High Court Upholds Revocation of Courier License for Lapses Under 1998 Regulations

The assessee company, a registered courier agency under the Courier Imports and Exports (Clearance) Regulations, 1998, was authorised to handle express import/export cargo at Mumbai. When two shipments that were supposed to be hydraulic jacks and dies were intercepted by Customs in November 2012, it was discovered that they contained 4.87 kg of illegally obtained gold. The assessee cleared more than 250 consignments associated with another person without confirming importer’s antecedents, obtaining legitimate authorizations, or keeping accurate records, according to the investigation.

A show cause notice was issued alleging breaches of Regulations 13(a), 13(c), 13(g), 13(i), and 13(j). Following an investigation, the Commissioner issued an Order-in-Original on November 28, 2013, cancelling the assessee’s license and forfeiting its 10 lakh security deposit. This decision was later upheld in an appeal on February 20, 2014. In order to challenge these orders, the petitioner filed an Article 226 appeal with the High Court, claiming that the forfeiture and revocation were excessive and could not be upheld in the absence of mens rea.

Main Issue: Whether revocation of courier license and forfeiture of security deposit for violations under Regulations 13(a), 13(i), 13(g) of the 1998 Regulations was valid and proportionate.

HC’s Ruling: The High Court upheld the revocation of the courier license and forfeiture of the security deposit, holding that the petitioner had failed to meet its key obligations under the 1998 Regulations. It noted the absence of valid authorisation from importers under Regulation 13(a), lack of proper verification of their antecedents under Regulation 13(i), and failure to produce adequate records under Regulation 13(g). While the Court accepted that there was no sub-contracting under Regulation 13(j), the other violations were considered serious enough to justify the action taken.

Rejecting arguments of disproportionality and lack of mensrea, the Court stressed that obligations under the Regulations are strict and fiduciary in nature because of the high risk of abuse in import-export activities. Relying on K.M. Ganatra & Co. (SC) and Bombino Express, it clarified that intent is irrelevant where statutory duties are breached. Thus, the petition filed by the assessee was dismissed.

To Read Full Decision, Download PDF File Attached Below