2024 (5) TMI 77 - AT - Customs

Levy of penalty for abetting in mis-declaration of imported goods - Revocation of Courier License - authorized courier agent - mis-declaration of the value - Shipment without proper KYC verifications and authorization of the import - violation of the provisions of Courier Imports and Exports (Electronic Declaration and processing) Regulations, 2010 - HELD THAT - As the appellant is only facilitating the customs transaction on behalf of principal, (importer/exporter), the absence of mens-rea, penalty is not imposable, otherwise all the customs transaction will come to halt, if penalty is imposed on the customs broker the omission /commission of exporter/importer. Moreover, in the impugned order Adjudication Authority itself held that there is no illegality revealed related to goods cleared through the appellant. Appellant has not received any authorization for filing the courier bills of entry. However, while submitting reply to show cause notice, appellant submits that the importer is identified and appellant had caried out KYC verification such as IEC and GST registration as per information provided by Mr. Ajit. Moreover, the appellant produced Email communication as proof of authorization and thereby complied with the KYC verification. The absence of any provision which mandate receipt of KYC directly by courier agency u/s 146 of Customs Act,1962, finding of violation of the Regulation 12(i) is unsustainable. The bills of entry were filed by G Card holder Shri. V.V. Suresh, who is an authorized person to file bill of entry as per section 146 of Customs Act,1962. Thus, in the absence of any evidence regarding filing of bill of entry by Shri. I. S. Patil and not G Card holder Shri. V. V. Suresh, violation of the Regulation 12(ii) is unsustainable as held by the adjudicating authority. As regards violation of the Regulation 12 (iv) (vi) of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, the adjudicating authority held that the delivery address of the importer is in Delhi and appellant has not verified the identity of the client by using reliable, independent document. Moreover, even as per the allegation in the SCN, there is no import of prohibited/restricted goods and there is no allegation related to goods cleared by appellant. Thus, appeal is allowed by setting aside revocation of courier license and enforcement of Bond and Bank guaranty executed in connection with registration/license. Penalty imposed on the appellant u/s 117 of the Customs Act, 1962 is set aside. Penalty imposed on the appellant under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 is also set aside.

Summary

Issues involved:
The issues involved in this case include abetment in mis-declaration of imported goods, imposition of penalties under Regulation 14 of the Courier Import and Export Regulations and u/s 117 of the Customs Act, 1962, violation of Courier Imports and Exports Regulations, and sustainability of the proceedings against the appellant.

Abetment in Mis-declaration of Imported Goods:
The appellant, an authorized courier agent, was alleged to have abetted another entity in importing goods through Bengaluru Airport by mis-declaring their value. The adjudication authority revoked the appellant's license, enforced the bond and bank guarantee, and imposed a penalty under Regulation 14 of the Courier Import and Export Regulations and u/s 117 of the Customs Act, 1962. However, the investigation did not find any under-valuation or misdeclaration related to the imported goods facilitated by the appellant. The appellant argued that the proceedings against them were illegal and unsustainable, citing relevant legal decisions in support.

Violation of Courier Imports and Exports Regulations:
The Revenue contended that the appellant contravened various provisions of the Courier Import and Export Regulations by facilitating the import of goods in violation of KYC norms and authorization requirements. The appellant was accused of not fulfilling obligations under the Regulations and the terms of the bond, as well as filing bills of entry without proper authorization. The Revenue argued that the appellant's actions were in breach of Regulation 12(i) and 12(ii) of the Courier Import and Export Regulations.

Penalties Imposed:
The Tribunal observed that penalties under Section 117 of the Customs Act, 1962 can only be imposed when no express penalty is provided elsewhere. In this case, penalties were proposed under Regulation 14 of the Courier Import and Export Regulations, making the invocation of Section 117 unsustainable. The Tribunal also noted that as the appellant acted as a facilitator in customs transactions, without mens rea, penalties were not applicable. The Adjudication Authority itself found no illegality related to the goods cleared through the appellant.

Sustainability of Proceedings:
The Tribunal examined the evidence and found that the allegations of fraud and violation of regulations were not sustainable. The appellant had conducted KYC verification and had authorization for filing bills of entry. The Tribunal concluded that the proceedings against the appellant were based on initial statements that were later contradicted, and the allegations of violation of Regulations 12(i) and 12(ii) were deemed unsustainable. The Tribunal allowed the appeal, setting aside the revocation of the courier license, enforcement of the bond and bank guarantee, and the imposed penalties.