Order date – 06 December 2022

 Facts –

• The Appellant, M/s Surya Jyoti Global Logistics, a customs broker.
• A show cause notice was issued alleging that the appellant had processed exports in respect of 13 exporters who did not exist and the appellant had not fulfilled its obligations under Regulation 10 (n). Accordingly customs broker licence has been revoked and security deposit of Rs. 5 lakhs has been forfeited and a penalty of Rs. 50,000/- has been imposed upon the appellant.
• Being Aggrieved the appellant had filed an appeal

Issue –

• Whether the appellant had violated Regulation 10(n) or not?

Order –

• The Tribunal finds that investigations were conducted only in respect of three exporters. There is nothing in Regulation 10 (n) which requires the Customs broker to check if the exporter was risky in the opinion of any officer or obtains any NOC from any officer or to get a confirmation from any officer that the exporter is bonafide. Even when the reports say “Nonexistent”, they do not clarify if the exporter never functioned from that premises and GSTIN has been wrongly issued or the exporter ceased to function at that address after the exports.
• Therefore the Tribunal does not find any evidence to prove that the Customs broker violated Regulation 10 (n).
• The impugned order, therefore, cannot be sustained.

Customs Appeal No. 50790 of 2021 – M/s Hari Mohan Dwivedi

Key Pointers –

• The Appellant, M/s Hari Mohan Dwivedi, was issued a show cause notice referring to 17 exporters indicated by DGARM as being not verified or traceable. However, physical verification was conducted in respect of only one on which the firm/unit was found not to be existing/functional.
• Accordingly his Customs Broker licence was cancelled the entire amount of security deposit was forfeited and the penalty of Rs. 50,000/- was imposed.
• The issue involved here is whether the appellant had violated Regulation 10(n) or not?
• The Tribunal observed that verification report shows that during physical verification, the exporter was found to be non-existent. However, the report further clarifies that several GST Returns have been filed by the exporter and tax was also paid. Nothing in this report supports the view that the exporter never operated from that premises let alone prove that the Customs broker has not verified the exporter as per Regulation 10 (n).
• The impugned order cannot, therefore, be sustained.

Customs Appeal No. 51654 of 2021 – M/s Rajinder P.Kapur

Key Pointers –

• The Appellant, M/s Rajinder P.Kapur, was issued a show cause notice alleging that 31 exporters whose exports the appellant had processed are alleged to be non-existent. However, verification reports were enclosed only in respect of three exporters.
• Accordingly his Customs Broker licence was revoked, the security deposit of Rs. 50,000/- was forfeited and the penalty of Rs. 50,000/- was imposed.
• The issue involved here is whether the appellant had violated Regulation 10(n) or not?
• The Tribunal observed that none of the three reports establish that the exporters never operated from those premises. Nor do they support the view that the Customs broker had not verified as per Regulation 10 (n). The Customs broker is not required obtain any “Recommendation” or a certificate form any officer that the exporter is “bonafide”.
• The impugned order, therefore, cannot be sustained.
• Therefore, the Tribunal finds that in each of these cases, the evidence produced in the show cause notices does not support the allegations made therein that the appellants had violated Regulation 10 (n) of CBLR.
• All appeals are allowed and the impugned orders are set aside with consequential benefits.