1997 (7) TMI 361 - AT - Customs

Summary

Issues: The issues involved in this case are the imposition of penalty on the appellant under Section 112(a) and (b) of the Customs Act based on the findings of the Commissioner regarding the appellant's alleged involvement in smuggling activities through courier services.

Summary:

1. The appellant, a courier company, was involved in delivering parcels from abroad to consignees in India through a system where onboard couriers passed on the goods to local representatives for clearance through Customs and delivery to local consignees.

2. Customs intercepted a courier packet containing computer parts valued at Rs. 14.46 lakhs, leading to investigations and notices issued to individuals suspected of being part of a smuggling arrangement. The Commissioner confiscated the goods and imposed penalties under Section 112(a) and (b) of the Customs Act, including on the appellant.

3. The penalty on the appellant was based on the Commissioner's findings that the appellant's employees had been delivering packages similar to those seized, indicating involvement in smuggling activities. However, the appellant's role was limited to collecting cleared packages and delivering them, with no involvement in importation or Customs clearance.

4. The Commissioner's decision to penalize the appellant was challenged on the grounds that the appellant had no knowledge or reason to believe the goods were liable to confiscation, as they were not involved in the import process. The lack of evidence linking the appellant or its employees to knowledge of the contents of the parcels was highlighted.

5. The imposition of penalties on the appellant as a corporate entity was deemed unsound, as there was no evidence that any employee knew or believed the parcels contained contraband. The statements of the delivery person indicated basic carelessness rather than intentional involvement in smuggling activities.

6. The Commissioner's assertion that correct deliveries would have exposed smuggling activities earlier was refuted, as the process of returning undeliverable parcels for examination by Customs was unlikely to occur in this case. The lack of material supporting the penalty on the appellant led to the appeal being allowed and the impugned order being set aside.