Custom, Excise & Service Tax Tribunal
M/S Tnt India Pvt. Ltd vs Cc (I&G), New Delhi on 8 July, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. II DATE OF HEARING : 08/07/2016. DATE OF DECISION : 08/07/2016. Customs Appeal Nos. 51063, 52412 of 2014 (SM) [Arising out of the Order-in-Original No. RT/ACE/62/2013 dated 20/11/2013 passed by The Commissioner of Customs, Exports New Customs House, New Delhi.] For Approval and signature : Honble Shri B. Ravichandran, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s TNT India Pvt. Ltd. ] Appellant Shri Rakesh Kumar Gupta ] Versus CC (I&G), New Delhi Respondent
Appearance S/Shri Sushmit Pushkar and Aayush Mehrotra, Advocates for the appellants.
Shri Dharam Singh, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri B. Ravichandran, Member (Technical) Final Order No. 52434-52435/2016 Dated : 08/07/2016 Per. B. Ravichandran :-
These two appeals are against same order of Commissioner of Customs (Export), Indira Gandhi International Airport, New Delhi and hence are taken up together for disposal. The appeals are against imposition of penalties under Section 112 (a) of Customs Act, 1962. One appellant (M/s TNT India Pvt. Ltd.) is a courier company engaged in the clearance of Courier Cargo through Customs and another appellant (Shri Rakesh Kumar Gupta) is employee of the first appellant. The brief facts of the case are that the officers of DRI, Lucknow Zonal Unit conducted certain enquiries in July, 2012 w.r.t. certain parcels consigned to one Shri P.K. Tiwari, New Delhi. On physical verification of the parcels it was found that instead of declared goods of CD writer, the actual goods were found to be memory cards in large quantity. Further investigations were conducted which finally resulted in initiation of proceedings against various parties. Upon adjudication, the Original Authority ordered the confiscation of goods valued at Rs. 74,97,500/-; imposed penalty of Rs. 5 lakhs on the consignee of the parcel; imposed a penalty of Rs. 1 lakh and Rs. 25,000/- on the present appellants; dropped proceedings against two customs officers. Relevant to the present appeals are the alleged role of the appellants in the violations of customs provisions in the import of the impugned goods. The Original Authority held that the appellant courier company and the representative of the company have abetted the improper importation of the goods by their acts of commission and omission. The main allegation upheld by the Original Authority is that the courier company violated the provisions of Regulation 12 (i) (iii) (iv) of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 which mainly deals with obligations of authorized courier. Clause (i) of the said regulation deals with authorization to be obtained from each consignee; clause (iii) deals with advice to be given to the consignee to comply with provisions of the Act, Rules and Regulations; clause (iv) deals with verification of antecedents, correctness of identity of the clients and functioning of his client in the declared address by using reliabling independent, authentic document, data or information.
2. The learned Counsel appearing for both the appellants submitted mainly on the following grounds :-
(a) the main appellant is an established reputed courier company known internationally and have been following the provisions of Customs Act and the Courier Regulations deligently ;
(b) the parcel which has come from Hong Kong was to have been delivered through the main appellant in terms of their arrangement with Hong Kong Courier company. Since the value declared in the document relevant to the parcel at the consignors end is only U.S. $ 120, in terms of proviso to clause (i) of Regulation 12 (1) for low value dutiable consignment authorization of the consignee may be obtained at the time of delivery of consignment ;
(c) Regulation 5 deals with clearance of imported goods. It has been specifically stipulated that the courier packages containing the imported goods shall not be dealt with in any manner except as may be directed by the Commissioner of Customs. It is also submitted that no person shall, except with permission of proper officer, open any packages of imported goods. As such, the appellant is not aware of the contends of the packages and acted on the basis of documents accompanying the parcels. They have not failed in any of their responsibility as they have acted as per the normal practice ;
(d) the charge of abetting improper import cannot be sustained against the appellants in the absence of any evidence of their prior knowledge of the possible mis-declaration and also any benefit to be accrued to them by the act of such abetment ;
(e) As per the findings of the Original Authority the statements given by the customs officers have been given weightage and it has been clearly recorded that the impugned goods have been examined by the officer of customs. If that being so, it is not clear how the mis-declarated items were cleared from custom area and were found in the couriers hub where on physical examination misdeclared cargo was found. The Original Authority relying on the statement of customs officers exonerated them from the charge of abetting whereas the appellants have been held to be abetting the improper import on similar set of facts ;
(f) the existence or non-existence of consignee in the given address cannot be pre-verified in case of small value cargo and the non-existence of consignee at the given address by itself cannot bring a charge of abetment against the courier company ;
(g) the decided case laws on similar set of facts clearly bring out that no penal action can be taken against the appellant courier company.
3. The learned AR submitted that based on the detailed examination and finding of the Original Authority it is clear that the courier company did not discharge their obligation in terms of the Regulation 12 which attracted penal action. He relied on Tribunals order in Grand Slam Express Pvt. Ltd. vs. CC, Airport, Mumbai reported in 2007 (216) E.L.T. 272 (Tri. Mumbai) to state that imposition of penalty on courier company is justified in these circumstances.
4. Heard both the sides and examined appeal records. The point for decision is the correctness of penal action against the appellants in the facts and circumstances of the case. Penalty under Section 112 (a) was imposed on both the appellants. Section 112 (a) relevant to present appeal, states :
Section 112 Penalty for improper importation of goods, etc. Any person, -
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abats the doing or omission of such an act, . In the present case the courier company acted in their capacity and there is nothing on record to indicate that they had any prior knowledge of the possible mis-declaration in the parcels. Regarding failure to discharge their obligations under Regulation 12, I find it is relevant to note that proviso to Regulation 12 (1) (i) makes it clear that the rigour of obtaining authorization for clearance of import goods has been relaxed in respect of low value dutiable consignments. Regulation 3 (ga) states low value dutiable consignments means an import consignment other than documents, gifts and samples of an invoice value not exceeding Rs. 1 lakh. In the present case the invoice value declared is U.S. $ 120, as such, the question of prior authorization is not a mandatory requirement. As regards to advice to be given to consignor and also to verify the antecedent of consignor it is apparent that in such low value consignments the contact with the consignee will generally be at the time of post clearance stage. It is not the case that in respect of each and every parcel received for delivery through a courier including small value parcel, gift, document etc. a pre-verification of the background of the consignee is to be carried out and the bill for clearance can be filed only on due satisfaction of the antecedents of the consignees in respect of each such parcel. No such stipulation could be read into the regulation.
5. Further, the charge of abetment against the appellant was sought to be established on the ground that they have not fully complied with Regulation 12 as discussed above. It is clear from the provisions of Section 112 (a) that such charge can be sustained only if any person who, in relation to any goods abets the doing or omission of an Act which would render such goods liable to confiscation. Apart from the allegation of non-fulfillment of certain obligations under Regulation 12 there is no allegation or evidence regarding the appellants act or omission which can be considered as abetting the improper importation. In other words, the allegation is that appellants omission to properly check the consignee resulted in the goods liable for confiscation. I find such proposition as untenable in the facts and circumstances of the case. It is important to note that in terms of Regulation 5 the courier packages shall not be dealt with or opened except with the approval of the proper officer. In the present case, the Original Authority recorded that the courier bill of entry is having endorsement of the officer for having examined the consignments. Apparently this has been admitted by the Original Authority irrespective of the fact that the second appellant in his statement given before the officers alleged to have admitted that no examination was done of the consignment. The Original Authority held that in the absence of any positive evidence the charge of abetment cannot be proved against the two customs officers who were also issued with notice for penalty under Section 112. He further held that there is no charge of malafide on the part of officers and also no charge of any pecuniary benefits accruing to the said officers. All these go to show that the officers have discharged their duty and the goods have been cleared after due examination. It is not clear then how the mis-declared item could be detected at the TNT hub of the courier company much away from the custom area. The Original Authority discounted the role of officers on the ground that the way bills were not tallied with the consignment at the time of examination in the TNT hub. However, he held the charge of abetment proved against the courier company only on the ground that they have failed in certain of their obligations under Regulation 12. Such failure resulted in abetment of improper imports. I find such conclusion is legally unsustainable as is evident from the facts of the case. The courier company acted based on the documents received by them. They have no means to know the contends of the parcel to be other than declared in the documents. If they have such knowledge a clear case of abetment could stand. Regarding verifying the consignee, if the import document declares the value as U.S. $ 120 the question of taking prior authorization from the consignee is not relevant. I find that different standards have been followed by the Original Authority in examining the charge of abetment one for the customs officers the other for courier company and its employee. On the one hand he held that the officers discharged their duty though it is clear that if the examination has been done before clearance as recorded by the Original Authority, the mis-declaration could not have escaped detection. However, for such mis-declaration the courier company has been found liable for penalty. It is apparent that while appreciating the factual evidence, the Original Authority did not follow consistency and arrived at different conclusions on same set of facts. This apparently is on the ground that there is a statutory regulation for the courier company. I find that while the statements given by the officers have been accepted as truth, the statement given by the employee of courier company has been discounted selectively, at least w.r.t. the fact of examination of cargo before clearance.
6. In Lemuir Air Express, New Delhi vs. CC, New Delhi reported in 1986 (26) E.L.T. 608 (Tribunal), the Tribunal held that when the air cargo agent had no knowledge about the contends of the consignment and relied upon the information passed on by the exporter to them penalty cannot be imposed on them. In Syndicate Shipping Services (P) Ltd. vs. CC (Imports), Chennai reported in 2004 (171) E.L.T. 72 (Tri. -
Chennai), the Tribunal held that there should be a case of intentionally aiding the commission of crime to hold the charge of abetment. In the absence of such intention being established penalty cannot be imposed. In Anchor Logistics vs. CC reported in 2013 (290) E.L.T. 334 (Guj.), the Honble Gujarat High Court held that in the absence of prior knowledge of CHA regarding mis-declaration of the consignment no penalty can be levied.
7. I find that the reliance placed by the learned AR on the Tribunals decision in Grand Slam Express Pvt. Ltd. vs. CC, Airport, Mumbai (supra) is not suitable in the present case. In the said case the courier agent filed bill of entry and weight declared did not tally with the actual weight. Further, it is not clear from the order as to the value of consignment. The Regulation 1998 was subject matter of discussion in the said order.
8. Considering the above analysis and discussion, I find that the charge of abetment cannot be sustained against the appellant in the facts and circumstances of the case. Accordingly, I set aside the impugned order w.r.t. the penalties imposed on both the appellants. The appeals are allowed.
(Operative part of the order pronounced in the open court.) (B. Ravichandran) Member (Technical) PK ??
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