The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), set aside revoking of Customs Brokers Licenses on the ground of No proof of non fulfilling obligations under Regulation 10(n) of Customs Broker Licensing Regulation (CBLR), 2018.
The appellants, M/s Bright Clearing and Carrier Pvt Limited 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 (DGARM) 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.
The DGARM also found that exports by these exporters were handled by certain Customs Brokers including the appellants and reported them to the respective Commissionerates including the Respondent. The Respondent issued Show Cause Notices (SCN) to the appellants. After considering the replies to the SCNs and the inquiry reports, the Commissioner held that the appellants had violated Regulation 10(n) of the CBLR.
The SCN alleged that the appellant processed exports in respect of 18 non-existent exporters but verification was done only in respect of only 3 exporters.
Two verification reports state that the exporter is not bonafide. The third verification is self contradictory as on the one hand, states that the exporter does not exist at the place and on the other hand confirms that physical copies of PAN and IEC were provided during verification. It is not clear who has provided these documents if the exporter did not exist at that premises.
The reports nowhere state that the exporters never functioned from those premises and the GSTIN were issued by the department to non-existent firms or they ceased to function from those premises after the GSTIN were issued
A Bench consisting of Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “If the officers report that some exporters are not bonafide, it does not establish that the Customs Broker had not fulfilled its obligations under Regulation 10(n) of CBLR. The entire case of the Revenue based on the verification reports which nowhere establish that the Customs Broker had not fulfilled its obligations under Regulation 10(n)of CBLR.”
“The 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” the Tribunal ruled.
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