The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi Bench has quashed the order canceling the customs broker license on the grounds that the customs broker verified correctness of Importer Exporter Code (IEC) number.
BACKGROUND
M/s. Trinity International Forwarders was issued a licence as a Customs Broker. The Directorate of Revenue Intelligence, Mumbai, received intelligence that some exporters were over-invoicing exports so as to claim excessive drawback and investigated the matter.
One of these exporters was M/s. Janman Lifestyles Pvt. Ltd., who exported garments under 59 Shipping Bills filed in Mumbai and claimed drawback and the appellant filed some of these Shipping Bills as its Customs Broker.
A Show Cause Notice for the alleged violations was issued to the exporter and others including the appellant in the case.
The appellant submitted that a fine was imposed on the appellant in that matter by the Additional Commissioner and the appeal filed against that order is before the Commissioner (Appeals).
The Commissioner of Customs and central Excise, Jodhpur, who licenced the appellant as Customs Broker, initiated these proceedings and an SCN dated 1.2.2023 was issued to the appellant proposing action under the Customs Brokers Licensing Regulations, 2013.
The appellant is assailing the Order-in- Original 6 dated 2.5.2023 passed by the Commissioner of Customs (Preventive) Jodhpur wherein he held that the appellant had violated Regulations 11(d), 11(e) and 11(n) of CBLR, 2013 and canceled the Customs Brokers license issued to the appellant, forfeited its security deposit and imposed a penalty of Rs. 50,000 on it.
ISSUES RAISED
Had the appellant violated Regulations 11(d), 11(e) and11(n) of the CBLR, 2013?
If so, is the penalty of cancellation of its licence under Regulation 20(7) read with Regulation 18 and 22, and forfeiture of its security deposit and the imposition of fine of Rs. 50,000/- under Regulation 22 read with Regulation 20 just and fair?
RULING
The tribunal observed that Regulation 11(n) requires Customs Broker to verify correctness of Importer Exporter Code (IEC) number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information.
The CESTAT held that the appellant produced copies of the Aadhar card and PAN Card of Shri Uday Desai and the IEC certificate of M/s. Janman Lifestyles Pvt. Ltd. which it had obtained as a part of Know Your Clients verification.
Case Title: M/S Trinity International Forwarders V/S Commissioner Of Customs
Citation: Customs Appeal No. 54942 Of 2023