2023 (3) TMI 27

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....ied risky exporters involved in execution of frauds and felt that the some entities to which the GSTIN was issued were fictitious and did not exist at all. DGARM also found that exports by these entities were handled by certain Customs Brokers including the appellant herein and reported to the respective Commissionerates including the Respondent herein. While in a number of similar cases where investigations were conducted and orders were passed revoking the licences of the Customs Brokers, in most cases, of the total list of alleged non-existing exporters, physical verification was done in respect of two or three exporters only through the jurisdictional officers. Thereafter, with the email received from DGARM and the verification reports of the officers as Relied Upon Documents, Show Cause Notices SCN were issued proposing to revoke the licences of the Customs Brokers. 4. Learned counsel for the appellant took us through the records of this case and submitted that in this case, the Commissioner issued the SCN to the appellant without any relied upon documents whatsoever. In other words, the SCN itself had no evidence to support it. An Inquiry officer was also appointed. After ....

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.... d) Jasjeet Singh Marwah versus Union Of India and others 2009 (2)TMI 57-Delhi High Court 9. We have considered the submissions on both sides. Regulation 10(n) 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 follows: a) Verify the correctness of IEC number b) Verify the correctness of GSTIN c) Verify the identity of the client using reliable, independent, authentic documents, data or information d) Verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information 10. Of the above, (a) and (b) require verification of the documents which are issued by the Government departments. The IEC number is issued by the Director General of Foreign Trade DGFT and the GSTIN is issued by the GST officers under the CBIC or by officers of the Government of India or under the Governments of State or Union territory....

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....or certified, held, when he signed it, the official character which he claims in such paper. 11. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers have issued the certificate or registration correctly. It has been held by the High Court of Delhi in Kunal Travels that ―the CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect of clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the 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).‖ Of course, if the Customs Broker comes to know that its client had obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and a....

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....ormation. This responsibility, again, can be fulfilled using documents or data or information so long as they are 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. By their nature, Customs formations are located 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. For instance, if an importer from a small town in, say, Madhya Pradesh imports goods through ICD Tughlakabad in Delhi, the Customs Broker operating in Delhi cannot be expected to leave his entire business and travel to that town to verify physically if the importer, indeed, is functioning from that address. If Regulation 10(n) is interpreted to burden the Customs Broker with such a responsibility, it will not only be far too onerous to the Customs Broker but it will also make it impos....

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....ying the details of several fictitious exporters in respect of some exporters (listed in the SCN), the Shipping Bills were filed by the appellant. Learned counsel for the appellant submits as follows: a) The SCN itself has not produced any evidence whatsoever to assert that the appellant had violated Regulation 10(n) b) The SCN does not even have any evidence to substantiate that the exporters whose exports the appellant handled did not exist apart from the reference to the letter by DGARM in the SCN itself; the email from DGARM itself was not enclosed to the SCN. c) No enquiry was conducted by anyone in pursuance of the suspicion raised in the email of DGARM at all. Therefore, there is not even an iota of evidence that the exporters whose exports the appellant handled did not exist; d) Based on the suspicion, the appellant's licence was initially suspended and then the suspension was revoked and thereafter this SCN for revocation of the licence was issued. Once the suspension of the licence was revoked, no SCN proposing revocation of licence can be issued; e) The appellant had obtained the KYC documents from all the exporters and produc....