Customs Broker verification duty under Regulation 10(n) does not require physical inspection where genuine KYC documents are relied on.

Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018 requires a Customs Broker to verify the correctness of the IEC and GSTIN, the client's identity, and the client's functioning at the declared address using reliable and authentic documents or information. The obligation does not require physical inspection of every client's premises or independent verification of registrations issued by government authorities. Where the broker relies on genuine IEC, GST, PAN and KYC documents, their validity may be presumed unless they are shown to be fake or forged. A later report that the exporter was non-existent, by itself, does not establish breach of the verification duty.

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Issues: Whether the Customs Broker violated Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018 by not properly verifying the importer-exporter code, GST registration, identity of the client, and the client's functioning at the declared address, and whether the revocation of licence, forfeiture of security deposit, and penalty could be sustained.

Analysis: Regulation 10(n) requires verification of the correctness of IEC and GSTIN, identity of the client, and functioning at the declared address by using reliable, independent, authentic documents, data, or information. The obligation does not extend to physically visiting each client's premises or to overseeing the correctness of registrations issued by Government officers. Where the Customs Broker has relied on genuine documents such as GST registration, IEC, PAN, and related KYC records issued by competent authorities, it is entitled to presume their validity. A subsequent verification report stating that an exporter was non-existent does not, by itself, establish that the Customs Broker failed in its prescribed verification duty, especially when the documents relied upon were not shown to be fake or forged. The reasoning also accords with the presumption of genuineness recognised by Section 79 of the Indian Evidence Act, 1872.

Conclusion: The Customs Broker did not violate Regulation 10(n), and the revocation of licence, forfeiture of security deposit, and penalty could not be sustained.

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