Customs Broker Cannot Be Faulted For Trusting Government-Issued Certificates: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that when a government officer issues a certificate or registration with an address to an exporter, the Customs Broker cannot be faulted for trusting the certificates so issued. The Tribunal opined that “If there are documents issued by the Government Officers which show that the client is functioning at the address, it would be reasonable for the Customs Broker to presume that the officer is not wrong and that the client is indeed, functioning at that address.” The Bench of Binu Tamta (Judicial) and P. V. Subba Rao (Technical) stated that if there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled. In this case, the assessee is a proprietorship firm licensed as a Customs Broker under the Customs Brokers Licensing Regulations. The assessee filed six shipping bills to export goods. Receiving intelligence found that the goods were highly overvalued in order to claim ineligible export benefits. The assessee' license was suspended. A show cause notice was issued to the assessee. The Deputy Commissioner found that assessee had violated the regulations. Aggrieved by the decision of Deputy Commissioner, the assessee filed an Appeal before Commissioner, who revoked the license. The assessee has challenged the order passed by the Commissioner before the Tribunal. The assessee contended that the assessee had a limited role in verifying the existence and functioning of the exporter. Also, the assessee verified the correctness of these from the websites of the concerned departments and found that they were issued by the respective officers. Whereas it was contended by the Department that the assessee had filed Shipping Bill in the name of a non-existent exporter and that despite being aware, had not reported the overvaluation of the exports. Also, the exporter was non-existent, and exports were based on fake documentation. The Tribunal noted that if neither DGFT nor Customs is checking the existence of the exporters before allowing exports and giving out the export benefits, it is a matter of serious concern but the Customs Broker is not responsible to nor authorised to find and correct the mistakes of DGFT and Customs. “The onus on the Customs Broker cannot, therefore, extend to verifying that the officers have correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs Officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a government officer so long as it is valid” stated the bench. In view of the above, the Tribunal modified the order to the extent that the revocation of licence and forfeiture of security deposit of the assessee was set aside but the penalty of Rs. 50,000/- imposed on the assessee was upheld. Case Title: Ravi Dhanwariya v. The Commissioner of Customs-New Delhi -Airport And General Case Number: Customs Appeal No. 54889 OF 2023 Counsel for Appellant/ Assessee: T. Chakrapani Counsel for Respondent/ Department: M.K. Shukla Click Here To Read/Download The Order

Customs Broker Cannot Be Faulted For Trusting Government-Issued Certificates: CESTAT

Mehak Dhiman

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