“The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations.”
The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), set aside revocation of Customs Broker License on the ground of show cause notice ( SCN ) being vague and no relevance for denial of Non Objection Certificate ( NOC ).
The appellant, M/s Sai Chhaya Impex Pvt Ltd, is a Customs Broker 1 whose licence was revoked by the impugned order under Regulation 14 read with Regulations 17 and 18 of Customs Brokers Licensing Regulations, 2018 and the security deposit made by it was forfeited. Penalty was also imposed on it on the ground that it 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 Customs4 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 appellant herein and reported to the respective Commissionerates including the Respondent herein. The Respondent issued a show cause notice to the appellant and appointed an Inquiry officer.
After considering the reply to the SCN and the inquiry report, the Commissioner passed impugned order holding that the appellant had violated Regulation 10(n) of the CBLR.
The Bench comprising observed that “The evidence available on record in the form of verification reports relied upon in the SCN are vague and in some cases, even the name of the exporter who they were enquiring about is not indicated in them.”
“The reports state either NOC denied which is not required by any Customs Broker or exporter or that the exporters did not exist at the time of verification which does not prove that they did not exist at the time of verification or that IGST refund may be denied which is irrelevant to the present proceedings. None of the reports establish that the appellant had violated Regulation 10(n)” the Tribunal noted.
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