2007 (10) TMI 73 - AT - Customs

Goods were rendered liable to confiscation as the CIF value was les than value prescribed in the notification issued by DGFT Goods liable for confiscation attract Sec. 112(a) to impose penalty Matter remanded for quantification of penalty

Summary

Issues:
- Import of Marble slabs under EPCG license with declared CIF value less than prescribed value.
- Confiscation of goods under Section 111(d) of the Customs Act, 1962.
- Imposition of penalty under Section 112 of the Act.
- Consideration of mens rea in penalty imposition.

Analysis:

1. Import of Marble slabs under EPCG license with declared CIF value less than prescribed value:
The case involved the import of Polished Marble slabs under an EPCG license where the declared CIF value was found to be less than the minimum value required for free importation under the Foreign Trade Policy. The DGFT notification specified a minimum CIF value for import, and the declared value did not meet this requirement. The Commissioner held that the goods were liable for confiscation under Section 111(d) of the Customs Act, 1962, due to contravention of the Foreign Trade Policy provisions.

2. Confiscation of goods under Section 111(d) of the Customs Act, 1962:
The Commissioner ordered the confiscation of the imported goods but allowed redemption upon payment of a fine under Section 125 of the Act. The decision was based on the finding that the goods were liable for confiscation as per Section 111(d) due to the contravention of the Foreign Trade Policy provisions regarding the minimum CIF value for importation.

3. Imposition of penalty under Section 112 of the Act:
While the Commissioner refrained from imposing a penalty under Section 112, it was argued that penalty should have been imposed as per Section 112(a) since the actions of the importer made the goods liable for confiscation under Section 111. The failure to impose a penalty was deemed improper, and reference was made to relevant case laws emphasizing that mens rea is not a prerequisite for imposing penalties under the Customs Act.

4. Consideration of mens rea in penalty imposition:
The Tribunal, following the cited case laws, highlighted that mens rea is not a necessary element for imposing penalties under the Customs Act. Therefore, the matter was remanded back to the Commissioner to reconsider and impose a suitable penalty on the respondents under Section 112 after granting them a personal hearing. The decision to remand the case was based on the premise that the failure to impose a penalty was not legally justified.

In conclusion, the Tribunal allowed the appeal by remanding the case for the imposition of a penalty under Section 112 of the Customs Act, 1962, emphasizing the importance of considering penalties even in the absence of mens rea.