The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the revocation of customs broker licence and held that the customs broker cannot be faulted when GST registration is operative on government website.
The above appeal has been filed against the order passed by the Commissioner of Customs, Tuticorin who ordered for revocation of the Customs Broker license of the appellant, M/s. ARS International, forfeiture of the whole of the security deposit and imposed penalty of Rs.50,000/-.
A specific intelligence that M/s. J. Tex India has fraudulently availed ineligible IGST refund, drawback and reward by using bogus GST registration issuing bogus GST invoices (where no GST duty has been paid to exchequer) and by filing shipping bills for exporting the goods involved therein. Further, the IGST refund amount which has been disbursed is equal to the FOB value of the shipping bill. Hence the case was taken up for investigation.
The department was of the view that the appellant who is a Customs Broker had violated Regulation 10(d), 10(e), 10(n) and 10(q) of Customs Broker Licensing Regulations (CBLR) 2018. Show cause notice was issued to the appellant. After due process of law, the original authority held that the appellant has violated these provisions and ordered for revocation of the license, forfeiture of security deposit and imposed penalty of Rs.50,000/-. Aggrieved by such order, the appellant is before the Tribunal.
S. Krishnanandh appeared and argued on behalf of the appellant and submitted that the allegation raised against the appellant is that the appellant did not comply with the obligations cast upon him in terms of Regulation 10(d), 10(e), 10(n) and 10(q) of CBLR, 2018.
The Counsel further submitted that all the registration numbers including GSTIN were active and operative. Only later, after the investigation was initiated, the department has cancelled the GST registration. As the exporter had PAN, IE Code, GST registration, the appellant handled the export consignments for and on behalf of the exporter. It is not necessary that the appellant has to meet the exporter directly and obtain the documents directly.
The Coram comprising Sulekha Beevi C.S, Member (Judicial) and M. Ajit Kumar, Member (Technical) observed that “The department issues GSTIN number only after background checking of the exporter. The address and business details of the person who has applied for the GST registration is verified by the department. When the said registration is still operative as per the website, the Customs Broker cannot be found fault if he has relied upon such data available on the Government website.”
“We find that there is no evidence brought out that there is any overt involvement of the Customs Broker in the fraud committed by the exporter. There is no basis to allege that the appellant has violated the relevant Regulations of CBLR, 2018” the Tribunal concluded.
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