TaxTMI 
TaxTMI 
2023 (6) TMI 472
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....e data and identified risky exporters involved in IGST refund frauds. It found that 2,005 of exporters could not physically be found at the registered premises. It also found that the exporters were being handled by 62 customs brokers, including the appellant and this matter was reported to the respective Commissionerates. 3. This led to the issuance of a show cause notice dated 29.12.2010 to the appellant. The relevant portion of the show cause notice is reproduced below:- 2. Whereas, an official communication vide email dated 17.08.2020 (RUD-1) was received from the Joint Director, Directorate General of Analytics and Risk Management (DGARM). New Delhi which is a legal document under Section 4 of the Information Technology Act, 2000. The said communication was received in connection with identification of risky exporters involved in IGST refund frauds who could not be verified physically/are untraceable. Along with the said email communication a list of Customs Brokers who handled consignments for these untraceable exporters was also received. 3. Whereas, in connection with analysis being undertaken by the DGARM, New Delhi for identification of risky exporter....
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....it his representation, if any, to the inquiry officer within 30 days of the issuance of this Show Cause Notice. The Inquiring authority shall submit a report within 90 days of the issuance of this Show Cause Notice to the Commissioner of Customs (Airport & General), New Custom House, New Delhi. 20. Therefore, M/s Sadagati Clearing Services Pvt. Ltd., A-13, Okhla Industrial Area, Phase-I, New Delhi 110020, Authorized Customs Broker License No. R-05/DEL/CUS/2016 (PAN: AAVCS2245K) valid upto 26.05.2025 in terms of Regulation 17 of CBLR 2018 are hereby called upon to Show Cause to the Commissioner of Customs (Airport & General), New Custom House, New Delhi within thirty days of the receipt of the Inquiry Report, that in terms of the above paras and the Inquiry Report Why; a) they should not be held responsible for contravention of provisions of Regulation 10 (n) of Customs Broker Licensing Regulation; b) their Customs Broker License No. R- 05/DEL/CUS/2016 (PAN: AAVC$2245K)valid upto 26.05.2025 should not be revoked and part or whole of the security submitted at the time of issue of their Registration, should not be forfeited in terms of Regulation 14 read wit....
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....bulated above are doubtful and non-existent, yet at least in respect of one of the exporters, the Department has physically verified the address of the exporter and it was found non-existent. Accordingly, 1 find that violation of Regulation 10(n) stands established and the defense arguments do not hold good and from the above stated facts, it is evident that contravention of Regulation 10(n) of CBLR 2018 (erstwhile Regulation 11(n) of CBLR 2013) stands established. Accordingly, the CB license is liable to be revoked. 26.4 Further, I note under the mandate of the Regulation 10(n) of the CBLR 2018, a Customs broker is obligated to verify correctness of IEC, GSTIN, identity and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. Thus, I find that apart from documents to be obtained, there is also a provision for features to be verified by the CB, wherein in case of individuals, present and permanent address in full, complete and correct and in the case of a company name of company, principal place of Business, mailing address of the company and telephone, fax number, e-mail address are to be verified by t....
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....otice that was issued to the appellant relies upon three relied upon documents. The first is the email dated 17.08.2020 sent by the Joint Director, DGARN. The second and the third relied upon documents are in connection with the two exporters namely M/s Ridhi Sidhi Traders and M/s Saturn Expotrade and paragraph 6 of the show cause notice deals with these two exporters. The remarks of the jurisdictional officers have also mentioned in show cause notice regarding these two exporters and they are reproduced below: "6. Whereas, as a result of physical verification for identification of Risky Exporter by the field formations of the following exporters has been received in some cases which is elaborated as below:- (i) M/s Ridhi Sidhi Traders (07AAVFR6825K1ZE): Remarks of jurisdictional officer (RUD-2): Exporter does not appear to be bonafide. (ii) M/s Saturn Expotrade (07ADHFS9621F1ZW): Remarks of jurisdictional officer (RUD-3): Exporter does not appear to be bonafide." 10. In so far as M/s Ridhi Sidhi Traders (RUD is concerned), detailed remarks of the officer are as follows:- " On verification of the registered ....
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....11. The relevant portion of the remarks of the officer in regard to the M/s Saturn Exportrade (RUD) are as follows - On verification of the registered address of the firm given in the registration details, the assessee exporter was found non-existing at the given address. 2. A letter dated 06/02/2020 was written to the assessee for providing Annexure-A and relevant details for verification. However, the said letter was returned undelivered by Postal Authorities. An email dated 15.05.2020 was sent to assessee by this office to their registered email ID to provide Annexure-A along with relevant documents for verification. However, no response to the mail has been received in this office till date. 3. Analysis of GST Returns filed by the assessee has been done. The assessee has filed GSTR-1M for the period from July, 2017 to March, 2019 only. Out of these returns, transactions are reflecting only in GSTR-1M returns for March-Apr, 2018 and remaining filed returns are Nil returns. 4. As per GSTR-1M, the assessee has outward supplies only in the month of March, 2018 and April, 2018 that 100 exports having taxable value of Rs. 32, 27,38,412/- and involv....
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....ncerned, 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 responsibility does not extend to physically going to the premises of each of the exporters to ensure that they are functioning at the premises. When a Government officer issues a certificate or registration with an address to an exporter, it is not for the Customs Broker to sit in judgment over such a certificate. The Customs Broker cannot be faulted for trusting the certificates issued by a government officer. It is a different matter if documents were not authentic and were either forged by the Customs Broker or the Customs Broker had reason to believe that the documents submitted to him were forged. It has been held by the High Court of Delhi in the case of Kunal Travels, 2017 (3) TMI 1494- Delhi High Court 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 t....