2001 (12) TMI 744 - AT - Customs

Summary

Issues:
- Liability for confiscation of unmanifested gold bars
- Penalty under Sec. 112 of the Customs Act, 1962
- Imposition of penalty

Analysis:

1. Liability for confiscation of unmanifested gold bars:
The case involved an international airline operating in India where unmanifested gold bars were found in cargo. The Customs Department issued a show-cause notice to the airline, alleging involvement in smuggling. The tribunal found that the unmanifested gold bars were loaded by someone from the airline, rendering them liable for penal action under the Customs Act. The gold was found to be liable for confiscation under various sections of the Customs Act.

2. Penalty under Sec. 112 of the Customs Act, 1962:
After considering the replies from the airline, the Collector concluded that the airline was liable for a penalty under Sec. 112 of the Customs Act. The tribunal upheld the liability for penalty, emphasizing that the carrier had a responsibility to declare all goods brought into India. The tribunal rejected arguments of absence of mens rea and upheld the penalty based on the carrier's failure to declare the unmanifested goods.

3. Imposition of penalty:
The tribunal noted that this was the first instance of such involvement by the airline and considered taking a lenient view. However, it found the penalty of Rs. 2 lakhs imposed by the Commissioner to be considerably high for a first offense. The tribunal ordered setting aside the penalty of Rs. 2 lakhs and imposed a reduced penalty of Rs. 1,000, considering the airline's assurance to prevent such incidents in the future and the lack of evidence implicating the airline in other sections of the Customs Act.

4. Conclusion:
The tribunal partially allowed the appeal, setting aside the high penalty and imposing a reduced penalty of Rs. 1,000 due to the airline's first-time involvement and steps taken to prevent future occurrences. The decision highlighted the importance of strict vigilance by carriers in declaring all goods brought into India and considered mercy in imposing penalties for customs violations.