Responsibility Cast on CB under Regulation 10(n) of CBLR stands Fulfilled when Verification of Address is Complete: CESTAT [Read Order]

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the responsibility cast on customs broker ( CB ) under Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018 ( CBLR ) stands fulfilled when verification of address is complete.

Based on the reports received, the jurisdictional Commissioner alleged that the appellant had violated the provisions of CBLR, 2018 by not following the KYC guidelines. The CB license was suspended and thereafter, the inquiry as mandated was conducted. The impugned order was passed ordering for revoking the license, forfeiture of deposit and imposition of penalty.

The issue relates to the appellant, who is a Customs Brokers [ CB ] whose license was revoked by the impugned order under Customs Brokers Licensing Regulations [ CBLR ], 2018 and the security deposits made by him was forfeited. Penalty was also imposed on the ground that the appellant had violated Regulation 10(n) of CBLR 2018.

The Counsel for the appellant submitted that no relied upon documents such as the DGARM report was shared with the appellant, thereby violating the principles of natural justice. The counsel further contended that with the introduction of GST, no Shipping Bill can be processed without the valid GSTIN being mentioned on the shipping Bill. As regards IGST refunds, he contended that the same are automatically credited to the account of the exporter which is registered via AD code with the Department, which also requires extensive documentation.

It was further submitted that Regulation 10(n) of CBLR, 2018 mandates the CB to verify the identity of importer by way of independent documentation. In the present case the appellant cannot be held responsible for the exporters not being traceable as all necessary documents to ascertain the veracity of the exporter had been undertaken none of the documents is found to be false or forged.

Regulation 10(n) requires the Customs Broker to verify the identity of the client using reliable, independent, authentic documents, data or information. In other words, he should know who the client is and the client cannot be some fictitious person. As per the Regulation, this identity can be established by independent, reliable, authentic: a) documents; b) data; or c) information. Any of these methods can be employed by the Customs Broker to verify the identity of its client.

A Two-Member Bench of Binu Tamta, Judicial Member and Hemambika R Priya, Technical Member observed that “We find that both the GSTIN as well as the IEC indicates the address of the client. This in itself is independent data to verify the correctness of the identity/address of the client. We also note that there is nothing on record to show that either of these documents were fake or forged. Therefore, once verification of the address is complete as discussed above, the responsibility cast on the appellant under Regulation 10(n) stands fulfilled.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates