Tribunal overturns forfeiture order and penalty, recognizing compliance with KYC norms and diligence.

The Tribunal set aside the order for forfeiture of a security deposit and annulled the penalty imposed on FedEx Express Transportation and Supply Chain Services (India) Pvt. Limited. The Tribunal found that the appellant had complied with KYC norms by collecting necessary documents in advance and maintained proper records. The allegations of contravening specific regulations were not substantiated, and the appellant's diligence was acknowledged. Consequently, the appeal was allowed, and the appellant was entitled to consequential benefits.

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Issues Involved:
1. Forfeiture of Security Deposit
2. Imposition of Penalty under Regulation 14
3. Compliance with KYC Norms and Due Diligence
4. Alleged Contravention of Regulation 12(1)(i), (iv), and (v)
5. Mis-declaration and Seizure of Goods

Issue-wise Detailed Analysis:

1. Forfeiture of Security Deposit:
The appellant, FedEx Express Transportation and Supply Chain Services (India) Pvt. Limited, faced an order for the forfeiture of their security deposit of Rs. 10 lakh by the respondent Commissioner. The forfeiture was based on the allegation that the appellant did not collect the identity proof of the consignee at the time of delivery at different locations, thereby violating the KYC norms.

2. Imposition of Penalty under Regulation 14:
The Commissioner also imposed a penalty of Rs. 50,000/- under Regulation 14, asserting that the appellant failed to comply with the requirement of collecting identity proof at all delivery locations and thus did not conduct proper due diligence.

3. Compliance with KYC Norms and Due Diligence:
The appellant contended that they had complied with the KYC norms by collecting authorization and KYC documents such as Aadhar Card and PAN Card in advance. They argued that it was unnecessary to collect the same documents repeatedly for each delivery, as they already maintained these records. The appellant relied on Circular No. 13/2016-Cus. and Circular No. 2/2018-Cus., which allowed for the delivery of parcels to addresses different from those on the KYC documents, provided the proof of identity was checked and the delivery address recorded.

4. Alleged Contravention of Regulation 12(1)(i), (iv), and (v):
The show cause notice alleged that the appellant contravened Regulation 12(1)(i), (iv), and (v) by not collecting KYC, address proof, and authorization for past shipments cleared to the consignee at different addresses. However, the Inquiry Report concluded that the appellant had obtained authorization, and the allegation of violating Regulation 12(1)(i) was not substantiated. The contravention of Regulations 12(1)(iv) and 12(1)(v) was upheld due to the failure to collect identity proof at different delivery locations.

5. Mis-declaration and Seizure of Goods:
The case involved a consignment declared as 'Electric Toys' but found to contain "Baoefeng -Transreceiver Walkies Talkie Two Way Radio set." The goods were seized, and it was alleged that the consignee attempted to import them using forged documents. The appellant's role was scrutinized for accepting shipments on a 'said to contain basis' without verifying the contents against the declaration.

Judgment Summary:
The Tribunal found that the appellant had duly obtained the proof of identity and address by collecting Aadhar and PAN cards and maintained proper records of delivery addresses. The Tribunal held that there was no violation of Regulation 12(1)(i), (iv), and (v) as the appellant had exercised due diligence and complied with the KYC norms as clarified by the relevant Circulars. Consequently, the Tribunal set aside the impugned order, revoked the forfeiture of the security deposit, and annulled the penalty imposed under Regulation 14. The appeal was allowed, and the appellant was entitled to consequential benefits.

(Order pronounced on 09.12.2022)

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