TaxTMI 
TaxTMI 
2024 (4) TMI 1099
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....85,000/- and imposition of penalty of Rs. 50,000/- proportionate to the violation? 4. The factual matrix of this case is that the Directorate General of Analytics and Risk Management [DGARM] of the Central Board of Excise and Customs [CBIC] analysed data, identified suspicious registrants under the Goods and Services Tax [GST] and got a physical verification of some of these suspected registrants and found that they did not exist at all at the places of their business. 5. It also found that some of these GST registrants also had Importer Exporter Codes [IEC] from the Directorate General of Foreign Trade [DGFT] and actually exported goods. DGARM further identified which Customs Brokers had processed their exports and conveyed the data to the concerned commissioners. Among the Customs Brokers so identified by the DGARM was the appellant. Based on the information received from DGARM, the Commissioner (Airport & General) New Delhi, who had issued the Customs Broker's licence to the appellant, initially suspended the licence of the appellant on 25.8.2020 and thereafter, issued show cause notice [SCN] dated 24.12.2020 and appointed an inquiry officer. The Inquiry officer submitted his ....
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....d PAN Card, IEC, GST Registration, Aadhar card, electricity bill, rent agreement, and bank statement for verification as required in Regulation 10(n). j) The only verification report enclosed with the SCN was in respect of the exporter listed as S.No. 15, viz., Vinod Kumar, HUF and the verification was done on 11.6.2020 more than one year after the exporter had exported the goods. The report says "Non Existing. Not Recommended". k) The verification report does not even say that the exporter had not existed at the time of export, let alone produce any evidence to support it. l) Therefore, the impugned order may be set aside and the appellant's Customs Brokers licence may be restored. Submissions on behalf of the Revenue 7. Learned authorised representative for the Revenue supports the impugned order and asserts that it calls for no interference. Findings 8. We have considered the submissions on both sides. DGARM did some analysis and came to the conclusion that several GST registrants did not exist and did not operate from their business addresses at all. It is undisputed that their registrations were issued by the very department which initiated the investigation. Thus,....
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....d or had not existed at the time exports had taken place. There was no basis to draw such a conclusion, let alone, extrapolate it to conclude that the appellant had not fulfilled its obligations under Regulation 10(n). 16. 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 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 17. 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 and the GSTIN is iss....
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....igned it, the official character which he claims in such paper." 18. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers had 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. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. 19. The third obligation under Regulation 10(n) requires the Customs Broker to verify the identity of the client using reliable, independent, authentic documents, data or information. In other words, he should know who the client is and the client cannot be some fictitious person. This identity can be established by independent, reliable, authentic: a) documents; b) data; or c) informatio....