Courier company license revoked for identity fraud and bogus imports under Regulation 11 CIER 2010

CESTAT New Delhi allowed the department's appeal and revoked the courier company's license for intentional misconduct. The courier failed to verify client identities and IEC codes, used the same Aadhaar number across multiple Bills of Entry, and delivered goods to bogus addresses. Investigation revealed consignments were imported under names of persons unaware their identities were misused. The courier's software was deliberately designed to maintain constant GSTIN fields showing Aadhaar numbers. CESTAT held this constituted intentional fraud rather than negligence, warranting license revocation under Regulation 11 of CIER 2010, setting aside the original authority's mere penalty imposition.

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Issues Involved:
1. Misuse of Aadhaar number and KYC details.
2. Verification of Proof of Delivery (POD) and addresses.
3. Violations of CIER Regulations, 2010.
4. Proportionality of penalty imposed.

Summary:

1. Misuse of Aadhaar number and KYC details:
The respondent, M/s. Air Logix Solutions, used the same Aadhaar number (233962343459) 22,433 times for different Bills of Entry (BOEs) from November 2017 to March 2018. The KYC details filed in the BOEs were found to be fake. The respondent claimed it was a software mistake, but evidence showed that the same Aadhaar number was intentionally used, and the KYC details were not properly maintained. The Tribunal held that the respondent contravened Regulation 12(1)(v) of CIER, 2010.

2. Verification of Proof of Delivery (POD) and addresses:
Verification of the PODs by the jurisdictional Commissionerate revealed that most addresses were fictitious, and the consignments were bogus. The Tribunal found that the respondent failed to verify the correctness of the IEC code and the identity of its clients, intentionally misusing the IDs of consignees. The Tribunal held that the respondent violated Regulation 12(1)(iv) of CIER, 2010.

3. Violations of CIER Regulations, 2010:
The Tribunal observed that the respondent facilitated imports by mis-declaring the names of consignees and consignors and using the same GSTIN for all BOEs. The respondent knowingly violated Regulations 12(1)(iv), 12(1)(v), and 12(1)(x) of CIER, 2010, by failing to verify the antecedents and correctness of the information submitted to the customs authorities.

4. Proportionality of penalty imposed:
The original adjudicating authority imposed a penalty of Rs. 50,000 on the respondent but did not revoke the courier's registration. The Tribunal found this penalty to be highly disproportionate given the intentional misconduct. The Tribunal accepted the department's appeal, set aside the original order, and revoked the respondent's courier registration for committing intentional fraud.

Conclusion:
The Tribunal allowed the department's appeal, set aside the original adjudicating authority's findings, and revoked the respondent's courier registration for intentional fraud and violations of CIER Regulations, 2010. The penalty of Rs. 50,000 was deemed insufficient, and the respondent's actions were found to be intentional misconduct rather than mere negligence.

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