2015 (4) TMI 1051 - HC - Customs

Forfeiture of the security furnished by petitioner in terms of Regulation 14(1) of Courier Imports and Exports (Clearance) Regulations, 1998 - sub-contracting - On an inspection being conducted and offence report was made by the Joint Commissioner, Air Cargo Complex, Bengaluru, which was to the effect that petitioner did not engage itself in the international transportation of goods i.e., collecting and delivering of goods as per Courier Regulations, it had outsourced its job by appointing agents namely M/s.ADP Express Private Ltd. to act as an agent to their Hong Kong shipments and M/s. Universal Courier Pvt. Ltd. for Singapore shipments. Hence, the Joint Commissioner of Customs was of the view that in terms of Regulation 13(j) of Courier Regulations the Authorized Courier was not entitled to enter into sub-contract or outsource its functions permitted or required to carry out by it in terms of Courier Regulations, without obtaining written permission of the Commissioner of Customs. Held that - In view of the fact that Commissioner of Customs instead of revoking licence had taken a lenient view and forfeited the bond amount, cannot be held either as being without authority or being disproportionate to prove infraction or not being in consonance with the Courier Regulations. Writ petition is hereby dismissed with costs. - Petitioner shall pay costs of ₹ 10,000/- to respondent - Decided against the petitioner.

Issues Involved:
1. Validity of the order dated 9-3-2015 passed by the Chief Commissioner of Customs.
2. Compliance with Regulation 13(j) of the Courier Imports and Exports (Clearance) Regulations, 1998.
3. Interpretation and application of Regulation 14(1) of the Courier Regulations.
4. Proportionality of the punishment imposed.
5. Impact of the forfeiture order on the petitioner's business operations.

Issue-wise Detailed Analysis:

1. Validity of the Order Dated 9-3-2015 Passed by the Chief Commissioner of Customs:
The petitioner sought to quash the order dated 9-3-2015 by the Chief Commissioner of Customs, which upheld the forfeiture of the security furnished by the petitioner as per Regulation 14(1) of the Courier Regulations. The Chief Commissioner found the forfeiture consistent with the regulations due to the petitioner's violation of Regulation 13(j). The court affirmed this order, finding no infirmity in the decision.

2. Compliance with Regulation 13(j) of the Courier Imports and Exports (Clearance) Regulations, 1998:
The petitioner, an Authorized Courier, had outsourced its door-to-door delivery functions without obtaining prior written permission from the Commissioner of Customs, violating Regulation 13(j). The Commissioner of Customs noted that the petitioner had entered into agreements with M/s. ADP Express Pvt. Ltd. and M/s. Universal Courier Pvt. Ltd. without the required permission, which continued for three years. The court upheld the finding that the petitioner failed to comply with the regulatory requirements, thereby justifying the forfeiture of the security.

3. Interpretation and Application of Regulation 14(1) of the Courier Regulations:
Regulation 14(1) allows for the revocation of registration and forfeiture of security for non-compliance with the bond conditions or regulations. The petitioner argued that the phrase "and also" should be read conjunctively, implying both actions must occur together. However, this contention was not pressed during the hearing. The court interpreted Regulation 14(1) to mean that either action could be taken independently, supporting the decision to forfeit the security without revoking the registration.

4. Proportionality of the Punishment Imposed:
The petitioner contended that the forfeiture was disproportionate to the procedural infraction of not obtaining prior permission. The court found that the Commissioner of Customs had taken a lenient view by not revoking the registration despite the violation. The forfeiture of the security was deemed appropriate and proportionate to the violation, aligning with the regulatory framework.

5. Impact of the Forfeiture Order on the Petitioner's Business Operations:
The petitioner argued that the forfeiture order adversely affected its business expansion plans and led to pending applications for registration in other jurisdictions. The court noted that the petitioner had no cause of action regarding applications pending before other Commissionerates and advised pursuing remedies in the respective jurisdictions. The court did not entertain this prayer, focusing solely on the compliance and proportionality of the forfeiture under the Courier Regulations.

Conclusion:
The court dismissed the writ petition, affirming the order dated 9-3-2015 by the Chief Commissioner of Customs and upheld the forfeiture of the security furnished by the petitioner. The petitioner was ordered to pay costs of Rs. 10,000 to the respondent within four weeks, failing which the amount would be recoverable as arrears of Land Revenue.

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