Recipient liability for misdeclaration fails where the department cannot prove knowing participation in the wrongful declaration.

Penalty under Section 112(a) of the Customs Act could not be sustained against the recipient bank for a courier consignment containing demonetised currency because the declaration on the airway bill was made by the overseas sender, and there was no evidence that the bank made, caused, or knowingly participated in any misdeclaration. Section 82 treats the accompanying declaration as the entry for post or courier imports, but liability still requires a proven nexus between the person proceeded against and the wrongful declaration or prohibited import. Since the department failed to discharge the initial burden of proving prior knowledge or wilful misconduct by the bank, the misdeclaration finding and penalty were set aside.

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Issues: Whether penalty under Section 112(a) of the Customs Act, 1962 could be sustained against the recipient bank for a courier consignment containing demonetised Indian currency, where the declaration on the airway bill was made by the sender and there was no material to show that the bank had made or knowingly caused any wrong declaration.

Analysis: Section 82 of the Customs Act, 1962 treats the label or declaration accompanying goods imported or exported by post as the entry for the purposes of the Act, but the responsibility for the declaration in such cases does not automatically shift to the importer or recipient. Liability for confiscation or penalty requires a nexus between the person proceeded against and the wrongful declaration or prohibited import. On the facts, the courier was sent by the overseas sender, the bank had only advised that the currency be deposited through proper channels, and there was no evidence that the bank had prior knowledge of the declaration or had wilfully or intentionally misdeclared the goods. The initial burden lay on the department to establish such knowledge or participation, which was not discharged. The cited precedents support the principle that mere receipt or handling of a courier consignment does not, by itself, justify penalty absent a specific finding of knowing or wilful misconduct.

Conclusion: The penalty was not sustainable against the bank, and the finding of misdeclaration against it was liable to be set aside.

Final Conclusion: The appeal succeeded because the impugned penalty could not be fastened on the recipient in the absence of proof that it made or knowingly caused the wrongful declaration.

Ratio Decidendi: In a post-parcel or courier import, penalty for misdeclaration cannot be imposed on the recipient unless the department proves that the recipient made, caused, or knowingly participated in the wrong declaration.

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