Customs Broker Is Not Required To Obtain Any "Recommendation" From Officer That The Exporter Is "Bonafide": CESTAT

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the customs broker is not required to obtain any "recommendation" or a certificate from any officer that the exporter is "bonafide."

The two-member bench headed by Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that, as per the verification report, during physical verification, the exporter was found to be non-existent. However, the report clarified that several GST returns have been filed by the exporter and tax has also been paid. Nothing in the report supports the view that the exporter never operated from those premises, let alone prove that the customs broker has not verified the exporter as per Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018.

The verification was conducted by the jurisdictional officers, who found that the exporters did not operate from the registered premises. It was, therefore, concluded that the exporters did not exist at all. It was felt that the customs brokers/appellants who processed exports made in the name of the exporters had not fulfilled their obligations under Regulation 10(n). The respondent/department issued show-cause notices to the appellants and appointed inquiry officers, which culminated in the issue of the orders.

Regulation 10(n) requires the customs broker to verify the correctness of the Importer-Exporter Code (IEC) number, the Goods and Services Tax Identification Number (GSTIN), the identity of his client, and the functioning of his client at the declared address by using reliable, independent, authentic documents, data, or information.

The question arose as to whether the customs broker has to satisfy itself that the documents or their copies given by the client were issued by the concerned government officers, or whether the customs broker has to ensure that the officers have correctly issued these documents.

The CESTAT said that the obligations under Regulation 10(n) of the CBLR cannot be read to mean that it would amount to treating the customs broker as one who can and is responsible for overseeing and ensuring the correctness of the actions by the government officers.

The CESTAT noted that the verification of certificates, which is part of the obligation under Regulation 10(n) on the customs broker, is fully satisfied as long as it is satisfied that the IEC and the GSTIN were issued by the concerned officers.

The tribunal stated that the evidence produced in the show cause notices does not support the allegations that the appellants had violated Regulation 10(n) of CBLR.

Case Title: M/s Surya Jyoti Global Logistics, Customs Broker Versus Commissioner of Customs

Citation: Customs Appeal No. 50789 Of 2021

Date: 06.12.2022

Counsel For Appellant: Advocate B.L. Garg

Counsel For Respondent: Authorized Representative Jaya Kumari

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