No CBLR Violation If Customs Broker Verifies KYC and Acts Based on Documents from Intermediary: CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that a customs broker is not in violation of the Customs Broker Licensing Regulations (CBLR), 2018 if they have duly verified the KYC documents of an intermediary and acted upon the documents provided by them. This ruling came in a case where a customs broker’s license was suspended and a penalty was imposed because the actual exporter denied having routed their exports through the broker. The tribunal noted that the broker had verified the IEC, GST registration, and Aadhaar card of the intermediary who represented the exporter. The CESTAT emphasized that the broker cannot be expected to personally know every exporter and is justified in relying on intermediaries, provided proper KYC verification is done. This decision provides significant relief to customs brokers, clarifying their due diligence responsibilities and protecting them from penalties when they act in good faith based on verified documentation from intermediaries.