2015 (10) TMI 186 - AT - Customs

Smuggling of prohibited goods Confiscation and imposition of penalty Commissioner (Appeals) upheld order in which goods involved in smuggling were absolutely confiscated and, apart from penalties on others, penalty each of appellants was imposed Appellant challenges imposition of penalty upon appellant Held that - Attempt to smuggle Red Sandalwood was carefully planned operation involving various people but for whose acts of commission or omission, attempt to smuggle would not have taken place Role of appellant does not appear to be free from doubt at all Appellant accepted export invoice and did not verify factory stuffing permission or even care to see whether factory stuffing documents and seal on container are genuine Mere contravention of provisions of Act and Regulations justifies imposition of penalty Apex Court as observed that mens rea is not a necessary ingredient and there is no scope for any discretion in imposition of any penalty Therefore penalty is imposable Decided against Appellant.

Summary

Issues:
- Appeal against order of Commissioner (Appeals) upholding confiscation of goods and imposing penalties
- Allegations of smuggling Red Sanders Wood instead of declared goods
- Involvement of multiple individuals in the smuggling operation
- Imposition of penalties under Section 114(i) of the Customs Act, 1962
- Arguments regarding innocence, abetment, and knowledge in relation to penalties
- Violations of Customs House Agents Licensing Regulations

Analysis:
The judgment involves two appeals challenging the order of the Commissioner (Appeals) upholding the confiscation of goods and imposition of penalties on the appellants under Section 114(i) of the Customs Act, 1962. The case revolves around the smuggling of Red Sanders Wood instead of the declared coir ropes in a container intercepted at Nhava Sheva Port. The smuggling operation was orchestrated by multiple individuals, with the appellants facing penalties for their involvement. The first appellant, Shri Nandu Shinde, was found to have committed serious omissions and acts leading to the smuggling attempt. Despite arguments of innocence, the appellant failed to verify crucial details, such as the exporter and IEC holder, and did not obtain necessary authorizations, violating Customs House Agents Licensing Regulations.

The judgment also addresses the role of the second appellant, Shri Ashok Jaiswal, who illegally lent his CHA license to Shri Nandu Shinde, facilitating the smuggling attempt. The second appellant admitted to the improper use of the license and failure to ensure legal procedures were followed. Violations of CHALR and Customs Act provisions were noted, emphasizing the duty of due diligence and verification incumbent upon CHA agents. The appellants' reliance on past cases to argue against penalties under Section 114 was dismissed, clarifying that mens rea is not a necessary element for penalty imposition under the Act.

The judgment underscores the seriousness of the omissions and violations committed by the appellants, leading to the attempted smuggling of prohibited goods. The court found both appellants liable for penalties under Section 114, highlighting the importance of compliance with legal requirements and diligence in customs clearance activities. Ultimately, the appeals were dismissed, affirming the penalties imposed on the appellants for their roles in the smuggling operation.