2016 (10) TMI 225 - AT - Customs

Imposition of penalty - mis-declaration of goods - Courier company - can the appellant be held responsible for any mis-declaration done by the consignor or consignee as they are merely a courier company? - Held that - the Regulation 13 of the Courier Imports and Export (Clearance) Regulations 1998 prescribed an obligation to authorized couriers shall exercise due diligence to ascertain the correctness and completeness of any information which he submits to the proper officer with reference to any work related to the clearance of import goods or of export goods. When Customs could detect the mis-declaration simply by examining the weight of the consignment with respect to declaration made it could have been possible for Courier Agency exercising due diligence to detect the same - the due diligence has not been exercised by the courier company - penalty reduced keeping in view the infringement and facts of the case - decided partly in favor of appellant.

Summary

Issues: Mis-declaration of goods, Penalty imposition, Due diligence of courier company

Mis-declaration of goods:
The case involved M/s DHL Express (I) Pvt. Ltd. being issued a show-cause notice for mis-declaration of goods valued at ?8 lakhs, resulting in a penalty of ?50,000 being imposed on them. The appellants argued that as a courier company, they cannot ensure the accuracy of goods declared by the sender. They referenced a previous Tribunal decision to support their stance that the courier cannot be held accountable for incorrect declarations by the consignor or consignee. However, Customs Regulation 13 mandates courier companies to exercise due diligence to ensure the accuracy of information submitted regarding import or export goods. The lower authorities found the appellants lacking in due diligence and upheld the penalty.

Penalty imposition:
The lower authorities imposed a penalty of ?50,000 on M/s DHL Express (I) Pvt. Ltd. for failing to exercise due diligence in detecting mis-declaration of goods. The appellant argued against the penalty, reiterating their position that they cannot be held responsible for inaccuracies in declarations made by others. The Tribunal acknowledged the obligation under Regulation 13 for courier companies to exercise due diligence in verifying information related to import or export goods. Despite reducing the penalty to ?25,000 considering the circumstances, the Tribunal upheld the imposition of a penalty due to the lack of due diligence by the courier company.

Due diligence of courier company:
Regulation 13 of the Courier Imports and Export (Clearance) Regulations, 1998 stipulates that authorized couriers must exercise due diligence to ensure the accuracy and completeness of information submitted to Customs regarding import or export goods. The Tribunal noted that Customs detected the mis-declaration based on the abnormal weight of the consignment compared to the declared goods. It was observed that the courier agency could have detected the mis-declaration by exercising due diligence, as Customs did. Consequently, the Tribunal found that due diligence was not adequately exercised by the courier company, leading to the penalty imposition. Despite reducing the penalty amount, the Tribunal emphasized the importance of fulfilling the due diligence obligation for courier companies in handling import and export goods.