2025 (9) TMI 1285 - AT - Customs

Offence under Courier Regulations and Customs Act treated as distinct; courier cleared, consignor penalties reduced under ss.114(i) & 114AA

M/s. Total Courier & Cargo Services Pvt. Ltd. and Shri V. Vijayakumar Versus Commissioner of Customs, Chennai

CESTAT held the offence under Courier Regulations and the Customs Act were distinct, rejecting double jeopardy for the courier. The tribunal found no ... Levy of penalty u/s 114(i) and 114AA of the Customs Act, 1962 - aiding and abetting in the attempted smuggling of 7325 grams of Pseudo Ephedrine Hydrochloride - export of prohibited goods or not - applicability of principles of double jeopardy - HELD THAT:- Total Couriers have taken a plea of double jeopardy as they have already been penalised under the Courier Regulations. It is pertinent to understand the concept of double jeopardy. As per the Black’s Law Dictionary, 9th Edition, ‘double jeopardy’ is defined as “being prosecuted or sentenced twice, for substantially the same offence”. In this case the offence under the Courier Regulations and the Customs Act is not the same. Oen relates to breach of the conditions of the Regulations, the other relates to a charge of aiding and abetting in the export of prohibited goods. The facility of imports and exports through courier mode is allowed only to those courier companies which are registered with the Customs department. The same is allowed both under manual mode as well as electronic mode. It is found that there is nothing to show that Total Couriers have actively colluded with the exporter or Mr. Vijay Kumar or abetted in a blameworthy act. ‘Active collusion’ would in this case mean that there was a common intention amongst the alleged collaborators involved in the export of prohibited goods. Further abetment involves a process of instigating or aiding another person to do a particular thing. No such allegation has been made. Hence no offence has been made out against Total Couriers under the Customs Act 1962. It is found that the requirement of law is meant to be strictly construed, particularly when heinous acts affecting the public at large are facilitated. Any undue indulgence and leniency in favour of the delinquent on technical or misplaced sympathetic grounds would be harmful to society and would not serve as a deterrent dissuading others from such acts. However, considering the doctrine of proportionality the penalty imposed must be commensurate with the gravity of the misconduct. Considering that the value of the goods sought to be exported was determined to be Rs Rs.7,32,500/- (Indian Value), although there is no market price list for such goods, and that Mr. Vijay Kumar was not the exporter, it is felt that a penalty of Rs 2,00,000/- each, under both the sections i.e. section 114(i) and 114AA of the Customs Act 1962 would suffice. The penal action against the appellant Total Courier be dropped, and the penalty imposed on the appellant Mr. Vijay Kumar is reduced to Rs 2,00,000/-each, under both the sections i.e. section 114(i) and 114AA of the Customs Act 1962. The appellants are eligible for consequential relief if any as per law. Appeal disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether penal action under the Customs Act (sections 114(i) and 114AA) against a courier company is barred by the doctrine of double jeopardy where the same courier company has earlier been penalised under Courier Regulations for breach of regulatory conditions. 2. Whether mere procedural lapses (such as deficient KYC or subcontracting without prior permission) by a courier company render it liable for aiding and abetting the attempted export of prohibited goods and thus attract penalties under sections 114(i) and 114AA of the Customs Act. 3. Whether an intermediary/person who supplies his address as the exporter's address, without proof of active collusion or conscious participation in concealment, can be held liable under sections 114(i) and 114AA for facilitating attempted export of prohibited goods. 4. The scope of mens rea in the imposition of penalties under sections 114(i) and 114AA and the standard for imposition of such penalties (blameworthy remissness vs active collusion/abetment). 5. Whether the penalty quantum imposed under sections 114(i) and 114AA is excessive and requires interference in view of proportionality doctrine. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Double Jeopardy: Distinctness of regulatory breach and penal offence Legal framework: Doctrine of double jeopardy defined as being prosecuted or sentenced twice for substantially the same offence. Courier regulatory regime (Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 and earlier Clearances Regulations) provides disciplinary sanctions for breaches of regulatory conditions. Customs Act provides penal sanctions for acts rendering goods liable to confiscation and for use of false/incorrect material (secs. 113, 114, 114AA). Precedent Treatment: The Tribunal treated prior disciplinary/regulatory penalties and penal action under the Customs Act as addressing different causes of action and therefore not constitutionally or legally identical; earlier authorities on the regulatory scheme were referenced and applied to distinguish the domains of regulation and penal sanction. Interpretation and reasoning: The Tribunal held that the Regulations govern compliance and discipline of courier operators; the Customs Act penalises substantive offences such as attempted export of prohibited goods or abetment thereto. Since regulatory breaches and offences against the Customs Act are different in nature and purpose, double jeopardy does not arise and proceedings under both regimes can, if warranted, run concurrently or consecutively without operating as double punishment for the same offence. Ratio vs. Obiter: Ratio - regulatory penalty and Customs Act penalty are for distinct offences; imposing both does not amount to double jeopardy where the offences are different in substance. Obiter - reference to public policy considerations and examples of simultaneous proceedings. Conclusion: Double jeopardy defence unavailable where one sanction arises under Courier Regulations (disciplinary) and another arises under Customs Act (penal) for materially different offences. Issue 2 - Liability of courier company for aiding/abetting when only procedural lapses are shown Legal framework: Section 114 penalises acts/omissions rendering goods liable to confiscation or abets such acts; Section 114AA penalises knowingly/ intentionally making/using false or incorrect material in transactions under the Act. Courier Regulations impose independent regulatory obligations including KYC and restrictions on subcontracting. Precedent Treatment: The Tribunal applied the principle that imposition of penal liability under the Customs Act requires factual foundation of blameworthy conduct connected to the export of prohibited goods; mere procedural regulatory lapses do not automatically translate into aiding/abetting under the Customs Act. Interpretation and reasoning: The Tribunal found no evidence of active collusion or abetment by the courier company. The lapse alleged (deficient KYC, subcontracting without permission) was treated as regulatory non-compliance rather than an act establishing a common intention to export prohibited goods. The Tribunal emphasised that 'active collusion' requires common intention; 'abetment' requires instigation or aiding with culpable intent - neither was proved against the courier company. Ratio vs. Obiter: Ratio - mere procedural/regulatory lapses (KYC, subcontracting) absent proof of collusion/abetment do not attract penalty under sections 114(i) or 114AA. Obiter - commentary on the nature of active collusion and abetment elements. Conclusion: Penal action under sections 114(i) and 114AA against the courier company was not sustainable and was to be dropped; regulatory penalties remain a separate matter. Issue 3 - Liability of intermediary who provided his address as exporter's address: blameworthy remissness v. active collusion Legal framework: Sections 114 and 114AA as above; offences include acts/omissions rendering goods liable to confiscation and knowingly using false/incorrect material. The doctrine of proportionality relevant to penalty quantum. Precedent Treatment: The Tribunal reviewed prior decisions noting that imposition of penalty under these sections depends on case-specific facts and discretion of authority, and that sanctioning for facilitating serious public-harm offences may be appropriate even absent full proof of deliberate collusion. Interpretation and reasoning: The Tribunal found no proof of conscious knowledge of concealment or active collusion by the intermediary, yet held that providing his address as that of the exporter and failing to furnish correct critical particulars constituted a blameworthy omission - 'blameworthy remissness' - which facilitated attempted illegal export. The Tribunal treated such facilitation as falling within the mischief of sections 114(i) and 114AA because it materially aided the attempted export even if intent to traffic in prohibited goods was not demonstrated. Ratio vs. Obiter: Ratio - where an intermediary's omission (use of his address as exporter, failure to provide required information) materially facilitates attempted export of prohibited goods, such blameworthy remissness can attract penalties under sections 114(i) and 114AA notwithstanding absence of proven active collusion. Obiter - discussion on hurried circumstances and business pressures not excusing provision of correct critical information. Conclusion: Penalty under sections 114(i) and 114AA sustainable against the intermediary for blameworthy facilitation; culpability less than deliberate collusion but sufficient for penal consequences. Issue 4 - Mens rea and standard for imposition of penalties under sections 114(i) and 114AA Legal framework: Section 114 includes abetment and acts/omissions rendering goods liable to confiscation; Section 114AA penalises knowingly or intentionally using false/incorrect material. Statutory language contemplates both knowledge/intention (114AA) and acts/omissions/abetment (114). Precedent Treatment: The Tribunal observed that mens rea is not an absolute precondition for imposition of certain penalties under the Customs Act where statutory language imposes strict or objective liabilities; however, the factual matrix must support application of the provision invoked. Interpretation and reasoning: The Tribunal accepted that no specific allegation of instigation or deliberate collusion was proved for some appellants; nonetheless, for the intermediary the omission was blameworthy and materially facilitated the illicit act. The Tribunal also noted revenue's submission that mens rea is not required for imposition of penalty under the Customs Act in breach of statutory provisions, but applied a fact-specific standard-distinguishing between procedural lapses and culpable facilitation. Ratio vs. Obiter: Ratio - while some penalties under the Customs Act may be imposed without establishing mens rea, the facts must demonstrate an act/omission that falls within the statutory mischief; mere technical lapses do not suffice. Obiter - commentary on the interplay between strict liability and blameworthiness in customs enforcement. Conclusion: Mens rea not uniformly required; culpability may be established by blameworthy omissions that materially facilitate prohibited exports, but pure procedural lapses without facilitation do not attract penal liability under sections 114/114AA. Issue 5 - Quantum of penalty and application of proportionality Legal framework: Sections 114(i) and 114AA provide for penalties up to specified multiples of value of goods. Doctrine of proportionality requires penalty commensurate with gravity of misconduct and circumstances of the offender. Precedent Treatment: The Tribunal treated discretion of Original Authority as within bounds where not arbitrary or perverse and applied proportionality to reduce penalty in light of offender's role (not the exporter) and absence of market price list for the prohibited substance. Interpretation and reasoning: Having found that the intermediary's conduct was blameworthy but not demonstrative of active collusion or primary culpability, the Tribunal reduced the monetary penalty to Rs.2,00,000 each under sections 114(i) and 114AA, considering the declared/determined value of the goods (Rs.7,32,500) and the need for deterrence balanced by proportionality. Ratio vs. Obiter: Ratio - imposing reduced penalties where misconduct is less than deliberate collusion is appropriate and within appellate powers to ensure proportionality. Obiter - remarks on societal harm and necessity of deterrence. Conclusion: Penalty against the intermediary is confirmed but moderated to Rs.2,00,000 under each of sections 114(i) and 114AA; penalty against the courier company is dropped. Appeals disposed accordingly with entitlement to consequential relief as per law.