Principal Commissioner of Customs Vs Pigeon International (Karnataka High Court)
Conclusion: Mens rea was not essential for penalty under Section 117, revocation of the courier license was unwarranted; penalties under both Section 117 of the Customs Act and Regulation 14 of the 2010 Regulations were validly imposed.
Held: Assessee was granted permission to operate as an Authorised Courier at the International Courier Terminal of the Airport and Cargo Commissionerate. Assessee was engaged in the clearance of goods imported from overseas through its courier service on behalf of Indian importers/customers. During the course of the investigation, it was found that an employee of assessee, had created a GSTIN in the name of Ms. Kajal Thakur, whose trade name was M/s. K. T. Technologies. A show-cause notice was issued to assessee for the alleged violations under the 2010 Regulations and for the imposition of a penalty under Section 117 of the Customs Act, 1962. Assessee preferred an appeal before the CESTAT. CESTAT, while modifying the penalty of Rs 50,000/- to Rs 25,000/- levied under Regulation 14 of the 2010 Regulations, set aside the penalty imposed under Section 117 and also set aside the order of revocation of the authorised courier license and enforcement of the Bond and Bank Guarantees. Revenue/appellant submitted that the CESTAT recorded the involvement of assessee in the alleged illegal imports and violations of Regulation 12 of the 2010 Regulations. CESTAT, having recorded such findings, misdirected itself in holding that there was no mens rea on the part of assessee to violate the 2010 Regulations. Assessee/respondent argued that a penalty under Section 117 of the Customs Act, 1962, could be levied only when no penalty was provided under any other Act or Regulations. Since Regulation 14 specifically provided for the levy of a penalty, the imposition of a penalty under Section 117 of the Customs Act would amount to a double levy for the same violation, which was impermissible. It was held that mens rea was not a precondition for imposing penalty under Section 117. However, once the Revenue accepted ownership of goods and released them upon duty and penalty payment, the basis for revocation ceased to exist. Revocation of the courier licence was therefore harsh and disproportionate, though the violation of Regulation 12 stood established. The penalty under Regulation 14 was restored to ₹50,000, and the penalty of ₹50,000 under Section 117 was also upheld, both operating in distinct domains.
