1969 (4) TMI 116 - HC - Customs

Summary

Issues Involved:
1. Liability of the Master of the vessel under Section 112(a) read with Section 111(f) of the Customs Act.
2. Interpretation of Sections 30, 111, and 112 of the Customs Act regarding the requirement of mens rea.
3. Validity of the penalty imposed on the Master for non-inclusion of clandestinely imported goods in the import manifest.
4. Applicability of Section 115(2) of the Customs Act in exonerating the vessel and its Master.
5. Impact of non-prescription of regulations under Clause (f) of Section 111 on the enforceability of the provision.

Detailed Analysis:

1. Liability of the Master of the Vessel under Section 112(a) read with Section 111(f) of the Customs Act:
The Master of the vessel was penalized under Section 112(a)(i) for failing to include prohibited goods in the import manifest, as required by Section 111(f). The court noted that the goods were prohibited and dutiable, and their non-inclusion in the manifest rendered them liable to confiscation. The Master argued that he had no knowledge of the goods on board and had taken all reasonable precautions to prevent smuggling. However, the court held that the absence of knowledge did not absolve the Master from liability under the strict provisions of the Customs Act.

2. Interpretation of Sections 30, 111, and 112 of the Customs Act Regarding the Requirement of Mens Rea:
The court examined whether mens rea (guilty mind) was required for imposing a penalty under Sections 30, 111, and 112. It referred to the Supreme Court's judgment in Indo China Steam Navigation Co. v. Jasjit Singh, which held that mens rea was not necessary for contraventions under the Sea Customs Act. Applying this principle, the court concluded that the Customs Act's provisions also did not require mens rea for imposing penalties for non-inclusion of goods in the import manifest. The court emphasized that the statutory duty to submit a correct manifest was a strict liability, irrespective of the Master's knowledge or intention.

3. Validity of the Penalty Imposed on the Master for Non-Inclusion of Clandestinely Imported Goods in the Import Manifest:
The court found that the Master had submitted an incomplete manifest without fraudulent intention, as the goods were clandestinely imported without his knowledge. The court held that the respondent should have allowed the Master to amend the manifest under Section 30(3) of the Customs Act instead of imposing a penalty. The court quashed the penalty of Rs. 1,00,000 imposed on the Master, stating that the respondent failed to exercise the discretionary power to permit amendment of the manifest.

4. Applicability of Section 115(2) of the Customs Act in Exonerating the Vessel and its Master:
The vessel was not confiscated under Section 115(2) as the smuggling was done without the knowledge or connivance of the Master or the vessel's owner. The court noted that the Master had taken all precautions against smuggling, and the finding that the vessel was not liable to confiscation indicated that the Master was not privy to the illicit importation. This finding supported the Master's claim of innocence regarding the clandestinely imported goods.

5. Impact of Non-Prescription of Regulations under Clause (f) of Section 111 on the Enforceability of the Provision:
The court rejected the argument that Clause (f) of Section 111 was unworkable due to non-prescription of regulations. It referred to Section 160(3) of the Customs Act, which allowed the continuation of regulations under the repealed Sea Customs Act until new regulations were prescribed. The court held that the form of the manifest under the old Act continued to be in force, making Section 111(f) enforceable.

Conclusion:
The court quashed the personal penalty of Rs. 1,00,000 imposed on the Master for non-inclusion of clandestinely imported goods in the manifest, as the respondent failed to allow amendment of the manifest despite the absence of fraudulent intention. The rest of the order was not interfered with. The court emphasized the strict liability of the Master to submit a correct manifest but acknowledged the statutory safeguard allowing amendment in cases of inadvertent errors.