2009 (5) TMI 632 - AT - Customs

Summary

Issues:
- Confiscation of goods under Section 111(m) of the Customs Act, 1962
- Imposition of redemption fine and penalty under Sections 125 and 112(a) of the Customs Act, 1962
- Allegation of misdeclaration of quantity and value of goods
- Submission of incorrect invoice leading to discrepancy
- Waiver of show cause notice and imposition of ex parte fine and penalty
- Argument of mens rea and unintentional mistake
- Applicability of penalty on a firm under Section 112(a) of the Customs Act, 1962
- Interpretation of the term "person" in the context of penalty imposition
- Comparison with relevant legal precedents and judgments

Analysis:
The appeal involved a case where M/s. Transweigh (India) Ltd. contested the Order-in-Appeal upholding the confiscation of goods valued at Rs. 6,07,664.57 under Section 111(m) of the Customs Act, 1962. The Commissioner of Customs (Appeals) allowed redemption of goods on payment of a fine of Rs. 1,80,000/- and applicable duty, along with imposing a penalty of Rs. 1,00,000/- under Section 112(a) of the Customs Act, 1962. The discrepancy arose when the quantity of goods found during examination significantly exceeded the declared quantity in the Bill of Entry, leading to suspicions of misdeclaration to evade customs duty.

The appellants argued that the incorrect invoice submission was due to an error by the forwarding agent, requesting to pay additional duty for the excess goods without a show cause notice. However, the Tribunal rejected this argument, emphasizing that waiver of show cause notice implied acceptance of potential penal consequences for misdeclaration. The Tribunal distinguished this case from a precedent where penalty imposition was voided due to the absence of a show cause notice, as the appellants' waiver was unconditional.

Regarding mens rea and unintentional mistake, the Tribunal disagreed with the appellants, citing findings that the incorrect invoice was likely fabricated to avoid penalties, indicating a deliberate attempt to evade duty. The Tribunal clarified that mens rea is not a prerequisite for imposing penalties under Section 112(a) of the Customs Act, 1962, as established in relevant legal precedents.

The appellants also contested the applicability of penalties on a firm under Section 112(a) of the Customs Act, 1962, citing judgments from Central Excise cases. However, the Tribunal rejected this argument, relying on a Supreme Court judgment that defines a company or firm as a "person," justifying the penalty imposition on the appellants. The Tribunal deemed the cited Tribunal decisions by the appellants irrelevant in the customs context, affirming the penalty imposition.

In conclusion, the Tribunal upheld the orders of the lower authorities, rejecting the appeal and confirming the imposition of penalties on M/s. Transweigh (India) Ltd. for misdeclaration of goods, despite their arguments regarding unintentional mistakes and the applicability of penalties on a firm under the Customs Act, 1962.