Order date – 18 November 2022

 Facts –

• The Appellants, M/s Bright Clearing & Carrier Pvt. Limited and M/s Star Carriers, are Customs Brokers.
• The Directorate General of Analytics and Risk Management of the CBIC analysed the data and identified risky exporters involved in execution of frauds 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 appellants.
• Show cause notice dated 23.12.2020 was issued alleging that the appellant processed exports in respect of 31 non-existent exporters but verification was done only in respect of the following 3 exporters
• The appellant’s licences were revoked under of Customs Brokers Licensing Regulations, 2018 and the security deposits made by them were forfeited. Penalty was also imposed on them on the ground that they had violated Regulation 10(n) of CBLR 2018.

Issue –

• Whether the revocation of licenses of the appellants under Customs Brokers Licensing Regulations, 2018 is in order?

Order –

• The Tribunal observed the 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. Upon the verification the tribunal observed that the appellant had fulfilled all the conditions stipulated in the Regulation 10(n).
• The Tribunal finds that in both these cases, the evidence available on record in the form of verification reports relied upon in the SCNs are vague and in some cases, even the name of the exporter who they were enquiring about is not indicated in them.
• Obtaining a report from the officers that the exporter is bonafide or obtaining their recommendation or checking if the exporter is entitled to ITC under GST is NOT the responsibility of the Customs Broker under any Regulation of CBLR, 2018.
• While the reports indicated that the exporters did not exist at the premises on the date of verification, they do not indicate if they never existed and the GSTIN was issued by the Commissionerate and the IEC and PAN, etc. were issued by DGFT and Income tax department respectively to non-existing entities or the exporters ceased to operate from those premises after the GSTIN, IEC, etc. were issued. In case of latter, it is not clear if the exporters operated from those premises at the time the appellants had processed their exports.
• Hence the impugned orders revoking the Customs Brokers licences of the appellants forfeiting their security deposits and further imposing penalty on the appellants cannot be sustained and need to be set aside.