BANSAL INDUSTRIES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) WE take up this appeal for disposal pursuant to judgment dated 13.9.2006 passed by the Hon'ble High Court of Madras in CMA No. 430/2005 filed by the Commissioner of Customs, (Exports), Chennai. In the said appeal of the department, the Hon'ble High Court answered the question "whether the element of mens rea is required for imposition of punishment under the Customs Act", in the negative and, after setting aside our earlier Final Order No. 19/2004, directed us to dispose of the appeal before us afresh on merits.

(2.) THE appeal is against the Commissioner's order (a) confiscating 198.673 MTs Tin Plate Waste of width 600mm under Section 111(m) of the Customs Act with option for redemption against payment of a fine of Rs. 25.00 lakhs (b) imposing penalty of Rs. 5.00 lakhs under Section 112 of the Act and (c) demanding differential duty of Rs. 14,12,161/ - under Section 28 of the Act. Learned Commissioner found the above quantity of goods to have been misdeclared in respect of both description and value. He held that such misdeclaration had been made with intent to evade payment of customs duty on the goods. On account of such misdeclaration, confiscation was ordered under Section 111(m) and, on account of mens rea, penalty was imposed under Section 112(a) of the Act. The appellants (importer) are not aggrieved by the demand of duty. Their grievance is against confiscation (with fine) and penalty, which grievance was accepted in our earlier final order, wherein confiscation, fine and penalty were set aside. The Hon'ble High Court has held that, for inflicting any punishment on a person under the Customs Act, it is not necessary that such person's commissions or omissions are actuated by mens rea. Insofar confiscation of any goods under Section 111 of the Customs Act is concerned, the question to be examined is whether such goods, imported into India, has offended any of the restrictions or prohibitions enumerated under the said Section. If any such breach is found, the goods become liable for confiscation, irrespective of in what manner or with what intent any person has dealt with the goods. However, as far as Section 112(a) of the Act is concerned, the question is whether the person who imported the goods has, by his commission or omission, rendered the goods liable for confiscation under Section 111 or has abetted any such offence of another person. In this view of the matter, we would proceed to deal with the appeal.

(3.) LEARNED Commissioner has imposed a penalty of Rs. 5.00 lakhs on the party under Section 112. In this connection, it is the appellant's case that they had not made any deliberate misdeclaration of the goods and that their suppliers had by mistake shipped to them goods which they had not ordered for. We find that, out of the above quantity of goods, 178.15 MTs were imported from South Africa and the remaining 20.523 MTs from USA. Learned Counsel submits that the South African supplier, in a letter, confirmed their mistake. However, no such similar letter of the American supplier is available. In the circumstances, we are not inclined to accept the appellant's claim that he had not willfully misdeclared the entire quantity of 198.673 MTs. However, we are not taking this aspect into account in view of the Hon'ble High Court's decision. Under Section 112(a)(ii), a penalty not exceeding the duty sought to be evaded on the goods or Rs. 5,000/ -, whichever is greater, can be imposed on the importer. As held by the Hon'ble High Court, this has to be done without reference to mens rea. In the facts and circumstances of this case, we are of the view that a penalty of Rs. 1,00,000/ - (Rupees one lakh only) would befit the offence found against the appellants.