Customs broker license revocation overturned after tribunal finds no liability for client's GST registration validity under CBLR 2018 Regulations 10(d) and 10(n)

CESTAT New Delhi allowed the appeal of a customs broker whose license was revoked for alleged violations of CBLR 2018 Regulations 10(d) and 10(n). The broker was penalized after an exporter was found non-existent at registered premises during verification. The tribunal held that the broker had no responsibility for GST registration validity issued by authorities and must accept departmental registrations as correct. Regarding verification obligations under Regulation 10(n), the tribunal ruled that document verification through online portals suffices; physical verification of each client's premises is not required. The broker cannot be held liable for subsequent changes in client operations or addresses. The license revocation and penalty were set aside.

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Issues Involved:

1. Violation of Regulations 10(d) and 10(n) of CBLR, 2018.
2. Revocation of Customs Broker Licence.
3. Forfeiture of Security Deposit.
4. Imposition of Penalty of Rs. 50,000.

Summary:

1. Violation of Regulations 10(d) and 10(n) of CBLR, 2018:

The appellant, M/s Pushpanjali Logistics, was alleged to have violated Regulations 10(d) and 10(n) of CBLR, 2018, for filing shipping bills for non-existent exporter M/s Arise Enterprises. The Commissioner concluded that the appellant failed to advise its client to comply with the provisions of the Act and did not verify the correctness of the client's GSTIN and address. However, the Tribunal found that the appellant had no responsibility for the GST registration of the exporter and had verified the documents as required. The Tribunal held that the appellant did not violate Regulation 10(d) as there was no evidence of non-compliance brought to the Customs Broker's notice. Similarly, the Tribunal found no violation of Regulation 10(n) as the appellant had verified the client's identity and address using reliable documents like GSTIN and IEC.

2. Revocation of Customs Broker Licence:

The Tribunal concluded that the revocation of the appellant's Customs Broker Licence was not justified. The evidence did not support the Commissioner's finding that the appellant violated Regulations 10(d) and 10(n).

3. Forfeiture of Security Deposit:

Since the appellant was found not to have violated the regulations, the forfeiture of the security deposit was also deemed incorrect by the Tribunal.

4. Imposition of Penalty of Rs. 50,000:

The imposition of a penalty of Rs. 50,000 was not upheld as the Tribunal found no violation of the regulations by the appellant.

Conclusion:

The Tribunal set aside the impugned order, allowing the appeal with consequential relief to the appellant. The judgment emphasized that the Customs Broker's responsibility does not extend to verifying the correctness of documents issued by government officers and that the broker is not required to physically verify the client's premises. The Tribunal reiterated that the responsibility of the Customs Broker under Regulation 10(n) is limited to verifying documents, data, or information that are reliable, independent, and authentic.

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