Due diligence by authorised courier sustains Customs penalty, while personal penalty fails absent proof of knowledge or culpable involvement.

An authorised courier is required to exercise due diligence, obtain proper authorisation, and ensure the correctness and completeness of import information. On the facts, penalty under Section 112 of the Customs Act was sustained against the courier company because the goods were liable to confiscation and the omission to cite a specific sub-clause in the notice was not fatal. Penalty on the employee was set aside because he acted on the manifest and forwarding declaration, with no proof of knowledge, personal gain, or culpable involvement. The courier company's penalty was maintained in principle but reduced as excessive.

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Issues: (i) Whether penalty under Section 112 of the Customs Act, 1962 could be sustained against the courier company despite non-mention of a specific sub-clause in the notice, in the light of the obligations of an authorised courier under Regulation 13(c) of the Courier Import-Export (Clearance) Regulations, 1998; (ii) whether penalty on the employee was sustainable; and (iii) whether the penalty on the courier company required reduction.

Issue (i): Whether penalty under Section 112 of the Customs Act, 1962 could be sustained against the courier company despite non-mention of a specific sub-clause in the notice, in the light of the obligations of an authorised courier under Regulation 13(c) of the Courier Import-Export (Clearance) Regulations, 1998.

Analysis: Section 112 applies where goods are liable to confiscation under Section 111 of the Customs Act, 1962. The consignment was found liable to confiscation, and the courier company, being an authorised courier, was bound to obtain proper authorisation, exercise due diligence, and ensure correctness and completeness of the information filed. On the facts, the consignee was untraceable, no diligence was shown, and the company filed the bill of entry without establishing the required particulars. The omission to mention a specific sub-clause was treated as not fatal in these circumstances.

Conclusion: The penalty on the courier company under Section 112 was sustainable.

Issue (ii): Whether penalty on the employee was sustainable.

Analysis: The employee acted on the basis of the manifest and the declaration furnished by the forwarding entity. There was no material to show knowledge on his part that the goods were liable to confiscation, and no personal gain was shown from the alleged misdeclaration. In these circumstances, personal penalty was held to be unwarranted.

Conclusion: The penalty on the employee was set aside.

Issue (iii): Whether the penalty on the courier company required reduction.

Analysis: Although the courier company had failed to comply fully with the governing regulations, it had itself filed a bill of entry and the circumstances indicated absence of proven awareness of the parcel contents. The penalty was therefore found to be justified but excessive.

Conclusion: The penalty on the courier company was reduced from Rs. 1,00,000 to Rs. 50,000.

Final Conclusion: The common order was sustained in principle against the courier company, but the quantum was reduced, while the penalty on the employee was annulled.

Ratio Decidendi: An authorised courier must exercise due diligence and comply with its regulatory obligations, and a penalty under Section 112 of the Customs Act, 1962 can be sustained where goods are liable to confiscation even if a specific sub-clause is not expressly invoked, but personal penalty requires proof of knowledge or culpable involvement.

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