2016 (11) TMI 903 - AT - Customs

Authorized Courier - revocation of registration - business of clearing express cargo imported / exported through Mumbai in the Courier Mode as Authorized Courier - violations of the Couriers Imports & Exports (Clearance) Regulation, 1998 - Held that - It is not in dispute that the Appellants had submitted in details as to how they had complied with the KYC verifications in the case of M/s. Smashing and other past clearances. They also informed about the steps taken to even revamp their website. No serious infringement of KYC verification leading to any significant revenue loss was pointed out, even in the Show Cause Notice. We have also seen that the Respondent himself has not considered violation of the KYC norms, as serious enough to merit of suspension - It is not in dispute that the Appellants had submitted in details as to how they had complied with the KYC verifications in the case of M/s. Smashing and other past clearances. They also informed about the steps taken to even revamp their website. No serious infringement of KYC verification leading to any significant revenue loss was pointed out. even in the Show Cause Notice. We have also seen that the Respondent himself has not considered violation of the KYC norms, as serious enough to merit of suspension. The Appellant and its employees have already faced much hardship and have been deprived of their livelihood for a considerably long period since suspension of their Courier registration since 25.9.2014 - no reasonable justification found to subject the appellants to any further punishment for minor lapses, if any, extending benefit of doubt. Revocation of the Courier Registration set aside - forfeiture of security at the time of registration of the courier License of ₹ 10 lakhs set aside - The Courier Registration of the Appellant stands restored with security deposit forthwith with consequential relief - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Maintainability of the Appeal
2. Inquiry and Procedural Compliance
3. Alleged Violations of Courier Regulations
4. Proportionality of Punishment

Issue-wise Detailed Analysis:

1. Maintainability of the Appeal:
The Tribunal examined whether the appeal against the order passed by the Commissioner of Customs as an Adjudicating Authority under Regulation 10 of the Courier Imports and Exports (Clearance) Regulations, 1998, was maintainable. The Tribunal found that the decisions cited by the Revenue did not address the maintainability of appeals in similar contexts. The Tribunal emphasized that Section 146 of the Customs Act, 1962, which governs Customs Brokers, specifically provides for appeals, whereas Section 157, under which the Courier Regulations were framed, does not. Therefore, the general statutory right of appeal under Section 129A of the Customs Act, 1962, applies. The Tribunal concluded that the impugned order was indeed appealable.

2. Inquiry and Procedural Compliance:
The Tribunal noted that the impugned order was passed without conducting and completing any inquiry, despite the suspension order being issued 'pending inquiry.' The High Court had directed the completion of the inquiry, but no such inquiry was conducted. The Tribunal found this to be a fatal error, rendering the impugned order void ab initio. The Tribunal also noted that the offer made by the appellants to reverify the delivery details in electronic mode was ignored by the Adjudicating Authority.

3. Alleged Violations of Courier Regulations:
The Tribunal addressed the specific violations alleged against the appellants:
- Regulation 13(j): The Tribunal found that the outsourcing of last-mile delivery to Blue Dart, an Authorized Courier, did not require prior permission under the Regulations.
- Regulation 8(2) and 13(h): The Tribunal noted that the appellants had provided proof of the appointment of qualified persons and that clearances were permitted without the signature and details of qualified persons until 15.08.2014.
- Regulation 13(a) and 13(j): The Tribunal found no serious infringement of KYC norms leading to significant revenue loss. The Tribunal also noted that the Respondent had not considered similar violations by another courier company as serious enough to merit suspension.
- Mis-declaration and Undervaluation: The Tribunal did not find it necessary to give detailed findings on the alleged activities concerning M/s. Smashing Traders Private Limited, as no inquiry was conducted, and the findings were entered without examining witnesses.

4. Proportionality of Punishment:
The Tribunal considered the proportionality of the punishment, noting that the appellants and their employees had faced significant hardship and deprivation of livelihood since the suspension of their Courier registration. The Tribunal referenced the Delhi High Court's observation in Falcon Air Cargo and Travels (P) Ltd. Vs Union of India, emphasizing the importance of proportionality in actions under fiscal statutes. The Tribunal concluded that there was no reasonable justification to subject the appellants to further punishment for minor lapses, if any, extending the benefit of the doubt.

Conclusion:
The Tribunal allowed the appeal, set aside the impugned order, and restored the Courier Registration of the appellant along with the security deposit of ?10 lakhs, with consequential relief.

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