2017 (3) TMI 447 - AT - Customs

Imposition of penalties - recovery of red sander wood logs in courier package shipped - natural justice - Held that - The appellant is a courier that accepts packages from other booking agencies. There is no requirement for the courier to examine cargo or items that are shipped through them. It is a normal practice for such entities to rely upon the documents furnished by those who actually do the booking at the customer s end - there being no evidence that the appellant was aware of the illegal nature of the shipment being effected or that the appellant was aware that the owner was the said Syed Ismail and not Frankie as mentioned in the documents, the ingredients for the imposition of penalty u/s 114 and 114AA does not exist - appeal allowed - decided in favor of appellant.

Summary

Issues:
Recovery of 'red sander wood logs' in courier package; Penalties under sections 114 and 114AA of Customs Act, 1962; Quashing of penalty under section 158; Mis-declaration of goods; Involvement of courier in illegal shipment; Failure to hear the appellant before passing the order; Reliance on documents furnished by booking agencies; Imposition of penalties on the courier.

The judgment pertains to a dispute involving the recovery of 'red sander wood logs' in a courier package shipped by Frankie through the appellant M/s Bombino Express Pvt Ltd. The original authority imposed penalties of ?50,000 under section 114 of the Customs Act, 1962, ?25,000 under section 114AA of Customs Act, 1962, and ?25,000 under section 158(2)(ii) of the Customs Act, 1962 read with Courier Imports and Exports (Clearance) Regulations, 1998. The appellant appealed, resulting in the penalty under Section 158 being set aside, but the other two penalties remained, leading the appellant to approach the Tribunal.

The impugned order-in-appeal highlighted that the goods were mis-declared as 'door supporting wooden cut pieces for personal use,' with the consignee listed as 'Frankie,' although it was actually claimed by Syed Ismail. This discrepancy was considered indicative of the courier's involvement in the illegal shipment, demonstrating slackness on their part. The Commissioner of Customs (Appeals) noted these irregularities, forming the basis for the penalties imposed.

During the proceedings, the appellant argued that they were not given a fair hearing and that the courier shipping bill was based on documents provided by other booking couriers who were not made noticees. The appellant contended that since the penalty under section 158 was quashed, the other penalties should also be revoked as no specific rule or regulation violation was proven. The appellant, as a courier, emphasized that they typically rely on documents furnished by booking agencies and are not required to inspect the cargo.

The Tribunal considered the lack of evidence indicating the appellant's awareness of the illegal nature of the shipment or the true owner of the goods. Given that one penalty was set aside and no proof existed that the appellant knowingly participated in the illegal activity, the Tribunal concluded that the elements necessary for imposing penalties under sections 114 and 114AA were absent. Consequently, the appeal was allowed, and the impugned order was overturned.

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