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67. The investigations into the matter have conclusively established and proved beyond any measure of doubt that the noticee export firms were found to be non-existing at the addresses declared in the shipping bills or in the IEC. Further Regulation 13 of the CHALR, LUU4 stipulates that a CHA shall verify antecedent, correctness of Importer Exporter Code (IEC) Number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. Further Regulation 19 also emphasizes that the CHA shall exercise such supervision as may be necessary to ensure the proper conduct of his employees in regard to their employment. The failures on part of the CHA to discharge its legal and statutory responsibilities have enabled and fully facilitated the fraudulent exports in the name of his non-existing clients, who are the noticees in the instant proceedings. The fraudulent exports to claim undue drawback benefits could not have taken place or at least come to light earlier, had the CHA fulfilled his obligations honestly. To get additional business, they reportedly shut their eyes on the activities of their employee and also failed to verify the antecedents or their clients. Even the items being exported by the five exporters show the same declared PMV, but they failed to notice the same. This obviously cannot be so without their active and clear complicity in the matter. If in the name of business the CHA overlooks his key legal responsibility and role, he is not only unworthy of a CHA but liable to not only equivalent but stricter punitive liabilities, more so on account of the fact of his being a CHA and licensed in term of CHALR Rules, 2004 under the Customs Act. He has deliberately failed to produce/unravel his co-conspirators and fraudsters in the matter."

6. The Regulation in question reads as follows :

"13. Obligations of Customs House Agent.-

A Customs House Agent shall -

xxx xxx xxx

(o) verify antecedent, correctness of Importer Exporter Code (IEC) Number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information."

7. This court is of the opinion that the impugned order is justified in the facts and circumstances of the case. The reference to the verification of "antecedents and correctness of Importer Exporter Code (IEC) Number" and the identity of the concerned exporter/importer, in the opinion of this Court is to be read in the context of the CHA's duty as a mere agent rather than as a Revenue official who is empowered to investigate and enquire into the veracity of the statement made orally or in a document. If one interprets Regulation 13(o) reasonably in the light of what the CHA is expected to do, in the normal course, the duty cast is merely to satisfy itself as to whether the importer or exporter in fact is reflected in the list of the authorized exporters or importers and possesses the Importer Exporter Code (IEC) Number. As to whether in reality, such exporters in the given case exist or have shifted or are irregular in their dealings in any manner (in relation to the particular transaction of export), can hardly be the subject matter of "due diligence" expected of such agent unless there are any factors which ought to have alerted it to make further inquiry. There is nothing in the Regulations nor in the Customs Act which can cast such a higher responsibility as are sought to be urged by the Revenue. In other words, in the absence of any indication that the CHA concerned was complicit in the facts of a particular case, it cannot ordinarily be held liable.