2021 (6) TMI 861 - AT - Customs

Levy of penalty u/s 112 (b) of the Customs Act - appellant did not file the IGMs in question - fake items of leading brands were being imported into India - HELD THAT - It is not the case of the Revenue that it was the appellant who filed the Bill-of-Lading. From the documents placed on record, this aspect also becomes clear since the appellant has maintained all along that it did not file the IGMs in question which fact not denied by the Revenue. Section 112 of Customs Act has wide amplitude to cover any person dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111 ibid. This implies that the requirement of mens rea is sine qua non to fasten the impugned penalty. Admittedly, the appellant is only a shipping liner who not only did not file the IGMs in question, but also did not file even the Bill-of-Lading. Facts borne on record reveal that the appellant has maintained all along that it never had the possession of the impugned goods nor was in any way concerned with the carrying, removing, etc., of the consignments in question and hence, it was beyond their comprehension that the goods in question were per se liable for confiscation under Section 111 (d) ibid. Undisputed peculiar facts of the case are that the appellant is neither the importer nor the owner who had acquired possession nor in any way concerned with the carrying, removing, etc., of the goods in question, and Revenue has nowhere ascribed knowledge of the appellant as to the confiscation - the Revenue has also nowhere offered redemption in lieu of the confiscation in so far as the appellant is concerned, which establishes that the appellant is in no way concerned nor was it responsible in any way for carrying, removing, etc., of the goods in question. The penalties, as levied under Section 112 (b) of the Customs Act, 1962, are not justified - Appeal allowed - decided in favor of appellant.

Summary

Issues: Seeking deletion of penalty under Section 112 (b) of the Customs Act.

Analysis:
1. Allegations and Proceedings: The appellant, a shipping liner, faced three Show Cause Notices for the alleged importation of fake items. The Directorate of Revenue Intelligence detained containers containing mobile accessories, branded cosmetic items, and shoes of leading brands. The Adjudicating Authority confirmed the penalty under Section 112 (b) of the Customs Act, 1962, based on contraventions of Intellectual Property Rights rules and Legal Metrology Act provisions.

2. Legal Arguments: During the hearing, the appellant cited a High Court order directing the Revenue to provide the Import General Manifest (IGM) and pass final adjudication orders. The appellant denied filing the IGMs or Bill-of-Lading, which was not contested by the Revenue. The appellant's lack of involvement in filing documents was crucial in determining liability.

3. Penalty Provision: Section 112 (b) of the Customs Act imposes penalties for dealing with goods known or believed to be liable for confiscation under Section 111. Mens rea, or guilty mind, is essential for imposing penalties. The appellant, as a shipping liner, did not possess or handle the impugned goods, raising doubts about its knowledge or belief in the goods' confiscation liability.

4. Decision: The Tribunal found that the appellant, not being the importer or owner, had no possession or involvement with the goods in question. The absence of evidence regarding the appellant's knowledge or belief in the goods' confiscation, along with the lack of redemption offers by the Revenue, led to the conclusion that the penalties under Section 112 (b) were unjustified. Consequently, the Tribunal set aside the impugned penalty orders, allowing the appeals.

This detailed analysis of the judgment highlights the key legal aspects, arguments presented, and the ultimate decision reached by the Appellate Tribunal CESTAT CHENNAI regarding the penalty under Section 112 (b) of the Customs Act.