Legal principle

A courier licence cannot be revoked for the fraudulent acts of employees committed on their own for personal gain outside the scope of employment where the company itself was not complicit, as revocation in such circumstances is disproportionate when a penalty has already been imposed.

Court decision

The Tribunal held the appeal maintainable under Section 129A per the Bombino ratio, allowed the appeal in part, set aside the revocation of the Courier Registration and the forfeiture of the security deposit, and restored the registration with security deposit forthwith, holding that the penalty of Rs. 50,000 already imposed under Section 158(2)(ii) should suffice.

Facts

Aramex India Pvt. Ltd., a courier licence holder since 2005, was proceeded against after two of its employees, in connivance with outsiders, clandestinely cleared silver jewellery into India in the guise of courier packages. The department issued a show-cause notice under Sections 28 and 124 of the Customs Act, 1962 (following a Bombay High Court direction in a writ), proposing penalty under Sections 114AA and 117 and revocation of courier registration under Regulations 10 and 14 of the Courier Imports and Exports (Clearance) Regulations, 1998. The Commissioner of Customs, Airport Special Cargo, Mumbai, by Order-in-Original dated 26.04.2016, revoked the courier registration, forfeited the security deposit, and imposed a penalty of Rs. 50,000 under Section 158(2)(ii) of the Customs Act. Aramex appealed to the Tribunal, and the Revenue sought reference to a larger bench on maintainability.

Key provisions

• Section 157, Customs Act, 1962 — General power to make regulations
• Section 146, Customs Act, 1962 — Licence for Customs Brokers
• Section 158(2)(ii), Customs Act, 1962 — Provisions with respect to rules and regulations
• Section 129A, Customs Act, 1962 — Appeals to the Appellate Tribunal
• Section 2(1), Customs Act, 1962 — Definitions
• Section 124, Customs Act, 1962 — Issue of show cause notice before confiscation of goods etc
• Section 114AA, Customs Act, 1962 — Penalty for use of false and incorrect material
• Section 117, Customs Act, 1962 — Penalties for contravention etc not expressly mentioned
• Regulation 14, Courier Imports and Exports (Clearance) Regulations, 1998 — Deregistration
• Regulation 10, Courier Imports and Exports (Clearance) Regulations, 1998 — Registration