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2023 (3) TMI 77 - CESTAT CHENNAILevy of penalty on Customs broker under Regulation 17(7) of the Customs Broker Licensing Regulations, 2018 (CBLR) - overvaluation of goods by exporter in order to claim excess export benefits - adjudicating authority was of the view that the KYC verification was not done in a proper manner and hence they had erred in their duty as a Customs Broker. HELD THAT:- A penalty has been imposed on the appellant, for their alleged failure to do a proper KYC verification, arising from a lack of physical check of premises of the exporters as found required under Regulation (10)(n). it is seen from a plain reading of the said provision that the CB is required to ‘verify correctness of Importer Exporter Code (IEC) number, Goods and Service Tax Identification Number (GSTIN), identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information.’ There is no reference to a physical verification of premises. CB these days service clients from all over the country and expecting them to verify individual premises located anywhere in the country for its functioning, would be very difficult for the CB. It is for this reason that the Regulation 10(n), states ‘by using reliable, independent, authentic documents, data or information.’ i.e. The verification would be satisfied if done using authentic documents, data or information. No physical verification was called for. Hence since SVARAD had verified the relevant documents possessed by the exporters and issued by government departments, the authenticity of which is not under challenge, there is no failure in this regard on their part and the penalty imposed on them under the CBLR and is not sustainable. Thus, SVARAD cannot be said to have violated the provisions of Regulation 11(n) of CBLR, 2018 and there was no justifiable reason to impose a penalty on them - appeal allowed.
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