The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that Customs Brokers Licensing Regulations (CBLR, 2018)regulations does not mandate Customs Broker to check whether exporter entitled to Input Tax Credit (ITC) under GST
M/s Bright Clearing & Carrier Pvt. Limited and M/s Star Carriers , the appellants are Customs Brokers whose licences were revoked by the impugned orders 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.
The Directorate General of Analytics and Risk Management of the Central Board of Indirect Taxes and Customs 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. The Commissioner passed impugned orders holding that the appellants had violated Regulation 10(n) of the CBLR.
It was observed that if there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled. If there are documents issued by the Government officers which show that the client is functioning at the address, it would be reasonable for the Customs Broker to presume that the officer is not wrong and that the client is indeed, functioning at that address.
The CESTAT observed that the reports state either that the exporters are not bonafide or that the officer does not recommend or that the ITC was not available. Further viewed that 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.
The CESTAT bench consisting of Justice Dilip Gupta, President and Mr P V Subba Rao, member (technical)set aside the impugned orders revoking the Customs Brokers licences of the appellants forfeiting their security deposits.
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