The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the Customs Broker (CB) license for facilitating fraudulent exports to avail ineligible Integrated Goods and Service Tax (IGST) refund on the ground of violation of regulation 10(n) of the Customs Brokers Licensing Regulations Rules (CBLR),2018.
Aradhya Export Import Consultants Pvt Ltd, the respondent-assessee had filed 8 shipping bills during the period August and September 2018 with the amount of Rs. 2,10,14,834.8/- and claimed the IGST refund of Rs. 54,90,378/- for the export of goods i.e. ‘Clutch Plates and Glass Items, decor glass’.
The revenue appealed against the order passed by the adjudicating authority for revoking the suspended license of the Customs Broker.
Munshi Ram Dhania, the counsel for the department contended that the observation by the department was sufficient to hold that the exports vide the mentioned shipping bills were made not to realize the export proceeds, but to claim IGST refund by using bogus GST registration and bogus GST invoices.
Also submitted that the exporter had already fraudulently claimed IGST refund, even though the same was ineligible and more so because there was non-realization of the full amount of export proceeds from the foreign buyer.
Ram Avatar Singh, the counsel for the assessee contended that the CB had never imparted any incorrect information to the exporter nor even it was apparent from the statement of the cardholder of CB that certain information was imparted to the exporter which was later found false and once there was nothing on record to show not even in the show cause notice as to what information was imparted by CB to the exporter alleging violation of Regulation 10(e) of Customs Brokers License Regulations Rules had no meaning.
The Bench observed that in the case of Swastic Cargo Agency Limited vs. Commissioner of Custom, the court held that CB failed to verify the correctness of the document thereby violating its obligation as a customs broker even forfeiture of security deposit has rightly been ordered and the suspension of his licence was quite a proportionate penalty.
The two-member bench comprising Rachana Gupta (Judicial) and Hemambika Priya (Technical) held that there was a violation of Regulation 10(n) of CBLR by the assessee and suspension of the Customs Broker license was upheld.
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