2014 (12) TMI 985 - AT - Customs

Imposition of penalty u/s 112 - Intention to defraud Revenue - Held that - When the appellant had no access to know about the contents in the container, it cannot be said that he has violated the law to attract Section 112 of Customs Act, 1962. Sub-clause (a) of Rule 112 of Customs Act requires a conscious knowledge of the offender in relation to the commission or omission of an act rendering the goods liable to confiscation or if he abets the doing or omitting such an act, or acquires possession of offending goods, he cannot go out of purview of Section 112 of the Act and penalty is imposable. Similarly, sub-clause (b) of Section 112 of the Act also require conscious knowledge of an offender who is concerned in carrying or removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any offending goods which he knows or has reason to believe that the same is liable to confiscation under Section 111 to be liable to penalty. There is nothing conscious knowledge of the appellant came to record demonstrating his intention to cause fraud against Customs as apparent from para-27 of the adjudication order. Appellant had also no deliberate intention to misdeclare the content in the container. Therefore, there shall be no penalty against this appellant - Decided in favour of assessee.

Summary

Issues: Violation of Customs Act, 1962 - Conscious knowledge of offender - Penalty imposition

In the judgment by the Appellate Tribunal CESTAT NEW DELHI, the issue at hand was whether the appellant had conscious knowledge of the contents inside a container that came to India, thereby violating Section 112 of the Customs Act, 1962. The tribunal noted that there was no material to suggest that the appellant was aware of the actual content inside the container. It was emphasized that for penalty imposition under Section 112 of the Act, conscious knowledge of the offender is essential, either in relation to the act rendering the goods liable to confiscation or in dealing with offending goods. The tribunal further highlighted that the appellant had no access to know about the contents in the container, indicating a lack of deliberate intention to misdeclare the content.

The tribunal analyzed the adjudication order and found no evidence of conscious knowledge on the part of the appellant to cause fraud against Customs. It was observed that the appellant did not have any deliberate intention to misdeclare the content in the container. As a result, the tribunal concluded that since there was no conscious knowledge demonstrated by the appellant regarding the contents of the container, no penalty could be imposed under Section 112 of the Customs Act, 1962. Therefore, the appeal was allowed in favor of the appellant, absolving them from any penalty.