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TMI Blog2025 (4) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... se of examination, the department found that the exporters had mis-declared the quantity and value of the goods, in order to avail higher amount of drawback and other incidental export benefits. Qua M/s Shree Shyam Traders, the quantity found was 62231 sq. ft. as against the declared quantity of 1,00,000 sq. ft. In respect of M/s Shine Impex, 40089.92 sq. ft. was found as against declared quantity of 1,20,000 sq. ft. Both the Exporters were found to be non-existent. On completion of the inquiry, Show Cause Notices both dated 30.07.2021 were issued to the Exporters and Appellant. Taking note of the said Show Cause Notice ibid to be an Offence Report, the Appellant's license was suspended by the Commissioner on the allegation that Appellant had transacted the instant business neither personally nor through an authorized employee; Appellant did not advise the Exporters to comply with the provisions of Customs Act, 1962 and Rules and Regulations made there under; that Appellant did not exercise due diligence to ascertain the correctness of information which he imparted to the Exporters, that Appellant did not verify to the correctness of Importer Exporter Code Nos., GSTINs, identit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Sharma, proprietor of the firm was found unavailable at the aforesaid address. His family members had informed that Ravi Dutt Sharma had left the residence 02 years ago and they do not know anything about his whereabouts. As regards verification of address of Shri Lucky Sharma, proprietor of M/s Shine Impex, the address was found to be correct but Shri Lucky Sharma stated that he had nothing to do with M/s Shine Impex. The learned counsel relied on the following decisions wherein in identical circumstances, the revocation of Customs Broker license had been set aside. (i) Perfect Cargo & Logistics vs. Commissioner of Customs (Airport & General), New Delhi- 2021 (376) ELT 649 (Tri Del). (ii) FLE Fast Line Express Pvt Ltd. vs. Commissioner of Customs (Air Cargo & Export), New Delhi- 2021 (378) ELT 361 (Tri Del). (iii) Mohak Enterprises vs. Commissioner of Customs, Ahmedabad- (2024)15 Centax 536 (Tri Ahmd). (iv) Commissioner of Customs vs. Shiva Khurana- 2019 (367) ELT 550 (Del). Learned counsel went on to state that the revocation of license will render the Appellant without any work. He further submitted that the Custom Broker license had been suspended since August 2021 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative contended that the appellant failed to fulfil his basic function as a Customs Broker to verify the existence and functioning of his clients. Shree Shyam Traders, one of the exporters, had contacted Shri Ram Pratap, a commission agent for customs clearance work. Thereafter, the said Shri Ram Pratap entered into a verbal agreement with the Customs Broker for customs clearance on commission basis. The KYC and other documents were also received by the Customs Broker through Shri Ram Pratap only without any interaction between the Customs Broker and the exporters. Further, M/s Shree Shyam Traders was found to be non-existent whereas the Proprietor of M/s Shine Impex stated that he had nothing to do with M/s Shine Impex. As such, the question of advising "the client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, bringing the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be" does not arise. Therefore, the adjudicating authority has rightly concluded that the appellant had failed to comply with the obligations under regulation 10(d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has revoked the CB license for violations of the CBLR, 2018 provisions. 12. Before we proceed, it would be appropriate to reproduce the said regulations for ease of reference: "10. Obligations of Customs Broker.-A Customs Broker shall - (a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as a Customs Broker and produce such authorisation whenever required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; ...................................................................................................... (d) advise his client to comply with the provisions of the Act, other allied Acts and the rules and regulations thereof, and in case of non-compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; .................................................................................................................... (n) verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN), identity of his client and functioning of his c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t necessary that the appellant CB has to only conduct a physical verification or launch an investigation. As long as the appellant 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. This responsibility, again, can be fulfilled using documents or data or information so long as they are 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. We also note that there is nothing on record to show that either of these documents were fake or forged. Learned Counsel has submitted that the appellant had taken the KYC documents prior to filing of the Shipping Bills, which were verified online. He stated that Circular No. 9/2010 dated 08.04.2010 gave the list of documents acceptable for KYC purposes. In this context, he also contended that Aadhar as a KYC document had been added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t IEC and Aadhar/PAN card are issued by the Government departments. Therefore, any verification would be based on the copies of these documents submitted by the client/exporter, which can be verified independently online in the respective portals. The Department cannot expect the appellant/CB to be responsible to ensure the correctness of the actions of the Government Department which have issued these certificates. Consequently, verification of certificates as part of the obligation under Regulation 10(n) on the Customs Broker stands satisfied as long as it satisfies itself that the IEC and the Aadhar were issued by the concerned officers. We note that same view was taken in a similar case by this Tribunal in its decision in M/s Bright Clearing & Carrier Pvt Ltd., vs Commissioner of Customs (Airport & General) and Star Carriers vs Commissioner of Customs (Airport & General)- 2022 (11) TMI 935 - CESTAT NEW 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ... It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption 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." 16. Therefore, once verification of the address is complete as discussed above, the responsibility cast on the appellant under Regulation 10(n) stands fulfilled. In this regard, we further note that the Principal Bench of this Tribunal in the case of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Consequently, we hold that there the revocation of the CB license and the forfeiture of security deposit cannot be sustained. 19. We now address the submissions on the penalty of Rs 50000/- imposed by the adjudicating authority. In this context, we note that once the goods were seized by the Department, the said exporters did not come forward to claim the goods. It is a matter of concern is that when the goods were seized, no one came forward to claim the said goods, clearly evidencing the attempt of the exporters to defraud the government. This should have been a warning to the appellant CB that the export goods obviously did not belong to the exporters on paper. Though there is no collusion of the appellant CB in the attempt of the exporters to defraud the Government, the appellant CB plays a crucial role in international trade. The CB has an obligation as the appointed agent to transact Customs formalities and is responsible for their clients. Therefore, we hold that the appellant is liable for penalty. 20. In view of the above discussions, we hold as follows: (i) The revocation of CB license is set aside (ii) The forfeiture of security deposit is set aside. (iii) The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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