2011 (2) TMI 826 - AT - Customs

Fine imposed in lieu of confiscation - Penalty - the owner of the vessel was not aware of the non-declaration of diesel. The learned Commissioner, in his order, while discussing the issue, has noted that 128 barrels of diesel oil were loaded at Dubai by agent Shri Amad on the instructions of the owner of the vessel. This shows that when the diesel was to be filled in the bunkers of the vessel, the owner used to instruct agent for this purpose. This would mean that the owner was keeping track of the quantum of diesel in the tank from time to time - If that be so, it is difficult to believe that the owner was not aware of mis-declaration - Further, according to the Section 115 (2) of the Customs Act, 1962, any conveyance used as a means of transport in the smuggling of the any goods shall be liable to confiscation, unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner or his agent or a person in charge of the conveyance - The exception is provided in the proviso to provide that where any conveyance is used for hire, fine in lieu of confiscation cannot exceed the market price of the smuggled goods.

Summary

Issues:
1. Confiscation of undeclared diesel and vessel
2. Amendment of Import General Manifest (IGM)
3. Mens rea and fraudulent intention
4. Illiteracy of the Tindel
5. Confiscation of diesel under Section 119 of Customs Act, 1962
6. Confiscation of vessel and penalties imposed

Confiscation of Undeclared Diesel and Vessel:
The case involved the confiscation of undeclared diesel found on board a vessel and subsequent penalties imposed on the Tindel and owner. The tribunal upheld the confiscation of diesel and the vessel, along with fines imposed, based on the findings that the Tindel was aware of the excess diesel quantity and the owner was deemed to have knowledge of the misdeclaration.

Amendment of Import General Manifest (IGM):
The appellant argued that the amendment of the IGM indicated no offense was committed regarding the excess diesel quantity. However, the tribunal held that the amendment was allowed for facilitating export and did not absolve the offense of undeclared diesel. The provisions of Section 30(3) of the Customs Act, 1962 were analyzed to support this conclusion.

Mens Rea and Fraudulent Intention:
The tribunal considered the mens rea and fraudulent intention in the case, emphasizing that the Tindel's detailed statement and the significant discrepancy between declared and actual diesel quantities undermined the argument of lack of fraudulent intent. The tribunal rejected the contention that allowing IGM amendment implied no fraudulent intention.

Illiteracy of the Tindel:
The defense of the Tindel's illiteracy leading to a genuine mistake in diesel declaration was dismissed by the tribunal, highlighting the Tindel's responsibilities and the substantial discrepancy in declared quantities. The tribunal concluded that illiteracy could not excuse the misdeclaration.

Confiscation of Diesel under Section 119 of Customs Act, 1962:
The tribunal scrutinized the confiscation of 5000 liters of diesel under Section 119 of the Customs Act, 1962, noting the lack of reasoning for this action. It was concluded that the confiscation could not be sustained as the diesel was declared to the department and not used for concealing other diesel.

Confiscation of Vessel and Penalties Imposed:
The tribunal upheld the confiscation of the vessel and penalties imposed on the Tindel and owner, emphasizing the owner's involvement in diesel loading and the Tindel's awareness of excess diesel. The fines and confiscations were deemed appropriate given the circumstances, with only a minor adjustment made regarding the confiscation of 5000 liters of diesel.