were not independent. 31. In view of the scope of the obligation under Regulation 10(n) and the facts of the case, we find that the appellant had not violated Regulation 10(n). Regulation 10(q) 32. This Regulation reads as follows: A Customs broker shall: (q) co-operate with the Customs authorities and shall join investigations promptly in the event of an inquiry against them or their employees. 33. Learned counsel for the appellant submitted that even if it is assumed that the appellant could not appear against the summons for some reasons, it does not mean that the Customs Broker had violated Regulation 10(q). The appellant had not received the summons by post and had received only one summons which was received by Shri Ajay Dogra but on the appointed day, the officer could not record the statement for some reason. 34. Learned authorised representative for the Revenue submitted that that multiple summons were issued to the appellant including one which was personally delivered to the G-Card holder. The appellant had, however, failed to appear for questioning or provide any documentary evidence. The appellant's lack of cooperation h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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