TaxTMI 
TaxTMI 
2025 (11) TMI 1222
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....f CBLR; and b) If so, if revocation of licence, forfeiture of its security deposit and imposition of penalty of Rs. 50,000/- is proportionate to the violations. 4. The facts which led to the issue of the impugned order are that the Directorate General of Analytics and Risk Management [DGARM] of the Central Board of Indirect taxes and Customs analysed the data and identified risky exporters involved in execution of fraudulent exports and got verification done by the jurisdictional GST officers and identified exporters who could not be found at all physically at their registered premises. DGARM also found that exports by these exporters were handled by certain Customs Brokers including the appellant herein and reported them to the respective Commissionerates including the Respondent herein. The allegation with respect to the appellant is that it had filed Shipping Bills in the name of the following two exporters, who, on physical verification by the field officers, were found to not exist at their business premises indicated in their importer exporter code [IEC] and GST Identification Number [GSTIN]: (i) M/s. M J Expo Trade India (ii) M/s. Roomwell Trade....
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.... ATR Logistics India Private Limited therein it was, inter-alia informed as follows: - "in order to establish the contravention as detailed above, an inquiry/examination is essential. Therefore, in terms of Regulation 17 of CBLR 2018, Shri Sunil Shrivastava, Deputy Commissioner, ICD Tughlakabad (TKD) Import, New Delhi, is being appointed as an Inquiry officer in the above discussed case. M/s ATR Logistics India Private Limited, the authorized Customs Broker is required to join the proceedings before the Inquiry officer and to submit his representation, if any, to the inquiry officer within thirty days of the issuance of this Show Cause Notice." 8.10.4. I find that complete address/contact details of Inquiry Officer was communicated to the CB and M/s ATR Logistics India Private Limited was clearly conveyed to join the proceedings and submit his representation to the inquiry officer within 30 days of the issuance of the Show Cause Notice. However, the CB deliberately chose not to participate in the inquiry. Despite multiple opportunities for a personal hearing provided by the Inquiry Officer, nó representative of the CB appeared to defend against the allegati....
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....egulations were established for the CBs in the first place. The very purpose of the F category examination, which is required to be cleared by the CB, would have no meaning if the CBs are merely relying on the exporters/importers' information without proper scrutiny and the regulation's objective would seem weakened. It implies that it was not an unintentional lapse rather deliberate act which has caused loss to government exchequer. 8.10.9. In view of the facts and circumstances narrated above, it's clear that Customs Broker failed to fulfill his obligation as stipulated in the Regulation (d) and Regulation (e) of CBLR, 2018. I, therefore, have no hesitation in holding that Customs Broker had violated the provision of Regulation 10(d) and Regulation (e) of CBLR 2018." 9. The submission of the learned counsel for the appellant is that the appellant did not violate either of these two regulations at all. 10. We do find that the appellant was quite careless in not making submissions and not participating in the proceedings before the Inquiry officer at all. However, such negligence has nothing to do with compliance with or violation of Regulations 10(d....
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....umber (GSTIN), and the identity of the client. 8.11.5. However, I find that the NCTC-DGARM, Mumbai report confirmed that the exporter firm was non-existent at the time of physical verification. This raises a critical question: how can it be said that the Customs Broker (CB) properly verified the functioning of its client at the declared address? 8.11.6. I also, observe that the IEC Code or GSTIN is issued to importers/exporters upon the physical verification of addresses, as and when required. However, it does not guarantee that the importer/exporter will continue to operate from the registered address, nor does it imply that the department monitors whether the importer/exporter remains at the declared address. Customs Brokers (CBs) cannot absolve themselves of responsibility merely by asserting that the IEC or GSTIN has been verified through online mode without further ensuring that the importer is operating business at the declared address. 8.11.7. In the present case, the Customs Broker (CB) has facilitated the customs clearance of the said exporter which were non-existing at the time of physical verification. Then, the question arises as to whether on....
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.... 10(n) of CBLR cannot be read to mean the latter as it would amount to treating the Customs Broker as one who can and is responsible to oversee and ensure the correctness of the actions by the Government officers. It would also mean that the Regulations under the Customs Act prevail over the actions under the Foreign Trade (Development and Regulation) Act, 1992 under which the IEC is issued by DGFT and the Central Goods and Services Tax Act (or state GST Act) under which the GSTIN is issued by the GST officers which is not the correct construction of the legal provisions. Therefore, the verification of certificates part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as it satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. 17. The legal presumption is that a certificate or registration issued by an officer or purported to be issued by an officer has been correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to....
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....ents 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) information 20. Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary for the Customs Broker to conduct a physical verification or launch an investigation. So long as he can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. If a document is issued by any other person not interested in the relationship of the client and the Customs Broker, it can be called independent. But it should also be reliable and authentic and not one issued by any Tom, Dick and Harry. 21. The Commissioner remarked that the IEC and GSTIN issued by the officers were not independent, reliable or authentic which is a very serious ....
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....rification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent. 23. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. Of course, if the Customs Broker was aware that the client has moved and continues to file documents with the wrong address, it is a different matter. 24. The reports stating that the exporters were not at the places of business indicated in the GSTIN were issued by the juri....