Delhi High Court - Orders
Commissioner Of Customs (Airport And ... vs M/S Mauli Worldwide Logistics on 7 July, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~78
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CUSAA 89/2025, CM APPL. 38958/2025 & CM APPL. 38959/2025
COMMISSIONER OF CUSTOMS (AIRPORT AND GENERAL),
NEW DELHI .....Appellant
Through: Mr. Aakarsh Srivastava, Sr. Standing
Counsel with Mr. Anand Pandey, Adv.
versus
M/S MAULI WORLDWIDE LOGISTICS .....Respondent
Through: Ms. Reena Rawat, Adv.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA
ORDER
% 07.07.2025
1. This hearing has been done through hybrid mode.
CM APPL. 38959/2025 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of. CUSAA 89/2025, CM APPL. 38958/2025 (for stay)
3. The present appeal has been filed by the Appellant - Commissioner of Customs (Airport & General), New Delhi, under Section 130 of the Customs Act, 1962, inter alia, assailing the final order no. FO/C/A/50403/2025- CU[DB] dated 24th February, 2025 (hereinafter, 'impugned order') passed by the Customs Excise & Service Tax Appellate Tribunal (hereinafter, 'CESTAT') in Customs Appeal No. 51868 of 2024.
4. The brief background is that the Respondent is a Customs Broker having Customs Broker License No. R-11/DEL/CUS/2011, which is valid upto 1st August, 2031. A report bearing no. 07/2023-24 dated 4th May 2023 was received by the Customs Department that there were fraudulent exports CUSAA 89/2025 Page 1 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/07/2025 at 21:29:48 by certain non-existent entities. An official communication regarding this matter was received by the Respondent via email on 1st June 2023 from the investigation arm in Mumbai and the same was in respect of 17 non-existent suppliers, who filed 150 shipping bills, representing a total Free on Board (hereinafter, 'FOB') value of Rs.132.76 Crores, which is yet another fraudulent Input Tax Credit (hereinafter, 'ITC') transaction.
5. The present appeal relates to one exporter namely M/s On Point Trading, who filed 9 shipping bills and is stated to have availed benefit of more than Rs.50 Lakhs of Customs Duty Drawback.
6. The case of the Customs Department is that the Customs Broker i.e. the Respondent did not do proper Know Your Customer (hereinafter, 'KYC') verification of the exporter and, hence, a Show Cause Notice dated 23rd August, 2023 was issued as to why action should not be taken against the Respondent.
7. In reply thereto, the Respondent merely submitted three documents, of the Exporter namely Goods and Service Tax (hereinafter, 'GST') registration certificate online, Import-Export Code (hereinafter, 'IEC') certificate online and the authorization letter. No other documents were with the Respondent.
8. Under such circumstances, the Order-in-Original dated 31st January, 2024 came to be passed leading to revocation of the Customs Broker License of the Respondent. The Respondent then filed an appeal before CESTAT and CESTAT set aside the Order-in-Original in the following terms:
"8. The appellant had submitted the PAN card and the Aadhar card. The authorisation from the exporter was also submitted by the appellant. The Enquiry Officer has rejected the same for the reason that the appellant had not met the exporter. Even if the appellant had not met CUSAA 89/2025 Page 2 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/07/2025 at 21:29:48 the exporter, the PAN card and Aadhar card were before the authorities and these two documents have been mentioned in the Circular. The impugned order does not state that these two documents were not submitted or these two documents were found to be forged. Merely because the appellant had not met the importer, would not result in violation of regulation 10(n) of the 2018 Regulation. The requirement of regulation 10(n) of the 2018 Regulation was, therefore, satisfied."
9. Submission of ld. Counsel for the Appellant is that the Customs Broker had merely submitted the GSTIN number and the IEC number of the exporter and did not have any other documents. After the order in original was passed, the Respondent filed the PAN card and Aadhar Card of the exporter along with its appeal with a plea that the same was obtained from the bank account of the exporter. Admittedly, the Customs Broker had not met the exporter and thus, under such circumstances, the submission on behalf of the Appellant is that the impugned order is not sustainable.
10. Ld. Counsel for the Respondent on the other hand, submits that the PAN card and Aadhar card of the exporter - M/s On Point Trading were submitted before the Adjudicating Authority.
11. A perusal of page 85 of the present appeal would show that only two documents namely IEC and GST registration certificate were submitted and other two documents i.e. PAN card and Aadhar card, which were filed before the CESTAT, were not submitted before the Adjudicating Authority. The relevant portion of the Order-in-Original reads as under:
"17. While it is a fact that the exporter has filed GST returns even after the period of export, however, as a matter of record and as part of KYC protocol, CB has submitted only IEC and GST registration CUSAA 89/2025 Page 3 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/07/2025 at 21:29:48 certificate of the exporter. However, for the exporter, being a proprietorship entity, these are not the prescribed documents. The exporter was expected to submit at least two listed documents mentioned in the Circular 09/2010-Cus. Thus, at least one additional personal document like PAN, election card etc. should have been taken by the CB even if GST registration document in the case of a proprietorship entity could be treated as a personal document of sorts. I also find from the GST details of the exporter that the e-Aadhar of the exporter is not authenticated. All the more important that the CB should have taken all the prescribed documents. It goes without saying that the CB cannot be held responsible if the exporter vanishes or shuts business after the export is done. The moot point from the perspective of regulation compliance is whether the CB did due diligence as part of KYC formalities under regulation 10 (n) or not. Therefore, notwithstanding that the exporter continued to file the GST returns even after the export period, the CB has not done due diligence on his part as it has failed to produce even at least one document from the listed documents in the Circular 09/2010-Cus. CB's claim that it has obtained all the KYC documents like PAN, Aadhar etc. of the exporter is a plain misrepresentation. Therefore, I find that the CB has not complied with regulation 10(n) which is a substantive requirement under the CBLR, 2018."
12. Hence, the submission of the Respondent that the said two documents were submitted before the Adjudicating Authority does not appear to be correct.
13. Moreover, Customs Brokers have an important duty to perform in respect of the KYC verification of the Exporter, inasmuch as they not only act CUSAA 89/2025 Page 4 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/07/2025 at 21:29:48 as the agent of the Exporter but also act as the trusted person, upon whom the Customs Department relies.
14. Under such circumstances, not doing the proper KYC verification can have adverse consequences to the exchequer in terms of the parties not being traceable, ineligible duty drawback being availed of and GST not being paid.
15. Considering the same, issue notice in this appeal. Ms. Reena Rawat, ld. Counsel for the Respondent accepts notice.
16. The Respondent shall file a reply to the appeal within four weeks. Rejoinder thereto be filed within four weeks thereafter.
17. List before the Joint Registrar on 11th September, 2025.
18. List before the Court on 13th October, 2025.
PRATHIBA M. SINGH, J.
RAJNEESH KUMAR GUPTA, J.
JULY 7, 2025/dk/ck CUSAA 89/2025 Page 5 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/07/2025 at 21:29:48