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3. The brief facts of the case are that an investigation report dated 21.01.2022 received from Special Intelligence & Investigation Branch (SIIB) of Airport Special Cargo Commissionerate (APSC), Mumbai Customs Zone-III, indicated that out of 21 identified fraudulent exporters of Cut & Polished diamonds, the appellants as Customs Broker had handled two of such exporters. During the investigation it was found that unscrupulous persons had created bogus entities by obtaining Import Export Code (IEC) in the name of real estate agents, drivers, teachers who were unrelated with the Diamond trade and used such non-functional IECs, with non-existent address declared in IECs, for fraudulent export activities. The appellants have handled exports in respect of two such exporters viz. M/s Swastik Enterprises and M/s Ganesh Exports. The investigation also revealed that on paper the proprietor of M/s Swastik Enterprises is shown as Shri Mukesh Madhu Regar, even though the actual owner of the business entity is Shri Nikunj. Similarly, in respect of M/s Ganesh Exports the on paper proprietor is shown as Shri Mangi Lal Gurjar, even though the actual owner of the business entity is Shri Punabhai Chandpara. Further, investigation revealed that by procuring non-functional and non-existent addresses and by preparing forged documents, the aforesaid two exporters viz., M/s Swastik Enterprises and M/s Ganesh Exports have illegally exported cut & polished diamonds valued at Rs.36.20 crores and Rs. 185.16 crores, respectively, in the past. As the goods involved in such Indian exports are liable for seizure under Section 113(d) & 113(i) of the Customs Act, 1962, separate proceedings under CBLR was initiated by jurisdictional Commissioner on the appellants by issue of notice dated 21.04.2022 alleging charges of contravention of Regulations 10(a), 10(d), 10(k) and 10(n) of CBLR, 2018. In deciding these allegations the impugned order has been passed by the learned Principal Commissioner of Customs (General) by invoking the Customs Broker license granted to the appellants besides imposition of penalty of Rs.50,000/- and forfeiture of the entire amount of security deposit furnished to the Customs authorities.

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(n) verify correctness of Importer Exporter Code (IEC)number, Goods and Services 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;"

9. In respect of Regulations 10(a) ibid, the requirement is that the CB should have a written authorisation for engaging them as Customs Broker in transacting with Customs department in respect of import/export of goods. In this regard, we find from the records of the case that the appellants had obtained written authorisation letter dated 05.09.2020 from the Proprietor of M/s Swastik Enterprises and another letter dated 20.10.2020 from the proprietor of M/s Ganesh Export. In the impugned order, learned Principal Commissioner has agreed with the finding of the Inquiry Officer in holding that the CB has violated Regulation 10(a) ibid, on the ground that the Director of 6 C/87260/2022 the CB firm Shri Dnyanesh P Walunj, had not met the proprietor of M/s Ganesh Exports i.e., Shri Mangi Lal Gurjar before the detention of export goods who had also stated that he never signed any documents related to the said firm of Ganesh Exports; further, the Director of CB had stated that he had not met any person from M/s Swastik Enterprises. Thus, learned Principal Commissioner concluded in the impugned order that it would not have been possible for the CB to have taken any written authorisation from the two export entities and the CB had not submitted any copy of such authorisation till date to prove their claim before him. We find that though the aforesaid two letters of written authorisation has not been produced by the appellants before the learned Principal Commissioner during the inquiry proceedings, inasmuch as the same being available on record and that the same has not been refuted by the learned AR, this fact cannot be ignored. It is not the case of Revenue that the said written authorisation letters have been obtained through forgery by the appellants. Further, there is no requirement under Regulation 10(a) for the CB to have personally met the proprietor or any authorised person, for obtaining the written authorisation letters to indicate their legal authority for representing the importer/exporter before Customs department. Hence, we do not find any merit in the conclusion arrived at by the learned Principal Commissioner in respect of Regulation 10(a) ibid.

2. In the Customs House Agents Licensing Regulations, 2004, (hereinafter referred to as the said Regulation), -

(i) in regulation 8,

(a) in sub-regulation (1) for the words "twice every year", the words "once every year", shall be substituted;

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(ii) in regulation 13, after sub-regulation (n), the following shall be inserted, namely:-

"(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.";

Thus the appellant was required to inter alia verify present and permanent address in full, complete and correct which the appellant did not do. Merely because the appellant obtained documents as per Column 4 of the above table does not tantamount to fulfilment of requirement of Column 3 relating to features to be verified because if that was so, then there was no need to have Column 3. As seen from Regulation 13(o) quoted above, the Customs House Agent is obligated to inter alia verify antecedent, correctness of Importer Exporter Code, identity of the importer and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. The appellant has not even claimed that it had ever verified the existence of the importer at the given address. Obviously, the appellant failed to fulfil the requirement of Regulation 13(o) ibid.