Delhi High Court Upholds Penalty on Courier Agency for Not Reporting Suspicious Consignments to Customs
Safiya Malik
The High Court of Delhi Division Bench of Justice Prathiba M. Singh and Justice Shail Jain upheld the Commissioner of Customs’ authority to penalise courier services that fail to report suspicious consignments moving across borders. The Court affirmed the ₹50,000 penalty imposed on M/s Dart Air Services Pvt. Ltd. under Regulation 14 of the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. It held that although the company’s registration was not revoked, it had not exercised the due diligence required under Regulation 12(1)(v) in monitoring and reporting questionable shipments. The Bench dismissed the company’s petition and directed payment of the penalty.
M/s Dart Air Services Pvt. Ltd., a registered courier service provider under the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, filed a petition challenging the orders arising out of proceedings initiated by the Commissioner of Customs (Airport & General), New Delhi. The controversy originated from an incident dated 28th December 2018 concerning courier parcels consigned to Smt. Sayra Ansari. According to the Special Intelligence & Investigation Branch (SIIB), parcels were sent by her husband, Mr. Abdul Munna Ansari, from London to India, described as “gifts,” though the consignments contained cut cloth pieces with designs. These were stitched in India and re-exported to London, forming part of a tailoring business under the name M/s Munna Fashion House.
The SIIB officers recorded that the consignor admitted to running a tailoring business in London, and thus the parcels were not bona fide gifts but commercial goods misdeclared to evade scrutiny. A letter dated 22nd February 2019 was sent by SIIB recommending suspension of the petitioner’s registration. Consequently, on 1st March 2019, a Show Cause Notice was issued, suspending the registration of the petitioner with immediate effect.
The petitioner responded on 25th March 2019, seeking revocation of the suspension, and subsequently filed an appeal along with representations. On 17th May 2019, the Chief Commissioner of Customs rejected the appeal. Meanwhile, the enquiry officer submitted a report on 24th May 2019, concluding that the petitioner had not violated Regulation 12(1)(iii), (v), or (vii).
However, on 31st May 2019, the Commissioner issued a disagreement note, observing that the courier company had failed to detect that commercial goods were being sent as gifts at repeated intervals between the same consignor and consignee, and that the goods were re-exported after stitching. The disagreement note inferred violations of Regulation 12(1)(iii), (v), and (vii).
Following further proceedings, on 26th August 2019, the Commissioner of Customs refrained from revoking the petitioner’s registration or forfeiting its security deposit but imposed a penalty of Rs. 50,000/- under Regulation 14. The penalty was imposed on grounds of failure to exercise due diligence as mandated under Regulation 12(1)(v). The petitioner, contesting that the Commissioner lacked jurisdiction to impose the penalty once exonerated by the inquiry officer, approached the High Court.
The Court recorded: “There are various obligations that are imposed on an approved Courier agency, such as filing of electronic declarations, advising consignors and consignees for compliance of the provisions of the Act, verifying the authenticity of the IEC code and identity of the client, exercising due diligence in respect of paperwork and information submitted, and maintaining proper records.”
On the issue of the Commissioner’s jurisdiction, the Court observed: “A perusal of Regulation 13A would show 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.”
It recorded: “If the Authorised courier has acted contrary to any provisions of the Regulations, 2010 or abets any contravention, or fails to comply with the provisions of the Regulations, 2010, the Commissioner of Customs is well within his rights to take action.”
Regarding the factual background, the Court stated: “In the present case, after the SIIB’s investigation, there were various facts which were revealed that commercial goods were being sent under the disguise of ‘gifts’. The Courier Agency failed to notice the same which clearly shows non-exercise of due diligence.” It further added that the Commissioner had accepted that no violation of Regulation 12(1)(iii) and 12(1)(vii) was established but concluded that Regulation 12(1)(v) concerning due diligence was breached.
The Court also recorded the broader responsibility of courier agencies: “Courier agencies, such as the Petitioner do have a responsibility to ensure that whenever there is 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.” It observed that obligations under Regulation 12 must be performed with seriousness and diligence.
The Court upheld the Commissioner’s order dated 26th August 2019. It recorded: “A perusal of the final order which has been passed on 26th August, 2019 would show that the Commissioner of Customs has refrained from revoking the courier registration of the Petitioner and has also not forfeited the security submitted by the Petitioner at the time of issuance of the courier registration.”
“However, a penalty of Rs 50,000/- has been imposed on the Petitioner in the order dated 26th August, 2019. Such an order would be well within the jurisdiction of the Commissioner in terms of Regulations 13A (7) and Regulation 14 of the Regulations, 2010.”
“In the overall fact situation, this Court is of the opinion that the order passed on 26th August, 2019 is clearly within the jurisdiction of the Commissioner of Customs and the penalty imposed of Rs 50,000/- in terms of Regulation 14 does not warrant any interference.”
“The writ petition challenging the order 26th August, 2019 is dismissed with no order as to costs. The penalty of Rs.50,000/- shall be deposited by the Petitioner in accordance with law within a period of four weeks.”
Advocates Representing the Parties
For the Petitioners: Mr. Biraja Mahapatra & Mr. Nalin Hingorani, Advocates
For the Respondents: Mr. Vijay Joshi, Senior Standing Counsel with Mr. Kuldeep Singh, Advocate
Case Title: M/s Dart Air Services Pvt. Ltd. v. Commissioner of Customs (Airport and General)
Neutral Citation: 2025: DHC:8766-DB
Case Number: W.P.(C) 7116/2019
Bench: Justice Prathiba M. Singh, Justice Shail Jain
