Custom, Excise & Service Tax Tribunal
Fedex Express Transportation And ... vs Commissioner Of Customs-New Delhi Acc ... on 19 September, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
Customs Appeal No. 50037 of 2024
(Arising out of Order-in-Appeal No. CC(A)Cus/D-1/ACC/EXP/57/2023-24 dated
10.05.2023 passed by the Commissioner of Customs(Appeals), New Customs House,
New Delhi)
FedEx Express Transportation and ...Appellant
Supply Chain Services India Pvt Ltd
New Courier Terminal,
Near IGI Airport
New Delhi- 110037
VERSUS
Commissioner of Customs ...Respondent
Air Cargo Comples (Export) New Customs House Near IGI Airport, New Delhi APPEARANCE:
Ms. Kruti Parashar and Ms. Anjali Singh, Advocates for the appellant Shri Rohit Issar, Authorised Representative for the Department CORAM: HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) Date of Hearing: 08.09.2025 Date of Decision: 19.09.2025 FINAL ORDER NO. 51326/2025 DR. RACHNA GUPTA The present order disposes an appeal arising out of order in appeal no. 57/2023-2024 dated 1.05.2023 vide which penalty of Rs. 1 lakhs imposed on the appellant under section 117 of Customs Act, 1962, has been upheld. The facts in brief which culminated into the said adjudication are as follows:
2. M/s FedEx Express Transportation and Supply Chain Services (India) Pvt. Ltd., the appellant herein had filed two shipping bills dated 04.10.2019 for export of goods under two Airway Bills bearing No. 491686444350 and 107294934569 based on two different invoices bearing no. 031 and 0986 respectively both dated 03.10.2019
2 C/50037/2024 declaring that the consignment has copper wires of the value of Rs. 10,000/- and Rs. 20,000/- respectively. On the x-ray screening, due to suspicious visual images, the consignments were detained vide Detention Memo dated 04.10.2019. The goods of both the consignments got examined by the Wildlife Inspector under Panchnama dated 25.10.019. The said Inspector vide report dated 25.10.2019 concluded as below:
i) The export consignment covered under AWB no.
491686444350 contained 12 pieces of sandalwood totally weighing 27.30 kgs.
ii) The export consignment covered under AWB no.
107294934569 contained two logs of sandalwood wrapped by metallic wire weighing 63.15 kgs.
3. Based on the said report, both the consignments were seized vide Seizure Memo dated 25.10.2019. The concerned jurisdictional Commissionerate also informed, vide letter dated 07.01.2020, that the exporter Shri P. Dhanaraj was not found available at the address mentioned on the KYC document (the Aadhar Card). The statement of Shri Deepal Singh Khati, the Clearance Specialist of the appellant was recorded, who stated about declaring copper wire based on the declaration given by the exporter. He also stated about voluntarily notifying to the Customs department vide their letter dated 04.10.2019. It was also stated that except for relying about the authenticity about the Government ID card as per the KYC norm, no other verification was done at the end of the appellant. Admittedly, exporter Shri P. Dhanaraj had never earlier exported any consignment through the appellant.
3 C/50037/2024
4. Based on the said observations during investigation the show cause notice bearing no. 11/2020 dated 22.04.2020 was served upon the appellant as well as the exporter Shri P. Dhanaraj. Penalty under Section 114 and Section 117 of Customs Act, 1962 was proposed to be imposed upon the appellant and a recommendation for appropriate action as per Regulation 13 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 (herein referred to as CIER, 2010) for failing to fulfill the obligations under Regulation 12 of the said Regulations was also proposed. The said proposal was initially adjudicated vide order in original vide order no. 49/2021 dated 02.08.2021 imposing penalty of Rs. 1 lakh under Section 117 of the Customs Act only and refraining from the recommendations as were proposed. The said order has been confirmed vide the impugned order in appeal dated 10.05.2023. Still being aggrieved, the appellant is before this Tribunal.
5. I have heard Ms. Kruti Parashar and Ms. Anjali Singh, learned counsel appearing for the appellant and Shri Rohit Issar, Authorised Representative for the Department.
6. Learned counsel for the appellant has submitted that the appellant operates globally for providing courier services, however, for non-core and peripheral support services as that of picking up and dropping off of local deliveries, the appellant had appointed M/s Universal Freight Solutions, Bangalore as the Authorised Shipper Participant (hereinafter referred to as ASP) who may further had logistics partners. The consignment in question was physically handed over to ASP by Mr. Vinay of MSN Logistics who had collected it from the consignor, Mr. P. Dhanaraj, at a location as requested by the 4 C/50037/2024 consignor himself. Learned counsel further submitted that the appellant collected the KYC detail of the said consignor in the form of Aadhar Card along with two invoices i.e. one bearing no. 0986 consisting of two 100m copper cables valuing at Rs. 20,000/- and another bearing no. 031 declaring one 100m copper cable valuing at Rs. 10,000/- both dated 03.10.2019. The impugned courier shipping bills were based on the said documents. Learned counsel for the appellant impressed upon that the moment the confusion about the contents of the consignment arose, the appellant had voluntarily notified the mis-declared shipment to the Customs for further inspection and processing. Thus, apparently there is no violation of any of the regulations of CIER, 2010. Hence, the penalty even under section 117 of the Customs Act has wrongly been imposed. It is submitted that the impugned order has traversed beyond the show cause notice in holding that the appellant has violated Regulation 12 (1)(iii) of CIER, 2010 despite that there was no such allegations in the show cause notice. Decision of Hon'ble Supreme Court in the case of Commissioner of Customs versus Toyo Engineering India Ltd. 2006 (201) E.L.T 513 (S.C.) has been relied upon.
6.1 With respect to alleged violation of Regulation 12 (1)(iv), it is submitted that as per Circular No. 7/2015-Cus dated 12.02.2015, in case of individuals, only one document which contains both viz. the proof of identity and proof of address shall be sufficient. Aadhar Card has been held to be one of such valid documents for individuals, which was duly collected by the appellant. The Board vide Circular No. 2/2018 dated 12.01.2018 has clarified the Aadhar Card is a proof of permanent address 5 C/50037/2024 even if the same is different from the current address. The Aadhar Card, therefore, suffices as a KYC document for the said individual. The said Aadhar Card has never been alleged to be incorrect or forged or that it does not belong to the consignor. Hence, the violation of Regulation 12(1)(iv) is wrongly confirmed. Finally, it is submitted that the appellant accepted the goods on "said to contain", as a courier agency. Such being the circumstances, the appellant cannot be penalized for incorrect declaration made by the consignor. Following decisions have been relied upon:
i) Patel Parcel Services Pvt Ltd vs Commissioner of Customs [2018 (363) ELT 401 (Tri. All.)]
ii) TNT Private Ltd vs Commissioner of Customs [2018 (363) ELT 199 (Tri. Del)]
iii) DHL Express India Pvt Ltd vs Commissioner of Customs [2016 (332) ELT 169 (Tri. Mumbai)]
iv) Fle Fast Line Express Pvt Ltd vs Commissioner of Customs (Air Cargo Export), New Delhi [2021 (378) ELT 361 (Tri Del.)]
v) Fedex Express Transportation and Supply Chain Services (India) Pvt. Ltd. vs. Principal Commissioner of Customs (Final Order No. A/87108-87110/2024 dated 24.11.2024 passed in C/85054/2023)
6.2 Learned counsel further submitted that the penalty otherwise could not have been imposed under section 117 of Customs Act for alleged violation of CIER, 2010. Following decisions have been relied upon :
6 C/50037/2024
i) Orbit Trans Express & Freight Pvt. Ltd. versus Commissioner of Customs, Airport and Air Cargo Commissionerate, Devanahalli, Bengaluru [2024 (5) TMI 77 - CESTAT BANGALORE]
ii) DHL Express India Private Limited v. Commissioner of Customs [2016 (332) E.L.T. 169 (Tri. - Mumbai)] 6.3 With the above submissions, the order under challenged is prayed to be set aside and the appeal is prayed to be allowed.
7. While rebutting these submissions, learned Departmental Representative has submitted that present is the clear cut case of mis-
declaration by the appellant as a courier agency while filing the shipping bills with respect to the export consignment. The consignment was declared to contain the copper wire. However, red sandalwood was found when the consignments were examined after x- ray examination, based on the suspicion arose. It is impressed upon that one of the Airway Bill bearing no. 491686444350 was found to have no copper wire and only sandalwood. The another Airway Bill bearing No. 107294934569 was found having copper wire but wrapping upon red sandalwood log.
7.1 Learned departmental representative also brought to notice that the consignment under AWB No. 491686444350 was open checked by the authorised person of M/s Universal Freight Solutions namely Balaji Singh as is coming from appellant's own letter dated 20.03.2020 (RUD VIII) declaring the said consignment to contain copper wire, is an apparent act of mis- declaration. M/s Universal Freight Solutions is admittedly the ASP/agent of the appellant. The appellant is clearly liable for the 7 C/50037/2024 wrong committed by its agent. The said act amounts not only to a violation under Regulations of CIER, 2010, rather it is an act of criminal consequences.
7.2 Learned Departmental Representative further impressed upon that there is apparent allegations in the show cause notice against the appellant that appellant had failed to give intimation about the wrong declaration to the Customs authority and has also failed to exercise due diligence to verify the antecedents, identity of his client and the functioning of the client in the declared address as the address mentioned in the KYC documents (Aadhar Card) and the address from where the impugned consignment were picked up were two different addresses and no verification was conducted at the end of the appellant. Hence, there is no infirmity in the order while imposing penalty upon the appellant under section 117 of the Customs Act. The appeal is prayed to be dismissed.
8. Having heard the rival contentions and perusing the entire records, it is observed that the penalty under section 117 of Customs Act, 1962 has been imposed upon the appellant for failure to fulfill the obligations of Regulations 12 (iii), (iv) and (v) of CIER, 2010 alleging mis-declaration and under-valuation in the two export consignments for which the shipping bills were filed by the appellant.
9. I have observed following to be the admitted facts in the case:
i) The export consignment was booked up by P. Dhanaraj at Chittoor, Andhra Pradesh;
ii) Shri Vinay of MSN Logistics, the sub agent of appellant/agent of M/s Universal Freight Solutions, ASP of the appellant had 8 C/50037/2024 collected the said consignment from the locations around Navrang Raja Ji Nagar, Bangaluru;
iii) As per the KYC document (Aadhar Card) collected by the appellant from Shri P. Dhanaraj, his address is Chittoor, Andhra Pradesh.
iv) The address mentioned in the KYC is not the same as the address from where the consignment of the said Aadhar Card holder was picked up from the appellant to be couriered; and
v) The jurisdictional Commissioner wrote letter dated 07.01.2020 informed that said P. Dhanaraj is not available at the address mentioned in the said KYC documents.
10. These admitted facts are sufficient to hold that there has been lack of proper due diligence on part of the appellant. As per Regulations 12 (1)(iv) of CIER, 2010, the appellant was required to verify the antecedents of the exporter Sh. P. Dhanaraj. Regulation 12 (1)(iv) reads as follows:
"(iv) verify the antecedents, correctness of Importer Exporter Code (IEC) Number, identity of his client and the functioning of his client in the declared address by using reliable, independent, authentic documents, data or information."
11. The sub clause (v) of the said Regulation reads as follows:
"(v) exercise due diligence to ascertain the correctness and completeness of any information which he submits to the proper officer with reference to any work related to the clearance of imported goods or of export goods;"
12. The joint reading makes it clear that it is not simply a verification based on authentic document but a due diligence to ascertain the correctness and completeness of same is also the duty of the courier agency under CIER, 2010.
9 C/50037/2024
13. No doubt there is no allegation of Aadhar Card being forged and that there is presumption of correctness to the documents being issued by the Government Authority. Also there is no dispute with respect to the case laws relied upon by the appellant in this respect, specifically decision of this Tribunal in the case of S. Prakash Kushwaha & Co. versus Commissioner of Customs (Airport & General), New Delhi reported as 2023 (384) E.L.T. 89 (Tri.-Del.). However, the facts of the present case are found different from these cases as is apparent from the above quoted admitted facts.
14. The another glaring fact coming out from those admissions is that neither the appellant nor their ASP ever met consignor/exporter Mr. P. Dhanaraj and the consignment was not picked up from the declared address of the consignor but from a random location. There is no evidence on record that ASP or the appellant ever bothered to enquire and record the actual address of residence of the consignor when the consignor was actually not found residing at the address mentioned in the only KYC document received by the appellant. This observation is sufficient to hold that lack of due diligence is righty observed. Hence, there seems no infirmity in the order under challenge to this extent.
15. I have further perused from the appellant's own letter dated 20.03.2020 that the appellant has acknowledged that its ASPs are instructed to do 100 percent open check of shipments as a due diligence measure when they are picking up the consignments from their customers after duly collecting KYC document. Not only this, the appellant, vide the said letter, has also acknowledged that in the present case ASP M/s Universal Freight Solutions had checked only 10 C/50037/2024 one of the two consignments that is the consignment bearing AWB no. 491686444350 was 100 percent examined by the said ASP and the consignment under AWB no. 107294934569 was not examined. This admission of appellant when is examined in the light of the report of Wildlife Inspector dated 25.10.2019 it makes it clear that AWB no. 491686444350 was found to have no single weight/piece of copper wire except that 27.3 Kg of red sandalwood was found in the said consignment. Thus, there is mis-declaration despite knowledge that the consignment contains copper wire, it contained only wood. The wood has been testified to be red sandalwood. In the another consignment bearing AWB No. 107294934569, though copper wire was found but being wrapped on a wooden log which was testified to be the red sandalwood. The red sandalwood is a prohibited product in terms of section 2(33) of the Customs Act, 1962. This admitted fact clearly establishes that the appellant had failed to comply with the mandate of Regulation 12(1)(iii) of CIER, 2010.
16. Though the appellant has impressed upon sending an intimation to the Deputy Commissioner of Customs, NCT, IGI Airport vide its letter dated 04.10.2019, but apparently the said letter was sent after the x-ray examination got conducted by the Customs Authority. The ASP of appellant had complete knowledge about the contents of the consignment under AWB No. 491686444350 but still no requisite intimation was sent by the appellant/ASP to the Customs Authority about wrong declaration in the documents submitted by the exporter P. Dhanaraj. The appellant also filed the shipping bills mis-declaring the consignments irrespective that the nature of the wood would not be ascertained by the appellant and the courier agency is not required 11 C/50037/2024 to conduct such kind of final examination. But the fact remains is that consignment bearing AWB no. 491686444350 had no copper wire, still it was declared to contain only copper wire and consignment bearing AWB No. 107294934569 was not declared to have any kind of wooden logs but only copper wire. The declaration is apparently false. The mere contention of the appellant is that they had instructed the ASP to physically verify the consignment and to collect KYC cannot be sufficient due diligence required under CIER, 2010. Otherwise also, appellant is responsible for the act and conduct of its ASP/Agent. The Commissioner in the impugned order has recorded as follows:
"That it was responsibility of ASP to comply with Customs rules & regulations and KYC norms and that lapse is on the part of their ASP. It is evident that no pre-booking inspection was conducted in the present case, which is to be done as per SOP of the Appellant. Neither the Appellant nor their ASP met with the actual consignor/exporter and the impugned consignment was collected through a third person. The Adjudicating Authority has held that the Appellant cannot absolve their responsibility of following Customs rules and regulations as entrusted upon them. If whatever wrong or non-compliance is done by their ASP, the onus of that will be only on the Appellant. I find no infirmity in this finding of Adjudicating Authority. It is the Appellant who is registered under CIER, 2010 not their ASP and it is the Appellant who has to observe and follow all the rules and regulations under the Customs Act and CIER, 2010. From the above, it is clear that the Appellant has failed to observe the provisions of CIER, 2010 which was obligatory upon them.
Regarding the contention that contravention the provisions of the CIER does not amount to contravening the provisions of Customs Act and that penalty cannot be imposed under Section 117 for violation of provision of the CIER, 2010, I find that there are plethora of judgments where penalty under Section 117 of Customs Act has been upheld for violation of CIER regulations. In the case of Aramex India Pvt. Ltd. Vs Commissioner of Cus.-11, Airport, Mumbai-ll [2018 (364) E.L.T. 1064 (Tri. -Mumbai)], the Hon'ble Tribunal has held as under.
"As regards penalty imposed under Section 117 of the Customs Act, 1962, I find that the said
12 C/50037/2024 provisions are validly invoked in the said case as there is definitely a contravention of the provisions of Customs Act, 1962 on the part of the appellant herein. The contravention has to be viewed in holistic manner to hold against the appellant herein as there are violations of the Customs Act. Holding they are liable for penalty under Section 117 of the Customs Act, 1962 I find that the penalty imposed by the adjudicating authority on the appellant seems to be on the higher side. In order to meet the ends of justice I reduce the penalty to 75,000/- under the provisions of Section 117 of the Customs Act, 1962 and dispose of the appeal accordingly."
17. In the light of entire above discussion, I do not find any infirmity in these findings. Hence, the order under challenge, to the extent of imposing penalty of Rs. One Lakhs under section 117 of Customs Act, 1962 on appellant is hereby upheld.
18. Further due to the observation that the goods found in the consignment were prohibited goods (Red sandalwood), it is opined that the penalty under section 114 of Customs Act also gets attracted. But Commissioner (Appeals) has not given any categorical finding about said section. Since the Order in original has been upheld by the impugned order, same gets merged with the present order. Original adjudicating authority had discussed the proposal of imposition of penalty under section 114(i) is as follows:
"I hold that the impugned goods were liable for confiscation under Section 113(d), 113(h) and 113(i) of the Act. I find that the exporter bearing IEC from the DGFT and been allowed for export/import, should have been very well aware of the law procedure regarding the goods which he intends to export. I find that the exporter has attempted to export the items which were declared as prohibited. I observe from the facts and records that the exporter mis-declared the goods and did not mention pieces of sandal wood and red sandal wood in export documents. Further, the exporter was not found present on the address which he had mentioned in his documents/KYC. Moreover, the letter for personal hearing sent to the exporter has been received back as undelivered. The exporter has declared copper cable and did not declare the impugned goods. Thus, 13 C/50037/2024 it is crystal clear that the exporter was having mala- fide intention to export the prohibited goods. Hence, I hold that the exporter is liable for penal action under Section 114(i) of the Act."
19. Refraining from imposing the penalty under section 114 of the Customs act upon the appellant despite those findings is held to be an incorrect conclusion of the original adjudicating authority.
20. Further it is observed that while adjudicating the proposal of recommendation of proceedings under CIER, 2010, original adjudicating authority has held as follows:
"But I observe here that it is M/s FedEx Express who is registered as authorised courier with the Customs under the regulations of CIEDPR, 2010 not their ASP, M/s Universal Freight Solutions, Banglore. It is M/s FedEx Express who has to observe and follow all the rules and regulations under the Customs Act and CIEDPR, 2010. They cannot absolve their responsibility of following such compliance as entrusted upon them under the said Act ibid. If whatever wrong/or non-compliance is done by their ASP, the onus of that will be only upon them because as a registered courier with customs they are responsible for any deeds of their chain of agents not the agents directly. Hence, as admitted by Shri Deepal Singh Khati, Clearance Specialist of M/s FedEx Express during his statement that the lapse of verifying of KYC is on the part of their ASP, M/s Universal Freight Solutions, Banglore will be construed as the lapse of their part and thus, they failed to verify the antecedent, correctness of identity of his client and the functioning of his client as declared in the shipment by using reliable, independent, authentic documents, data or information."
21. Refraining from recommending action as per Regulation 13 of the CIER, 2010 is, therefore, opined to be the incorrect finding. Commissioner (Appeals) has been silent w.r.t. these two proposals of show cause notice which have not been accepted by the original adjudicating authority.
22. In view of entire above discussion, the matter is, therefore, remanded back to Commissioner (Appeals) for deciding w.r.t.
14 C/50037/2024 remaining two proposals of the show cause notice dated 22.4.2020 i.e.:
(i) Penalty as was proposed to be imposed under section 114 of Customs Act, 1962
(ii) The proposal recommending action as per regulation 13 of the CIER, 2010. Commissioner (Appeals) shall provide appropriate opportunity of hearing to the appellant vis-a-
vis said two proposals of the show cause notice. Department is also set at liberty to agitate all the respective grounds afresh on those two proposals.
23. Consequent to the entire above discussion, the order under challenge is confirmed w.r.t. penalty imposed under section 117 of Customs Act. However, the remaining order is set aside. Appeal is disposed off with the directions of remand, as stated above.
(Pronounced in the open court on 19.09.2025 ) (DR. RACHNA GUPTA) MEMBER (JUDICIAL) Diksha