By TIOL News Service

MUMBAI, JAN 06, 2016: THE facts of the case are that the Appellant, a courier company, filed a courier Bill of Entry wherein the description of the goods was declared as Spare Parts and value was declared as Rs.2934/-.

It appeared that there was mis-declaration of goods and gross under valuation, therefore, the carton was detained.

The carton was opened and examined under a panchanama in the presence of the authorized representative of the Appellant & the courier company, which resulted in recovery of 2 sets of ARRI Alexa Camera alongwith view finders and accessories including cables valued at approx. Rs. 30 Lakhs per piece, total value approx Rs. 60 Lakhs (CIF), and 10 pieces of Sony SXS Pro SBP-32GB Flash memory modules each valued at approx. Rs. 50,000/-, thus totally valued at approx. Rs. 5 Lakhs (CIF). Consequently, the goods valued at Rs. 65 Lakhs were seized.

The Commissioner adjudicated the SCN, wherein inter alia, he imposed penalty of Rs. 1,00,000/- upon the Appellant on the ground that they have failed to exercise due diligence in performing their work as an authorized courier and thus, their inaction/negligence had led to the attempt of smuggling of costly goods in the guise of low value spare parts.

The appellant is before the CESTAT.

It is submitted that the penalty is imposed u/s 117 of the Customs Act whereas the SCN proposed imposition of penalty u/ss Section 112(a), 112 (b) and 114 AA of the Act. Moreover, no concrete evidence regarding their knowledge of the mis-declaration of the goods under seizure and their connivance in the attempt of evasion of duty has been pointed out in the o-in-o.

The AR emphasised that the Courier company failed in their obligation under the provisions of Courier Import and Export (Clearance) Regulations, 1998 and the Customs Act, 1962 which have rendered the goods liable for confiscation u/s 111 of the Act. Inasmuch as there was a good reason for the appellant to be suspicious of the parcel in view of the fact that the weight of the parcel was 22 kg but the value declared was less than Rs. 3000/-;that freight charges for the consignment was Rs.25,000/- and these facts should have automatically made the appellant suspicious of the consignment. That the courier company had failed in its obligation prescribed under Regulation 13(a), 13(b), and 13 (c).

The CESTAT observed -

"4. …I find that the appellants are a Courier Company and in ordinary course of business they do not come to know about the factual discretion (sic) of the goods or actual value of the same. They are only aware of the details as disclosed by the clients. As argued by the learned AR, it is seen that no allegation in respect of failure to follow regulation 13(a) have been made in the notice and therefore, he cannot place any reliance on any fact relating to failure to observe the said regulations. Furthermore, it is seen that no specific case of non-compliance, which was known to the appellant, was pointed out either in the notice or in the impugned order and therefore no allegation made for failure to observe the obligation under regulation 13(b) can be made. However, regulation 13(c) provides for a very wide scope. The appellants were required to exercise due diligence. The fact that the weight of consignment was 22 kg and the freight was Rs.25,000/- but the declared value was less than Rs. 3000/- should have raised suspicion. Therefore, it is felt that it was possible for the appellant to exercise due diligence in respect of the consignment. Considering that the appellants are in the courier business such consignments are indeed the outliners and needed closer scrutiny. However, considering the facts of the case, it is felt that the penalty imposed of Rs.1 lakh is excessive and penalty under Section is revised to Rs. 10,000/- only…""

The Appeal was partly allowed.

(See 2016-TIOL-50-CESTAT-MUM)