2007 (3) TMI 150 - AT - Customs

Confiscation and penalty Alleged that appellant made mis-declaration of goods liable to confiscation u/s 111(m) of the CA,1962 and accordingly demand were made along with penalty Held that the allegation was correct and demand and penalty sustained

Summary

Issues:
1. Requirement of mens rea for punishment under the Customs Act.
2. Confiscation, penalty, and demand of duty under Sections 111, 112, and 28 of the Act.
3. Misdeclaration of goods and liability for confiscation.
4. Imposition of redemption fine under Section 125.
5. Penalty imposition under Section 112 without reference to mens rea.

Analysis:
1. The judgment was delivered following a High Court directive to re-examine an appeal involving the requirement of mens rea for punishment under the Customs Act. The High Court had set aside an earlier Final Order and directed the Tribunal to dispose of the appeal afresh on merits, emphasizing that mens rea is not necessary for imposing punishment under the Act.

2. The appeal challenged the Commissioner's order confiscating misdeclared goods under Section 111(m), imposing penalties under Section 112, and demanding differential duty under Section 28 of the Customs Act. The misdeclaration of goods was found to be intentional, leading to confiscation and penalty imposition based on the established liability under the relevant sections.

3. The Tribunal confirmed the misdeclaration of goods by the importer, establishing the liability for confiscation under Section 111(m). The High Court's decision implied the goods' liability for confiscation, forming the basis for penalty imposition under Section 112(a) without requiring mens rea.

4. Regarding the imposition of a redemption fine under Section 125, the Tribunal considered the appellant's claim of incurring a loss in connection with the import. The Tribunal analyzed the relevant data and concluded that no redemption fine could be imposed based on the present market value of the goods, setting aside the redemption fine while upholding the confiscation.

5. The penalty imposition under Section 112 was deliberated, considering the appellant's claim of unintentional misdeclaration by their suppliers. Despite the claim, the Tribunal found the appellant liable for intentional misdeclaration but imposed a reduced penalty of Rs. 1,00,000 without reference to mens rea, aligning with the High Court's directive and the provisions of the Act.

In conclusion, the Tribunal modified the impugned order to reflect the decisions on confiscation, redemption fine, and penalty imposition, disposing of the appeal in accordance with the legal provisions and the High Court's ruling.