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Esquire Express India Pvt. Ltd. Versus Commissioner of Cus., Bengaluru

Forfeiture of the security furnished by petitioner in terms of Regulation 14(1) of Courier Imports and Exports (Clearance) Regulations, 1998 - sub-contracting - On an inspection being conducted and offence report was made by the Joint Commissioner, Air Cargo Complex, Bengaluru, which was to the effect that petitioner did not engage itself in the international transportation of goods i.e., collecting and delivering of goods as per Courier Regulations, it had outsourced its job by appointing agent .....

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Held that:- In view of the fact that Commissioner of Customs instead of revoking licence had taken a lenient view and forfeited the bond amount, cannot be held either as being without authority or being disproportionate to prove infraction or not being in consonance with the Courier Regulations.

Writ petition is hereby dismissed with costs. - Petitioner shall pay costs of ₹ 10,000/- to respondent - Decided against the petitioner. - Writ Petition No. 17539 of 2015 (T-RE .....

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of Regulation 14(1) of Courier Imports and Exports (Clearance) Regulations, 1998 (for short Courier Regulations ) by rejecting the representation of petitioner. 2. Petitioner herein is a holder of Authorized Courier Registration issued under Courier Regulations by respondent valid upto 11-6-2021. An offence report was made out by Joint Commissioner of Customs, Air Cargo Complex, Bengaluru to the effect that respondent did not engage in international transportation of goods i.e., collecting .....

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not be revoked and security furnished by petitioner should not be forfeited in terms of provisions of Regulation 14(1) of Courier Regulations. 3. On reply being submitted twice and adverting the contentions raised by authorized representative of petitioner, Commissioner of Customs has dealt with ail the three contentions raised by authorized represenrntive of petitioner and a finding came to be recorded by order dated 31-7-2014, Anncxure - B, which reads as under : 12.2 Adverting to th .....

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to take on record certain facts (7 of them) for consideration of their request for registration as Autliorized Courier. None of these, as already mentioned, indicate outsourcing of any of the activities. In fact, the agreement with Universal Express is dated 5-3-2007 and was already in operation as on 15-6-2011. Therefore, nothing prevented Esquire Express from expressly bringing this agreement on record, on 15-6-2011, and in obtaining the permission in this respect. There is also nothing on rec .....

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t approval of the department. 12.3 Coming to the second set of submissions made on 27-6-2014, it is admitted by Esquire Express that the activity of door to door delivery had been outsourced in two of the three cases. They have, accordingly, sought ex-post facto approval in these cases. In the third case, as per the Flow Chart-Ill, it is the Universal who have outsourced the activity relating to filing of CBE-I at Bangalore to Esquire and, as such Esquire need not obtain any permission. 1 f .....

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ly indicates that the procedure so specified relates to filing of documents with Customs and handling of goods while in customs control. Obviously, these Regulations do not specify all the functions which an Authorized Courier is required to carry out. On the other hand, the definition of Authorized Courier as contained in Regulation 3(a) and which has been relied upon in the show cause notice, clearly indicates that the Authorized Courier has to, inter alia, carry out the door to door delivery .....

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Courier, an eventuality which they are so stridently attempting to avoid. Suffice it to say, it is a self defeating argument. 13. As brought out herein above, an Authorized Courier is required to undertake international transportation of goods on a door to door delivery basis. Esquire Express, by way of aforesaid agreements, have outsourced the activities related to door to door delivery and some other activities to other companies. These activities are germane to the Courier basiness. How .....

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vity namely which related to door to door delivery to said entities. Undisputedly, petitioner did not obtain prior permission from the Commissioner of Customs which is mandatory under Courier Regulation 13(j) and thereby petitioner had violated the terms agreed to be adhered to as prescribed in the conditions of bond executed by it. As noticed by the Commissioner of Customs this default of petitioner had continued for a period of three (3) years. However, instead of revoking the Courier Registra .....

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sonance with the Courier Regulations and act of petitioner being in contravention of Regulation 13(j), it was held by respondent that order passed by Commissioner of Customs forfeiting the security is proper and there being no infirmity in the said order, representation of petitioner came to be rejected. 6. Assailing said order petitioner is before this Court contending inter alia that Regulation 14(1) of Courier Regulations stipulates that registration of authorized courier may be revoked .....

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urier Regulations. It is also contended for such procedural infraction Commissioner of Customs was not justified in forfeiting the amount and such forfeiture does not appeal to the doctrine of proportionality of punishment. It is also contended that forfeiture of security is an act of deterrent and has curtailed the expansion plans of petitioner s business in other areas. By way of alternate submission he also contends that on account of said forfeiture order passed by the Commissioner of Custom .....

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tition. 7. At this juncture, Sri Shivadass. G, learned counsel appearing for petitioner would submit that contentions raised in the writ petition with regard to interpretation of language employed in Courier Regulation 14 is not pressed. Memo is filed to the said effect and same is placed on record and said issue is not delved upon in this writ petition in view of memo filed. 8. Per contra, Sri Jeevan J. Neeralgi, learned counsel appearing for respondent would support the order passed .....

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s no infirmity in the order passed by Commissioner and as such, he prays for dismissal of the writ petition. 9. Having heard the learned Advocates appearing for parties and on perusal of case records and also bestowing my careful attention to the contentions raised at the bar it requires to be noticed that petitioner has obtained Courier Registration as per Courier Regulations on 26-7-2011 and has been carrying on its operations across the globe. Petitioner has been in the business of priva .....

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ough courier mode. On an inspection being conducted and offence report was made by the Joint Commissioner, Air Cargo Complex, Bengaluru, which was to the effect that petitioner did not engage itself in the international transportation of goods i.e., collecting and delivering of goods as per Courier Regulations, it had outsourced its job by appointing agents namely M/s.ADP Express Private Ltd. to act as an agent to their Hong Kong shipments and M/s. Universal Courier Pvt. Ltd. for Singapore shipm .....

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red to supra. Accordingly, a show cause notice came to be issued on 8-5-2014 as to why Courier Registration issued to petitioner should not be cancelled and the amount furnished by petitioner way of security by executing a bond should not be forfeited. 10. Reply submitted to show cause notice on 28-5-2014 by petitioner indicated that non obtaining of such permission is only procedural infraction and as such, it was contended by petitioner that it does not warrant revocation of registration .....

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arned Advocate appearing for petitfoner as well as Official of petitioner - company. Respondent after considering all the contentions raised in the reply dated 28-5-2014 and 27-6-2014 noted that alleged agreements entered into between tlie petitioner and M/s. ADP Express Pvt. Ltd., was on 3-1-2012 and as on the date of submission of communication dated 15-6-2011, Annexure-D, there was no contract for outsourcing at all and as such, it has been rightly held that contention of petitioner that they .....

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Universal Courier Pvt. Ltd., who have outsourced the activity relating to filing of CBE-1 at Bengaluru through petitioner and as such, petitioner was not under obligation to obtain permission, came to be accepted. On this amongst other grounds as indicated in the order dated 31-7-2014, Annexure - B, the registration granted to petitioner was not revoked but the security furnished by petitioner was forfeited in terms of Regulation 14(1) of the Courier Regulations. Regulation 14(1) of Courier Regu .....

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ourier : Provided that no such revocation shall be made unless a notice has been issued to the Authorised Courier informing him the grounds on which it is proposed to revoke the registration and he is given an opportunity of making a representation in writing and a further opportunity of being heard in the matter, if so desired : Provided further that, in case the Commissioner of Customs considers that any of such grounds against an Authorised Courier shall not be established prima facie without .....

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, as the case may be, may revoke the registration of an authorized courier and also order forfeiture of security on any of the ground specified to in (a) to (c) thereunder. Clause (a) would indicate that in the event of Authorized Courier failing to comply with the conditions of bond executed under Regulation 11, it would entail in revocation and forfeiture. Likewise, failure of Authorized Courier to comply with any of the provisions of regulations would also result in revocation and forfeiture. .....

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made an attempt to take umbrage under it to buttress its argument that Department had already been intimated of petitioner s intention to expand its business at Hong Kong and Singapore and as such, it was awaiting further instructions from the Department, to stave off its obligation of obtaining written permission as contemplated under Regulation 13(j). At the cost of repetition, it requires to be noticed that as on the date of submitting communication dated 15-6-2011 to petitioner it had not e .....

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or not being in consonance with the Courier Regulations for reasons more than one: Firstly, Regulation 14(1)(b) would clearly indicate that when there is infraction or violation of Courier Regulation, authority would be entitled to forfeit the bond amount. Secondly, when there is violation of any of the conditions of bond executed by the Authorized Courier under Regulation 11 it would result in authority invoking forfeiture clause and the amount to Department. Hence, this Court is of the conside .....

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