TaxTMI 
TaxTMI 
2025 (4) TMI 1604
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the GST registrants and identified risky exporters who may have been involved in IGST refund frauds. DGARM also identified the Customs Brokers who handled exports of such exporters including the appellant. DGRAM got the existence of some of these exporters verified from field formation and found that they were not existence. Based on the analysis, DGARM wrote to the concerned commissioners including the respondent herein to take action under the Customs Broker Licensing Regulations. Accordingly, a show cause notice dated 30.12.2020 [SCN] was issued to the respondent which culminated in the impugned order. 3. As per the SCN the appellant had handled exports in respect of 38 suspected exporters listed in table 1 of the SCN. Of these, physical verification was conducted only in respect of four viz., M/s M.K. Traders, M/s Skybridge Traders, M/s Son Industries and M/s Vision Export and Trading Company through the GST officers. The reports of the Assistant Commissioner who had conducted the verification were as follows: "(i) M/s M.K. TRADERS (07DOAPM5686H1ZL) Remarks of jurisdictional officer (RUD-I): "During physical verification, the firm was found not existent." (ii) M/S SKY....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... made the following submissions: (i) After GST has been introduced no shipping bill could be processed without mentioning the GST number in the shipping bill which was valid at the time of export; (ii) The GST refunds are also credited automatically to the account of the exporter which is registered via an authorised dealer's code with the department; (iii) Mere non-traceability, as alleged, of the exporter is no basis to assume that the exports were fraudulent and exporter was ineligible for IGST refund; (iv) Regulation 10(n) mandates the Customs Broker to verify the identity of the importer by way of independent documentation and the appellant ad done so. All the documents which were collected from the exporters at the time of processing of shipping bills were submitted during the adjudication proceedings; (v) The only thing against the appellant is a report by DGARM that the exporters were found to be non-existent which is not on the basis of any evidence; (vi) Even if the exporter was found non-existent at the address, the appellant had verified their existence on the basis of the documents issued by the Government Office and he cannot be held accused of violation R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fy 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 14. 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 issued by the GST officers under the Central Board of Indirect Taxes and Customs of the Government of India or under the Governments of State or Union territory. The question which arises is does the Customs Broker have to satisfy himself that these documents or their copies given by the client were indeed, issued by the concerned government officers or does the Cust....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. 16. 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) information 17. Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. Documents such as GSTIN, IEC and PAN card issued etc., certainly qualify as such documents. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or ev....