Case Details: Friends Cargo Services Versus Commissioner of Customs (2025) 31 Centax 211 (Tri.-Del)
Judiciary and Counsel Details
- Ms Binu Tamta, Member (J) & Ms Hemambika R. Priya, Member (T)
- Shri G.S. Arora, Adv., for the Appellant.
- Shri Girijesh Kumar, Authorised Representative, for the Respondent.
Facts of the Case
The appellant, a Customs Broker, handled certain export consignments for clients whose GSTIN and Importer Exporter Code (IEC) they had duly collected and verified. Subsequently, the Directorate General of Analytics and Risk Management identified that the exporters were not available at their registered premises. Based on this, a Show Cause Notice was issued to the Customs Broker, and an Inquiry Officer was appointed. The Order-in-Original concluded that the Customs Broker had violated Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018, leading to the revocation of their license, forfeiture of security deposit, and imposition of penalty. The department contended before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) that the Customs Broker had only obtained the IEC, PAN card, Aadhaar card, and electricity bill, which did not meet the documentary requirements prescribed under a circular, mandating procurement of documents such as Certificate of Incorporation, Memorandum of Association, Articles of Association, Power of Attorney, and PAN allotment letter. The Customs Broker submitted that their obligation under Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018, was fulfilled upon verifying that the IEC and GSTIN were duly issued by the competent authorities, and there was no legal mandate for physical verification of the exporter’s premises or further investigation. The matter was accordingly placed before the CESTAT, Delhi.
CESTAT Held
The CESTAT Delhi held that the Customs Broker’s obligation under Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018, stands fulfilled if the Broker satisfies itself that the IEC and GSTIN were duly issued by the competent authorities. The Tribunal reasoned that as long as the Customs Broker obtains independent, reliable, and authentic documents to establish the client’s identity and business existence, there is no requirement under law for conducting physical verification of the client’s premises or launching an independent investigation. The Tribunal further observed that both the IEC and GSTIN indicated the client’s address and there was no allegation or evidence on record to suggest that these documents were forged or fabricated, making it unnecessary for the Customs Broker to undertake further verification. The CESTAT set aside the revocation of license, forfeiture of security, and penalty, emphasizing that obligations under Regulation 10(n) must be assessed based on the authenticity of documents verified and not on expectations of investigation beyond statutory mandate.
List of Cases Cited
- Baraskar Brothers v. Commissioner — 2009 (244) E.L.T. 562 (Tribunal) — Referred [Para 6]
- Bright Clearing and Carrier Pvt. Ltd. v. Commissioner — 2022 (11) TMI 935-CESTAT New Delhi — Relied on [Paras 5, 10]
- Mauli Worldwide Logistics v. Commissioner — 2022-TIOL-603-CESTAT-Del — Relied on [Paras 5, 11]
- Naman Gupta v. Commissioner — (2024) 15 Centax 329 (Del.) = 2024 (388) E.L.T. 40 (Del.) — Relied on [Para 12]
