Penalty Can Be Imposed On Courier Agency For Not Reporting Suspicious Consignment To Customs: Delhi High Court

A division bench comprising Justices Prathiba M. Singh and Shail Jain observed that courier agencies have a responsibility to ensure that whenever there are any suspicious courier packets being delivered or being transacted through them, due diligence ought to be exercised and if there is any suspicion, the same ought to be reported to the concerned authority.

In the case at hand, the Petitioner-courier service failed to report commercial goods that were being sent by a woman in India to her husband abroad, under the disguise of 'gifts'.

The facts came to light only following a probe by the Special Intelligence & Investigation Branch of the Department.

An inquiry was thus conducted which, to Petitioner's relief, concluded that it had not violated Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010.

The Office of Commissioner of Customs (Airport & General) however disagreed with this inquiry report, prompting the Petitioner to approach the High Court. Meanwhile, the Commissioner of Customs imposed a penalty on the Petitioner for violation of the Regulations.

Petitioner argued that under the 2010 Regulations, once the Inquiry report had held that it was not in violation of any of the clauses under Regulation 12 (Obligations of Authorised Courier), the Commissioner of Customs does not have the jurisdiction to impose any penalty.

On the other hand, the counsel appearing for the Central Board of Direct Taxes and Customs (CBIC) relied upon Regulation 13A(vii) which stipulates that after the inquiry report is submitted, the Commissioner of Customs can pass such orders as it deems fit.

The High Court at the outset observed that Regulation 12 imposes significant obligations on the courier agencies and the same ought to be taken seriously and services have to be performed with due diligence.

In the present case, it noted that SIIB's investigation unearthed that commercial goods are being sent under the disguise of gifts but, the Courier Agency failed to notice the same, “which clearly shows non-exercise of due-diligence.”

Then turning to Regulation 13A, cited by CBIC, the Court said that the enquiry report itself is not binding and the Principal Commissioner or Commissioner of Customs can consider the enquiry report and pass such orders as may be necessary.

“The submission, therefore, that the enquiry report had completely exonerated the Petitioner and, therefore, no penalty could have been imposed, would not be tenable submission,” the Court said and upheld the penalty.

Appearance: Mr. Biraja Mahapatra & Mr. Nalin Hingorani, Advs. for Petitioner; Mr. Vijay Joshi, SSC with Mr. Kuldeep Singh, Adv. for Respondent

Case title: M/S Dart Air Services Pvt. Ltd v. Commissioner Of Customs (Airport And General)

Citation: 2025 LiveLaw (Del) 1227

Case no.: W.P.(C) 7116/2019

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