TaxTMI 
TaxTMI 
2022 (1) TMI 115
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.... "43. I have also gone through the case laws cited by the advocate and found that the facts of these cited cases are different from the present case. From all the facts and circumstances narrated above, I find that the CB has violated the Regulation 10(n) of CBLR 2018 and hence, I pass the following order: ORDER (i) In exercise of powers conferred in terms of Regulation 14 & 18 read with Regulation 17(7) of CBLR, 2018) (erstwhile Regulation 18 &22 read with Regulation 20(7) of CBLR, 2013), I hereby revoke the CB License No. R-5/93 (PAN: AAACA1708J) valid upto 12.11.2027 issued to M/s. Anax Air Services Pvt. Ltd. Office no. 104, 1st Floor, Westend Mall, District Centre, Janakpuri, New Delhi 110058; (ii) I order for forfeiture of the amount of security deposit of Rs. 50,000/- (Rupees Fifty thousand only) furnished by them; (iii) I impose penalty of Rs. 50,000/- on M/s Anax Air Services Pvt. Ltd. 44. This order is being issued without prejudice to any other action that may be taken against the CB or any other persons(s)/firm(s) etc. under the provisions of the Customs Act, 1962 and Rules/Regulations framed there under or any other law for the tim....
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....roker be sustained? c) If the answer to (a) above is affirmative, is the forfeiture of security deposit correct? d) If the answer to (a) above is affirmative, is the imposition of penalty of Rs. 50,000/- upon the appellant customs broker correct? 7. Although both the SCN and the impugned order listed several suspect exporters whose exports the appellant is said to have handled, the Relied Upon Documents [RUD] in the SCN were only in respect of three firms as follows: (i) M/s XIAEL Exports (P) Ltd. (07AAACX3158K1Z3)- RUD-2 (ii) M/s Fab Impex Traders (07AATP19429G2Z6)- RUD-3 (iii) M/s. Dayma International (07BKNPV0720L1ZR)- RUD-4 8. The finding recorded in paragraph 34 of the impugned order is that the appellant handled exports in respect of several exporters listed in paragraph 4 of the impugned order who are untraceable and therefore, the appellant has violated Regulation 10 (n) of CBLR 2018. In paragraph 4, a table with a large number of exporters is given who are said to be non-existent but the Show Cause Notice has included as supporting evidence, RUDs in the form of verification reports only in respect of the above three export....
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....analysis GSTR-1 (Tax payable) Rs. 30,65,497 GSTR 3B (Tax paid through cash) Rs. 7 GSTR 3B (Tax paid through ITC) Rs. 30, 65, 490 GSTR 3B (Tax paid) Rs. 30, 65,497 Share of ITC in tax paid- 100% ITC analysis GSTR 2A (ITC availability) Rs. 30,78,423 GSTR 3B (ITC availed) Rs. 30,65,490 Remarks: The assessee is non-existent. The assessee is paying 100% of the liability through ITC. Has filed GSTR 1 and GSTR 3B only for the months of Feb and Mar 2019. The registration of the assessee has been cancelled by the department as the assessee was found to be non-operational. The L1 supplier of the assessee falls in the jurisdiction of Delhi East Commissionerate, hence could not be verified. The assessee seems to be doubtful. Further scrutiny is required.Signed by Siddiqui Assistant Commissioner Signed by Ranjan Khanna Commissioner" 13. A perusal of the three RUDs shows that the exporters were issued GST Registration by the Department. In two cases, the exporters were filing GST returns also to the department while in the other case, this aspect was not indicated either way in the report. In one case, the GST paid by the exporter was also analysed and it was ....
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....e exporter (ii) KYC letter (iii) GST Registration Copy (iv) IEC Registration Copy (v) Company PAN card of the exporter (vi) Electricity bill copy (vii) PAN Cards of the firms and the partners (viii) Canceled cheques (ix) Rent Agreement 16. The Commissioner observed in paragraph 18 of the impugned order "Whereas as per Annexure to the CBIC Circular no. 9/2010- Customs dated 8.4.2010, it appears that CB has not taken the documents as prescribed in the Annexure to the said circular, however, taken certain other documents such as IEC, PAN, Aadhar, Electricity bill, Rent Agreement, AD code letter from the bank, Rent Agreement, GST Registration, KYC form, etc. Among these documents certain documents are issued by the Government, which substantiate the existence of the exporter at the relevant time. 17. In this regard, we find that paragraph 6 of the Circular requires the client to furnish to the CHA, a photograph of himself/ herself, in the case of an individual and those of the authorised signatory in respect of other forms of organisation such as company/trusts, etc. and any two of the listed documents in the....
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....o indicate that the exporters were not eligible for the input tax credit (ITC) under the GST. As far as the admissibility of ITC is concerned, nothing in the CBLR, 2018, even remotely suggests that it is the responsibility of the Customs Broker to ensure its admissibility or that if inadmissible ITC is taken and thereafter a refund of it is claimed, the Customs Broker is responsible. As per the CGST/IGST/SGST Act, the assessee takes ITC and the officers can verify and if necessary, take appropriate action. The Customs Broker has no locus standi or power to verify the ITC taken. The Customs Broker is not an officer with the power to verify the ITC. Therefore, for any ITC wrongly taken by any assessee, the Customs Broker is in no way responsible. 22. We now proceed to examine the scope of the obligations of the Customs Broker under Regulation 10(n). It requires the Customs Broker to verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN),identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. This obligation can be broken down as fo....
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....enuineness of certified copies. The Court shall presume to be genuine every document purporting to be a certificate, certified copy or other document, which is by Law declared to be admissible as evidence of any particular fact and which purports to be duly certified by any officer of the Central Government or of a State Government, or by any officer in the State of Jammu and Kashmir who is duly authorized thereto by the Central Government. Provided that such document is substantially in the form and purports to be executed in the manner directed by law in that behalf. The Court shall also presume that any officer by whom any such document purports to be signed or certified, held, when he signed it, the official character which he claims in such paper." 24. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers have correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. How....
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.... Regulation 10(n) requires the Customs Broker to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information. This responsibility, again, can be fulfilled using documents or data or information so long as it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. Customs formations are only in a few places while exporters or importers could be from any part of the country and they hire the services of the Customs Brokers. Besides the fact that no such obligation is in Regulation 10(n), it will be extremely difficult, if not, totally impossible, for the Customs Broker to physically visit the premises of each of its clients for verification. The Regulation, in fact, gives the option of verifying using documents, data or information. If there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled. If there are documents issued by the Govern....
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.... customs house area........ It would be far too onerous to expect the CHA to inquire into and verify the genuineness of the IE code given to it by a client for each import/export transaction. When such code is mentioned, there is a presumption that an appropriate background check in this regard i.e., KYC, etc. would have been done by the customs authorities....." (emphasis supplied)." 30. In this case, the negative reports were issued by the jurisdictional GST officers who, or whose predecessors or colleagues, must have issued the GST registration. Thereafter, if it is found that the exporter is not operating from that address at all and the GST registration was wrongly issued, the responsibility rests on the officer who issued the GST Registration and not the Customs Broker. The wisdom in hindsight of the officer that the GSTIN was wrongly issued at that address cannot be used against the Customs Broker. The appellant relied upon the GST Registration Certificates and if relying on them is an offence, issuing them when the firms didn't even exist must, logically be a much graver offence and the officers who issued them must be more serious offenders. There is nothing in the RUDs....
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....ist and are functioning from these premises but the Customs Broker is so mandated by Regulation 10(n) of the CBLR, 2018 which obligation does not get obliterated or diluted by the fact that officers of various departments have issued the documents. 35. He further submits that the case of Kunal Travels [2017 (3) TMI 1494- Delhi High Court ] cannot come to the aid of the appellant as that was issued in the context of the erstwhile Custom House Agents Licensing Regulations,2004 which, as it stood during the relevant time, did not have an obligation on the Custom House Agent similar to the one in Regulation 10(n) of CBLR 2018. A provision similar to Regulation 10(n) of CBLR, 2018 was later introduced as Regulation 13(o) of CHA Licensing Regulations, 2004 which was considered in the case of Millenium Express Cargo [2017 (346) ELT 471 (Tri- Del) ] by this Tribunal which decision was upheld by the High Court of Delhi. The ratio of this order should apply to this case. 36. We have examined the order in the case of Millenium Express Cargo, and find that in that was a case where the cigarettes were smuggled concealed in a consignment of induction cookers and the Bill of Entry was filed....
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....s required to inter alia verify present and permanent address in full, complete and correct which the appellant did not do. Merely because the appellant obtained documents as per Column 4 of the above table does not tantamount to fulfilment of requirement of Column 3 relating to features to be verified because if that was so, then there was no need to have Column 3. As seen from Regulation 13(o) quoted above, the Customs House Agent is obligated to inter alia verify antecedent, correctness of Importer Exporter Code, identity of the importer and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. The appellant has not even claimed that it had ever verified the existence of the importer at the given address. Obviously, the appellant failed to fulfil the requirement of Regulation 13(o) ibid. 37. Millenium express Cargo does not support the case of the Revenue since there is nothing on record to show that the exporter did not exist at the premises at the time of export or that the appellant was aware about the non-existence of the exporter when it filed the Shipping Bills. In fact, there is not even an assertion....
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.... antecedents are. Even if the person is convicted of a criminal offence under the Customs Act itself, the Act does not enable the officers to stop his imports or exports. Means of the person cannot be questioned either. The same hut-dweller, who gets his ration card after due verifications can get an IEC from DGFT based solely on an online application and after submitting his documents and can file a shipping bill for export of goods worth several crores of rupees and his lack of means does not mean that the officers can stop such an export. All that is required is that the exporter or importer should have an IEC issued by the DGFT. The IEC is issued by the DGFT on an online application in Form ANF2 and some supporting documents. For instance, in case of individuals, the documents that are required are: i. Digital Photograph (3x3cms) of the Proprietor. ii. Copy of PAN card of the Proprietor. iii. Copy of Passport (first & last page)/Voter's I-Card/ Driving Licence/UID (Aadhar card) (any one of these). iv. Sale deed in case business premise is self-owned; or Rental/Lease Agreement, in case office is rented/ leased; or latest electricity /telephone....
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....toms. Even if an exporter is caught and is being investigated for such an export, the Customs officers cannot legally stop his future exports." 43. The third level of check is through the banks when the remittances pertaining to the exports are received. The export data is transmitted by the Customs to the Reserve Bank of India online where it is matched with the remittance data obtained from the banks. Remittances have to be received within one year and so there is no immediate check at the time of export. It is a sort of post-mortem exercise for possible remedial action. 44. As far as the export incentives such as drawback are concerned, they are received on the basis of the shipping bills cleared by the Customs and the corresponding Export General Manifest (EGM) filed by the Master of the Vessel or his agent confirming that the container is loaded on to the ship. Regardless of whether the remittance is received (for which a time of one year is available) or not, the exporter gets drawback into his account immediately from the Government. 45. To sum up, the entire system of exports is based heavily on trust and facilitation and very less emphasis on due diligence which e....