Customs Broker verification duties: valid GST registration and recorded advice defeated alleged regulatory breaches.

A Customs Broker was found not to have breached Regulation 10(d), because the authorization letter recorded advice to comply with customs and allied laws and no separate narration of the advice was required. No breach of Regulation 10(e) was established, as the exporter held GST registration on the relevant date and an earlier cancellation did not by itself show lack of due diligence. No breach of Regulation 10(n) was made out either, since the record showed valid GST registration and prior verification material. On these findings, revocation of the licence and forfeiture of security were unsustainable, and restoration of the licence was directed.

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Issues: (i) Whether the Customs Broker violated Regulation 10(d) of the Customs Broker Licensing Regulations, 2018 by not properly advising the client to comply with the law; (ii) whether the Customs Broker violated Regulation 10(e) by failing to exercise due diligence regarding the exporter's GST registration; (iii) whether the Customs Broker violated Regulation 10(n) by failing to verify the exporter's GST particulars and functioning at the declared address.

Issue (i): Whether the Customs Broker violated Regulation 10(d) of the Customs Broker Licensing Regulations, 2018 by not properly advising the client to comply with the law.

Analysis: The authorization letter recorded that the client had been advised by the Customs Broker to comply with the provisions of the law. The requirement under the regulation is only to advise the client to comply with the customs law and allied laws. A separate description of the scope and content of the advice in the authorization letter was not necessary.

Conclusion: The alleged violation of Regulation 10(d) was not established and the finding against the Customs Broker could not be sustained.

Issue (ii): Whether the Customs Broker violated Regulation 10(e) by failing to exercise due diligence regarding the exporter's GST registration.

Analysis: The exporter had obtained GST registration before the export transaction. Once the registration existed on the relevant date, the earlier cancellation did not by itself establish lack of due diligence on the part of the Customs Broker.

Conclusion: The alleged violation of Regulation 10(e) was not established and the finding against the Customs Broker could not be sustained.

Issue (iii): Whether the Customs Broker violated Regulation 10(n) by failing to verify the exporter's GST particulars and functioning at the declared address.

Analysis: The exporter held GST registration on the relevant date, and the record also contained a prior finding that the Customs Broker had not violated this regulation. On those facts, the alleged breach of the verification obligation was not made out.

Conclusion: The alleged violation of Regulation 10(n) was not established and the finding against the Customs Broker could not be sustained.

Final Conclusion: The revocation of the Customs Broker licence and forfeiture of security were unsustainable, and the licence was directed to be restored.

Ratio Decidendi: Where the client holds a valid GST registration on the relevant date and the broker has recorded advice and verification based on authentic documents, alleged non-compliance with customs broker verification and diligence obligations is not made out merely because of an earlier cancellation of registration.

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