2006 (9) TMI 58 - HC - Customs

Confiscation and penalty Alleged that appellant was used to mis-declaration and under- valuation of goods As per appellant contended that that there was mistake in the dispatch of goods at the port of loading Authority allow the appeal

Summary

Issues:
1. Mis-declaration and under-valuation of imported goods leading to confiscation and penalty.
2. Burden of proof on importer for penalty under Customs Act 1962.
3. Tribunal's authority to set aside original authority's order without finding of perversity.

Analysis:

Issue 1: Mis-declaration and under-valuation of imported goods leading to confiscation and penalty:
The case involved an appeal against the order of the Customs Excise and Service Tax Appellate Tribunal regarding the mis-declaration and under-valuation of imported goods. The assessee had imported Tin Free sheets Waste/Waste Defective sheets but upon re-examination, it was found that they were Prime sheets, leading to a deliberate mis-declaration. The original authority ordered confiscation of the goods and imposed a redemption fine and penalty. The Tribunal set aside this order, stating the assessee did not willfully suppress facts and misdeclare goods with the intent to evade duty. The High Court disagreed, emphasizing that mens rea is not necessary for contravention of civil law provisions, and upheld the imposition of penalty, setting aside the Tribunal's order.

Issue 2: Burden of proof on importer for penalty under Customs Act 1962:
The High Court addressed the question of whether the burden of proof for penalty under the Customs Act 1962 lies with the importer. It discussed the Tribunal's reliance on the assessee's claim that the mis-declaration was due to the supplier's mistake and the absence of evidence showing the assessee's intention to evade duty. The Court highlighted that mens rea is not a crucial element for contravention of civil law provisions, and upheld the penalty imposed by the original authority, emphasizing that the Tribunal erred in its decision.

Issue 3: Tribunal's authority to set aside original authority's order without finding of perversity:
The High Court re-framed the question to focus on whether mens rea is required for punishment under the Customs Act. It criticized the Tribunal for not considering the original authority's reasoning based on evidence and for relying solely on the assessee's claims. The Court emphasized that the Tribunal's decision was based on the assessee's lack of intent to evade duty, which was not relevant for imposing penalties under civil law provisions. Consequently, the Court set aside the Tribunal's order and remitted the matter back to the Tribunal for fresh disposal in accordance with the law.

In conclusion, the High Court's judgment upheld the imposition of penalty on the assessee for mis-declaration and under-valuation of imported goods, emphasizing that mens rea is not necessary for contravention of civil law provisions. The Court highlighted the importance of evidence and proper legal reasoning in such cases, setting aside the Tribunal's decision and remitting the matter for fresh consideration.