2011 (8) TMI 117 - AT - Customs

Demand - this is a fact that the consignment belonging to M/s. Balu India covered under shipping bill 6884292 dated 3, 12, 08 which was destined to Port Aqaba was stuffed in the container without examination done by the customs authorities and without Let Export Order - Since the goods were loaded and taken out of India without permission of the proper officer the goods are liable for confiscation under Sec.113(g) of the Customs Act - Decided against the assessee Regarding penalty - there was no mala fide on the part of the appellants no penalty is imposable on them for technical breach of the provisions of the Customs Act - Decided against the assessee

Summary

Issues:
1. Error in stuffing cargo leading to penalty under Customs Act.
2. Appeal against penalty reduction based on lack of mala fide intention.
3. Legal arguments citing case laws on penalties for technical breaches.
4. Defense of penalty imposition by Revenue based on violation of Customs Act provisions.

Issue 1: Error in stuffing cargo leading to penalty under Customs Act
The appellants, engaged in consolidation business, mistakenly stuffed cargo destined for Port Aqaba into a container without proper customs examination and Let Export Order. This error led to the cargo being exported without authorization, violating Sec.113(g) of the Customs Act, making the goods liable for confiscation under Sec.114 of the Act.

Issue 2: Appeal against penalty reduction based on lack of mala fide intention
The appellants appealed the penalty imposed for the error, arguing that as there was no deliberate action in the erroneous stuffing, the penalty was unjustified. Despite the absence of mala fide intentions, the penalty was reduced to Rs. 1,00,000 based on legal precedents emphasizing penalty imposition irrespective of intent, as per the Madras High Court ruling.

Issue 3: Legal arguments citing case laws on penalties for technical breaches
The appellants cited case laws such as Hindustan Steel Ltd. vs State of Orissa and Technospin Pvt. Ltd. vs. Commissioner of Customs to argue against the penalty for technical breaches without mala fide intentions. These cases highlighted the need for judicious imposition of penalties considering all relevant factors beyond mere technical violations.

Issue 4: Defense of penalty imposition by Revenue based on violation of Customs Act provisions
The Revenue defended the penalty imposition by citing case laws like CC(Export), Chennai-I vs Bansal Industries, emphasizing that mens rea is not essential for penalty imposition under the Customs Act. The Revenue argued that the violation of Customs Act provisions, such as loading goods without Let Export Order, warrants penalties, as seen in cases like LMJ International Ltd. vs. CC(Export) and Nichrome India Ltd. vs. CC(Export).

In conclusion, the Tribunal upheld the penalty of Rs. 1,00,000 due to the violation of Customs Act provisions, despite the absence of mala fide intentions, based on legal precedents emphasizing penalty imposition for contraventions, even without deliberate wrongdoing.