2007 (9) TMI 145 - AT - Customs

Barge entered in to the Indian Customs Waters Penalty on Captain of vessel cannot be imposed as it was a bona fide mistake Moreover Barge was brought into Indian Custom Water at the instructions of Controller of Cochin Port Penalty on master of vessel is set aside

Summary

Issues: Penalty for bringing a barge into Indian Customs waters without declaration in the Import Manifest.

Analysis:
1. The appeal stemmed from an order imposing a penalty of Rs. 1,00,000 for bringing a barge into Indian Customs waters without declaring it in the Import Manifest. The Master of the vessel admitted the mistake, citing lack of awareness of Indian rules due to being a first-time visitor. The appellants contended that it was a bona fide mistake with no intention to evade the law.

2. Initially adjudicated, the matter was remanded for further consideration, allowing the appellants to cross-examine witnesses. The Commissioner noted the Master's admissions regarding the barge's entry into Indian waters. The appellants claimed the entry was a bona fide mistake and done on Port Control Officials' instructions, a defense not accepted by the adjudicating authority, resulting in the penalty on the Master of the vessel.

3. The Counsel argued against the penalty, citing precedents where penalties were not imposed for venial breaches. Referring to relevant cases, including one where a penalty was set aside due to lack of intent to sell goods in the local market, the Counsel contended that penalties were not applicable for technical or venial breaches of the law.

4. The Department defended the penalty, emphasizing the obligation to declare the barge in the vessel's Manifest. The defense of not understanding English and following Port Control Officials' instructions was rejected, asserting that violating Customs law by not declaring the barge warranted the penalty.

5. The Commissioner rejected the appellants' claim of a bona fide mistake but acknowledged their lack of understanding of regulations, leading to no confiscation of the vessel or redemption fine. Despite accepting the mistake for not imposing further penalties, the Commissioner upheld the penalty for violating Section 112 of the Customs Act, 1962. However, considering the precedents and the appellants' bona fide grounds, the penalty on the Master of the vessel was set aside, and the appeal was allowed with consequential relief.