2023 (8) TMI 1003 - AT - Customs

Levy of penalty u/s 112 (a) of the Customs Act, 1962 - authorized courier - not obtaining authorization from the consignee for the import of the consignment - failure to comply with Regulation 13 of the Courier Regulations - HELD THAT - The facts have revealed that the appellant had no knowledge about the incident of manipulation of their office system and the clearance of the consignments falsely declared as documents . Sri Naveen Kumar who was a former employee of the appellant has categorically admitted that he is only responsible for the manipulation committed and that no one in the office of the appellant as well as the appellant is involved in the offence. The SCN also has not alleged any role played by the appellant in the clandestine activity. Apart from alleging that appellant did not obtain any authorization there is no overt act of involvement established against the appellant. It is also seen from the records that Sri Naveen Kumar was terminated from services. Sri T.S. Narayanan, who is the General Manager of the appellant authorized courier has submitted before the officers that all the consignments were booked by M/s.Jupiter Import Export Pte. Ltd., Singapore. The appellant has cooperated with the investigation so as to bring out the truth. On appreciation of the evidence, we do not find grounds to hold that the appellant had played any role in the incident. In such circumstances, the order of revocation of the license cannot be sustained and requires to be set aside. However, as the appellant has not obtained authorization from the importer, the forfeiture of security deposit would be adequate. Forfeiture of Rs.10 lakhs is on the higher side - forfeiture of Rs.5,00,000/- would be sufficient. Appeal allowed in part.

Summary

Issues Involved:

1. Whether the appellant failed to comply with Regulation 13 of the Courier Imports and Exports (Clearance) Regulations, 1998.
2. Whether the revocation of the appellant's registration as an authorized courier and the forfeiture of the security deposit was justified.

Summary:

Issue 1: Compliance with Regulation 13 of the Courier Imports and Exports (Clearance) Regulations, 1998

The Directorate of Revenue Intelligence (DRI), Chennai Unit, received intelligence about smuggling activities involving gold jewellery and other goods from Singapore through courier parcels booked via the appellant, M/s. UPS Jet Air Express Pvt. Ltd. Surveillance and examination of 58 courier parcels revealed undeclared items including gold jewellery, leading to the seizure of goods valued at Rs.3,32,51,885/-. Statements from various individuals, including the appellant's employee, Mr. Naveen Kumar, indicated manipulation of the appellant's internal system to facilitate smuggling. The appellant was accused of failing to obtain authorization from the consignee for the import of the consignment, violating Regulation 13 of the Courier Imports and Exports (Clearance) Regulations, 1998.

Issue 2: Justification of Revocation and Forfeiture

The original authority revoked the appellant's registration as an authorized courier and ordered the forfeiture of Rs.10 lakhs as a security deposit. The appellant contended that the manipulation was solely the act of their employee, Mr. Naveen Kumar, without the appellant's knowledge. The appellant argued that they had handled over 40,000 consignments without issues and that the revocation of the license was too harsh for a minor infraction. The Department argued that the appellant had not exercised due diligence, which led to the smuggling incident.

Judgment:

The Tribunal found that the appellant had no knowledge of the manipulation and that Mr. Naveen Kumar had admitted sole responsibility for the clandestine activities. The show cause notice did not establish any overt involvement of the appellant in the smuggling. The Tribunal concluded that while the appellant failed to obtain authorization from the consignee, the revocation of the license was not justified. However, the forfeiture of the security deposit was deemed appropriate but reduced from Rs.10 lakhs to Rs.5 lakhs. The appeal was partly allowed, setting aside the order of revocation and modifying the forfeiture amount.