Tribunal Upholds Penalty on Courier for Lack of Due Diligence in Detecting Mis-Declaration

The Tribunal upheld a penalty of Rs. 25,000 on M/s DHL Express (I) Pvt. Ltd. for lack of due diligence in detecting mis-declaration of goods valued at Rs. 8 lakhs. Despite the appellant's argument regarding their inability to ensure declaration accuracy, the Tribunal emphasized the courier company's obligation under Regulation 13 to exercise due diligence in verifying import/export information. Customs' detection of mis-declaration based on weight discrepancies highlighted the courier's failure to exercise due diligence. The penalty, reduced from Rs. 50,000, was upheld to emphasize the importance of fulfilling due diligence obligations for courier companies in handling goods.

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Issues: Mis-declaration of goods, Penalty imposition, Due diligence of courier company

Mis-declaration of goods:
The case involved M/s DHL Express (I) Pvt. Ltd. being issued a show-cause notice for mis-declaration of goods valued at Rs. 8 lakhs, resulting in a penalty of Rs. 50,000 being imposed on them. The appellants argued that as a courier company, they cannot ensure the accuracy of goods declared by the sender. They referenced a previous Tribunal decision to support their stance that the courier cannot be held accountable for incorrect declarations by the consignor or consignee. However, Customs Regulation 13 mandates courier companies to exercise due diligence to ensure the accuracy of information submitted regarding import or export goods. The lower authorities found the appellants lacking in due diligence and upheld the penalty.

Penalty imposition:
The lower authorities imposed a penalty of Rs. 50,000 on M/s DHL Express (I) Pvt. Ltd. for failing to exercise due diligence in detecting mis-declaration of goods. The appellant argued against the penalty, reiterating their position that they cannot be held responsible for inaccuracies in declarations made by others. The Tribunal acknowledged the obligation under Regulation 13 for courier companies to exercise due diligence in verifying information related to import or export goods. Despite reducing the penalty to Rs. 25,000 considering the circumstances, the Tribunal upheld the imposition of a penalty due to the lack of due diligence by the courier company.

Due diligence of courier company:
Regulation 13 of the Courier Imports and Export (Clearance) Regulations, 1998 stipulates that authorized couriers must exercise due diligence to ensure the accuracy and completeness of information submitted to Customs regarding import or export goods. The Tribunal noted that Customs detected the mis-declaration based on the abnormal weight of the consignment compared to the declared goods. It was observed that the courier agency could have detected the mis-declaration by exercising due diligence, as Customs did. Consequently, the Tribunal found that due diligence was not adequately exercised by the courier company, leading to the penalty imposition. Despite reducing the penalty amount, the Tribunal emphasized the importance of fulfilling the due diligence obligation for courier companies in handling import and export goods.

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