Customs broker verification duties under Regulation 10(n): suspicion alone cannot justify licence revocation or penalty.

Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018 requires verification of the IEC, GSTIN, client identity and declared business address through reliable, independent and authentic material, but it does not make the customs broker responsible for verifying the correctness of government-issued records or for continuous physical surveillance of the client. A show cause notice based only on an email and data analysis, without relied-upon documents or further enquiry, was insufficient to prove breach. Suspicion could justify investigation, but not replace evidence. On the record, there was no material showing that the exporters did not exist or that the broker failed the required verification, so revocation of licence, forfeiture of security deposit and penalty were unsustainable.

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Issues: Whether the revocation of the customs broker licence, forfeiture of security deposit and imposition of penalty could be sustained on the basis of the material relied upon to allege violation of Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018.

Analysis: Regulation 10(n) requires verification of the IEC, GSTIN, identity of the client and functioning at the declared address by reliable, independent and authentic documents, data or information. The obligation does not extend to treating the customs broker as responsible for verifying the correctness of the acts of the issuing government officers or to conducting continuous physical surveillance of the client. In the present case, the show cause notice was issued without any relied upon documents and without further enquiry. The only foundation was an email based on data analysis identifying suspicious exporters. Suspicion may justify investigation, but it cannot replace evidence. The record did not contain material establishing that the exporters did not exist or that the appellant had failed to perform the mandated verification.

Conclusion: The allegation of violation of Regulation 10(n) was not proved, and the revocation, forfeiture and penalty were unsustainable.

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