Customs Broker verification duty permits reliance on genuine KYC and public documents; continuous physical surveillance is not required.
A Customs Broker meets the verification duty under the Customs Broker Licensing Regulations, 2018 when it relies on genuine and reliable KYC material, including IEC, GST registration, partnership papers, rent agreement, electricity bill and PAN details, to verify the client's identity and functioning at the declared address. Official documents issued by public authorities may be relied on, and the obligation does not extend to continuous physical surveillance of the exporter's premises. As the documents were not shown to be forged or fabricated and the broker had taken reasonable steps, the revocation of the licence was held unsustainable.
Issues: Whether the Customs Broker had complied with the obligation to verify the correctness of the IEC, GSTIN, identity of the client, and the functioning of the client at the declared address under the Customs Broker Licensing Regulations, 2018, so as to justify setting aside the revocation of its licence.
Analysis: The respondent had collected partnership documents, rent agreement, electricity bill, PAN details, and registration documents of the exporter. The IEC had been issued by the DGFT and the GST registration was valid at the relevant time. The documents furnished were not found to be forged or fabricated. Section 79 of the Indian Evidence Act, 1872 supported reliance on official documents emanating from public authorities. The relevant obligation under regulation 10(n) required verification on the basis of reliable, independent, and authentic material, but did not require continuous surveillance at the exporter's premises. The rent agreement and electricity bill could not be rejected merely because they pre-dated the exports.
Conclusion: The respondent had taken reasonable steps to verify the exporter and had not breached regulation 10(n). The revocation of the Customs Broker licence was unsustainable and the challenge to the tribunal's order failed.
Ratio Decidendi: A Customs Broker satisfies the statutory verification obligation when it relies on genuine and reliable KYC materials and public documents to verify the client's identity and functioning at the declared address; continuous physical surveillance is not required.
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