Top Stories Physical Verification At Exporter’s Premises Not Mandatory for Customs Brokers, Verification via Reliable Documents is Sufficient: CESTAT [Read Order] CESTAT ruled that Customs Brokers are not required to physically verify exporters’ premises if IEC, GSTIN, and address are verified using reliable documents By Kavi Priya – On May 20, 2025 7:36 pm – 3 mins read

The Principal Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi, held that physical verification of the exporter’s premises is not mandatory for Customs Brokers under the Customs Brokers Licensing Regulations (CBLR), 2018, provided they verify the IEC, GSTIN, and address using reliable, independent, and authentic documents. United Cargo Services, the appellant, is a licensed Customs Broker whose license was revoked by the Commissioner of Customs (Airport & General), New Delhi, through an order dated 11.11.2024. The order also imposed a penalty and forfeited the security deposit. Read More: Reimbursed Expenses Excludable only When ‘Pure Agent’ Conditions u/r 5 of Service Tax Rules are Satisfied: CESTAT [Read Order] The revocation followed the filing of several shipping bills by the Customs Broker in July 2023 on behalf of SS Enterprises for the export of readymade garments.

Based on an alert from the National Customs Targeting Centre (NCTC), the consignments were detained, and investigations revealed that the exporter was non-existent at the declared premises, and many of the suppliers were either suspended or had cancelled GST registrations. E-Filing Mistakes Can Be Costly! Avoid penalties now – Click Here The Customs Department alleged that the exporter attempted to claim fraudulent export benefits through overvalued invoices and fake transactions, and that the Customs Broker failed in its obligations under Regulations 10(d), 10(e), and 10(n) of the CBLR, 2018. A show cause notice was issued proposing revocation of the license, penalty, and forfeiture. Read More: Mere Mention of Sale and Estimated Gain, No Tangible Material Linking Deceased CFO to Escaped Income: ITAT Invalidates Reopening [Read Order] The appellant’s counsel argued that it had duly verified the Importer Exporter Code (IEC), GSTIN, and address of the exporter using valid and authentic documents. It was submitted that physical verification of the client’s premises was not required under Regulation 10(n), and such an obligation would be overly burdensome. They further argued that the show cause notice lacked specific allegations and failed to clearly establish any misdeclaration or violation under the relevant regulations. It was also pointed out that there was a nine-month delay between the last shipping bill and the suspension order, undermining the claim of urgency in the suspension of the license.

E-Filing Mistakes Can Be Costly! Avoid penalties now – Click Here Read More: What Happens If You File Your ITR Without Checking Form 26AS, AIS, and TIS? The two-member bench comprising Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) found that the allegations under Regulations 10(d) and 10(e) were vague and unsupported by specific evidence. It was observed that a Customs Broker is not responsible for assessing the value of goods or ensuring the exporter’s ongoing operations. Their responsibility is limited to verifying credentials through valid documents, which the appellant had done. The tribunal observed that the inquiry officer had found no violation by the Customs Broker and that the adjudicating authority failed to provide any valid reason to disregard the inquiry report. It reiterated that the obligation under Regulation 10(n) can be fulfilled through document-based verification, and there is no requirement for physical inspection of the exporter’s premises. The tribunal set aside the revocation order, penalty, and forfeiture of the security deposit. The appeal filed by the appellant was allowed