REVOCATION OF REGISTRATION UNDER COURIER IMPORTS AND EXPORTS (CLERANCE) REGULATIONS, 1998

Regulations

The Central Board of Excise and Customs made a regulation called as ‘Courier Imports and Exports (Clearance) Regulations, 1998, (‘Regulations’ for short) which came into effect from 09.11.1998. These regulations define the expression ‘authorised courier’, its registration procedure, the obligations of the Authorised courier and the revocation of the registration of the Authorised courier.

Authorised Courier

Regulation 3(a) defines the expression ‘authorised courier’ in relation to import or export goods means a person engaged in the international transportation of the goods on express door to door delivery basis and is registered in this behalf by a Principal Commissioner of Customs or Commissioner of Customs, as the case may be.     

Registration

Regulation Nos. 7 to 10 provides the procedure for registration by a person who intends to work as Authorised Courier. The said registration is valid unless and until it is revoked under these Regulations. If the Authorised Courier is inactive for one year, then it is deemed to be invalid from the date after the expiry of one year. 

Obligations

The following are the obligations to be fulfilled by the Authorised Courier under these Regulations-

• Regulation 13(a) - the Authorised Courier may act as an agent of consignee or consignor for clearance exports or import of goods;
• Regulation 13(b) – to advise his client to comply with the provisions of the Customs Act, 1962 and rules and regulations made thereunder;
• Regulation 13(c) - to 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 import goods or of export goods;
• Regulation 13 (d) – not to withhold any information that has been received from the Department, from his client;
• Regulation 13(f) - not attempt to influence the conduct of any officer of Customs in any matter pending before such officer or his subordinates by the use of threat, false accusation, duress or offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing or value;
• Regulation 13(g) – to maintain records and accounts in such form and manner as may be directed from time to time by the Department and submit them for inspection to the concerned officer, wherever required.
• Regulation 13(h) – to file declarations, for clearance of imported or export goods;
• Regulation 13(i) -to verify the antecedent, 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;
• Regulation 13(j) - not sub-contract or outsource functions permitted or required to be carried out by him in terms of these regulations to any other person, without the written permission of the Principal Commissioner of Customs or Commissioner of Customs, as the case may be.

Revocation of registration

Regulation 14 provides that the registration of an Authorised Courier may be revoked and the security may be forfeited if the Authorised Courier contraventions any of the provisions of these regulations made thereunder; failure to comply with the conditions of the bond executed by him or for the misconduct of the Authorised Courier.

Case law for revocation of registration

In M/s. Skypak Services Specialists Limited Versus Union of India Through the Ministry of Finance (represented by its secretary), Department of Revenue New Delhi., Commissioner of Customs Mumbai, Chief Commissioner of Customs, Mumbai. - 2025 (7) TMI 12 - BOMBAY HIGH COURT, the petitioner acts as an Authorised Courier at the Mumbai terminal. Based on the intelligence received two consignments covered by Airway Bills carrying contraband jewellery were detained by the Department. The goods were declared as ‘Die and Hydraulic bottle jack’ valued at Rs. 8728/-. On the examination of the said 2 consignments the Department found the gold jewellery weighing 4879.9 grams concealed in the die. The worth of the said gold is Rs.1.21 crore.

The importers were controlled by one Sri Manusukhlal Dhanak without obtaining proper authorisations from the consignees. On investigation it was revealed that the petitioner had cleared more than 250 consignments describing as ‘hydraulic jacks, dies and bladeless fans’ from the period April 2012 to October 2012. Statements were recorded from the petitioners and their employees. From this it was revealed that Mohan Naik acted as an intermediary and Dhank made payments through illegal channels. Further it was noticed that the petitioner has not complied with the obligations cast upon the petitioner under these regulations.

A show cause notice was issued to the petitioner. Proceedings were initiated against the petitioner by the Department. The petitioner filed reply to the show cause notice. The Adjudicating Authority found that the petitioner has not carried out its obligations under Regulations 13(a), 13(c),13(g),13(i) and 13(j). Therefore, the registration of the petitioner was deregistered under Regulation 14 with forfeiture of security deposit.

Against this order, the petitioner filed appeal before Chief Commissioner of Customs. The Commissioner confirmed the order-in-original. Therefore, the petitioner filed the present writ petition before the High Court challenging the order of the Authority and appellate Authority.

The High Court analysed the provisions of the Regulations in detail. The petitioner submitted the following before the High Court-

• Mohan Naik who sought the said courier service from the petitioner and Shri Mansukhlal Dhanak, the consignee has accepted in their statement that the petitioner was authorised to clear the imported goods. There is no dispute that the petitioner was authorised by these two people for clearing the consignments under consideration. Therefore, there is no violation of Regulation13(a).
• In regard to Regulation 13(i) the petitioner submitted that the petitioner verified import and Export Code on the portal of the Department and thus complied with the said Regulation.
• In regard to Regulation 13(g) the petitioner had maintained the required documents and therefore, complied with Regulation 13(g).
• The petitioner has not sub contracted its functions to any other persons and thus it complied with the Regulation 13(j).
• The revocation of licence and forfeiture of security deposit is disproportionate.
• There is no mens rea on the petitioner in noncompliance of the Regulations.

The respondents submitted the following before the High Court-

• The date of authorisation is 11.04.2012 whereas the consignments under consideration are of 08.11.2012. Therefore, there is no authorisation under these Regulation. Further the authorisation submitted by the petitioner is a fabricated one and not in the name of the importer and not issued by the original importer.
• Based on the statement recorded, the petitioner failed to verify the identity and functioning of its client despite being obligated to do so. Dhanak deposed in his statement that he has no IEC which has not been rebutted by the petitioner and the addresses were fake and bogus. Therefore, contention of the petitioner that it had complied with Regulation 13(i) is not correct.
• The Department relied on the findings of the Commissioner and the Commissioner of appeals from which it can be proved that the petitioner has not complied with the Regulation 13(g).
• The petitioner has no doubt complied with Regulation 13(j).

The High Court considered the submissions and analysed the provisions of Regulation 13 which requires the obligations to be fulfilled by the importer. The High Court -

• In regard to Regulation 13(a), the High Court observed that the document dated 11.04.2012 relied upon by the petitioner to submit that they have complied with Regulation 13(a) cannot be Secondly, the said document is dated 11.04.2012 whereas the consignment detained is of 08.11.2012. The said document does not say the petitioner is authorized to clear the goods imported by the importer for all times to come accepted as an authorization contemplated under the said Regulation for various reasons. The authorization, is not in the name of the petitioner. The said document only states that the delivery will be taken from Andheri office and the consignment should not be sent to Rajkot, but in the name of another entity. Therefore, the High Court held that clearly there is serious violation of Regulation 13(a).
• In regard to Regulation 13(i) the High Court held that merely, verifying the IEC from the portal of the respondents would not relieve the obligation cast under Regulation 13(i) for verifying the antecedent, identity and functioning of the importer on the declared address. The petitioner’s counsel himself has admitted that the business from these 3 entities were received through one Shri Mohan Naik, who was an intermediary. in a period of 6 months around 250 consignments were cleared on behalf of the entities owned by Shri Mansukhlal Dhanak. The statements recorded of Shri Dhanak, Shri Naik and Shri Menezes clearly evidences that the petitioner did not know anything about the entities of Shri Dhanak which clearly violates Regulation 13(i). Therefore, the High Court held that the petitioner did not discharge its obligation under Regulation 13(i).
• In regard to Regulation 13(j) the High Court held that the Court has not been shown any records or documents. The order in Order-In-Original categorically stated that the petitioner could not produce any authentic records of the entities controlled by Shri Mansukhlal Dhanak. In the absence of any perversity shown in the impugned orders and the failure of the petitioner to produce any records before the High Court, the High Court did not agree with the contention of the petitioner that there has been compliance of Regulation 13(g).
• In regard to Regulation 13(j) the High Court observed that since the petitioner has not subcontracted its functions, Regulation 13(j) cannot be said to have been violated. Therefore, the findings of both authorities, insofar as this regulation is concerned, are vulnerable.
• In regard to regulation 14, the High Court already held that have already held that the petitioner has not carried out its obligation under Regulation 13(a),13(g) and 13(i). Therefore, the case of the petitioner squarely falls within Regulation 14(1)(b).  Shri Dhanak has admitted in his statement that payments for all these consignments were sent to the Gulf by illegal channels. This shows that earlier consignments cleared by the petitioner amounted to smuggling, leading to a huge loss to the State.

Considering the nature of the business in which the petitioner is engaged and for which he was authorised under the Regulations, non-compliance with the Regulations must be dealt with strictly. If any lenient view is taken, particularly in light of the present case, it would send a wrong signal, and the High Court, under Article 226 of the Constitution of India, cannot condone such leniency. Therefore, the High Court refused to take lenient view as prayed by the petitioner.  In view of the noncompliance of Regulation 13, the High Court held that the Authorities were justified in revoking the licence and forfeiting the security deposit.