Case law

Custom, Excise & Service Tax Tribunal · 9 Sep 2026

Fedex Express Transportation And Supply Chain Services vs -Commissioner Of Customs (Iv), Chennai

Legal principle

An authorised courier cannot be penalised under Sections 114(i)/114AA for concealed contraband absent evidence of knowledge, connivance or collusion, and neither non-collection of a second identity document (a mere procedural lapse) nor outsourcing of physical pick-up (not a regulatory function) constitutes breach of Regulations 13(i) and 13(j).

Court decision

The Tribunal found merit in the appeal and set aside the impugned order insofar as it related to the appellant: no breach of Regulations 13(i) or 13(j) was established, and the penalties under Sections 114(i) and 114AA were unsustainable, with the appellant entitled to consequential relief; the appeal was disposed of accordingly.

Facts

TNT India Pvt. Ltd., an authorised courier, filed Courier Shipping Bill No. 21109 dated 22.12.2012 for export of three packages of 106 Churidhar Tops, in which examination revealed white crystalline powder, later identified as 16,500 grams of pseudoephedrine hydrochloride, concealed in the embroidered portions of the garments. The consignment was booked through intermediaries (M/s. Universal Worldwide Express and M/s. Worldwide Express) without the Commissioner's permission for sub-contracting, only one identity document was collected from the consignor whose address was found false, and no NOC from the Central Bureau of Narcotics accompanied the export. The Adjudicating Authority imposed penalties of Rs 40 lakhs under Section 114(i) and Rs 60 lakhs under Section 114AA of the Customs Act, 1962 for alleged breach of Regulations 13(i) and 13(j) and KYC norms, which the Commissioner (Appeals) upheld. Following a Business Transfer Agreement dated 02.02.2022, FedEx Express pursued the appeal before the Tribunal.

Key provisions