Courier license revocation overturned after minor Regulation 12 violation during mobile parts import

CESTAT Bangalore partially allowed the appeal against penalty imposition and courier license revocation. The appellant violated Regulation 12 by failing to engage an authorized person for filing courier bills of entry during mobile parts importation. Considering post-COVID circumstances, the tribunal found this a minor omission insufficient to justify harsh measures including license revocation and bond enforcement. The penalty under Section 117 of Customs Act was set aside, while penalty under Regulation 14 was reduced to Rs. 25,000. The courier license revocation and bond/bank guarantee enforcement were also set aside, treating the violation as venial given prevailing circumstances.

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Issues Involved:
1. Revocation of Courier License and Enforcement of Bond and Bank Guarantee.
2. Imposition of Penalty under Regulation 14 of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010.
3. Imposition of Penalty u/s 117 of the Customs Act, 1962.
4. Alleged Violations of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010.

Summary:

1. Revocation of Courier License and Enforcement of Bond and Bank Guarantee:
The appellant, M/s. Pigeon International, faced allegations of abetting M/s. K T Technologies in importing mobile parts by mis-declaring their value. Consequently, the adjudication authority revoked the courier license and enforced the bond and bank guarantee. However, the Tribunal found that the proceedings u/s 28(6)(i) of the Customs Act, 1962 were set aside, and the penalty of Rs. 50,000/- u/s 117 of the Customs Act, 1962 was unsustainable. The Tribunal concluded that the revocation of the courier license and enforcement of the bond and bank guarantee were too harsh, considering the post-COVID situation and the appellant's venial omission.

2. Imposition of Penalty under Regulation 14 of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010:
The adjudication authority imposed a penalty of Rs. 50,000/- on the appellant under Regulation 14. The Tribunal, considering the revocation of the courier license since September 2023, took a lenient view and reduced the penalty to Rs. 25,000/-. The Tribunal emphasized that the appellant's omission to engage an authorized person for filing courier bills of entry was a venial omission, not warranting harsh proceedings.

3. Imposition of Penalty u/s 117 of the Customs Act, 1962:
The Tribunal set aside the penalty imposed u/s 117 of the Customs Act, 1962, as the proceedings against the importer were already dropped by invoking Section 28(6)(1). The Tribunal noted that the Customs Broker is only a facilitator of customs transactions and cannot be penalized for omissions or commissions of the importer/exporter in the absence of mens-rea.

4. Alleged Violations of Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010:
- Regulation 12(i): The Tribunal found that the allegation regarding the appellant not receiving authorization for filing courier bills of entry was unsustainable. The customs authority had accepted the importer's letter and released the goods after adjudication.
- Regulation 12(ii): The Tribunal upheld the violation, noting that the appellant appointed Shri M. Elias as an executive without authorization as a customs broker under section 146 of the Customs Act, 1962.
- Regulation 12(iii): The Tribunal found no admissible evidence of subletting the license and concluded that appointing Shri M. Elias during the COVID period was not subletting.
- Regulation 12(iv), (v) & (vi): The Tribunal noted that the customs authority initially alleged fraud using a dummy importer but later accepted the importer's letter and released the goods. There was no import of prohibited/restricted goods, and the appellant was unaware of any undervaluation.

Conclusion:
The Tribunal modified the impugned order, setting aside the revocation of the courier license and enforcement of the bond and bank guarantee. The penalty u/s 117 of the Customs Act, 1962 was set aside, and the penalty under Regulation 14 was reduced to Rs. 25,000/-. The appeal was partially allowed, emphasizing the absence of mens-rea and the appellant's role as a facilitator of customs transactions.

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