1964 (2) TMI 1 - SC - Customs

Mens rea Entry of vessel carrying smuggled goods Tribunal Penalty and fine - Redemption fine - Interpretation Two constructions

Issues Involved:
1. Scope and effect of Section 52A of the Sea Customs Act, 1878.
2. Whether the Customs Authorities and Central Board of Revenue are tribunals under Article 136 of the Constitution.
3. Requirement of mens rea for contravention of Section 52A.
4. Nature of the liability prescribed by Section 167(12A) of the Sea Customs Act.
5. Validity of the fine imposed in lieu of confiscation.
6. Constitutionality of Section 52A under Articles 14, 19, and 31(1) of the Constitution.

Detailed Analysis:

1. Scope and Effect of Section 52A of the Sea Customs Act, 1878:
The judgment clarifies that Section 52A prohibits vessels constructed, adapted, altered, or fitted for the purpose of concealing goods from entering or being within any port in India or Indian customs waters. The section's prohibition is absolute and does not require proof of the owner's or master's knowledge or intent. The mere presence of alterations for concealing goods constitutes a contravention.

2. Whether Customs Authorities and Central Board of Revenue are Tribunals under Article 136:
The court held that the Central Board of Revenue and the Central Government, when exercising appellate and revisional jurisdiction under Sections 190 and 191 of the Act, act as tribunals under Article 136. The adjudicatory process involves judicial or quasi-judicial proceedings, and the authorities are required to act in accordance with the principles of natural justice.

3. Requirement of Mens Rea for Contravention of Section 52A:
The court rejected the argument that mens rea is required for the contravention of Section 52A. It emphasized that the section's language and the legislative intent to combat smuggling necessitate an absolute prohibition without considering the owner's or master's knowledge or intent. The court noted that requiring proof of mens rea would render the section ineffective.

4. Nature of the Liability Prescribed by Section 167(12A):
The court held that Section 167(12A) mandates the confiscation of vessels contravening Section 52A and imposes a penalty on the master. The Customs Authority has no discretion to waive confiscation but must provide the owner an option to pay a fine in lieu of confiscation under Section 183. The fine amount is at the discretion of the adjudicating officer, considering all relevant circumstances.

5. Validity of the Fine Imposed in Lieu of Confiscation:
The court found the fine of Rs. 25 lakhs imposed on the vessel "Eastern Saga" to be reasonable, given the value of the smuggled gold and the vessel. It held that the fine was not excessive or vindictive, considering the severity of the offense and the need to deter smuggling activities. The court emphasized that the fine merely provided an option to the owner to release the vessel.

6. Constitutionality of Section 52A under Articles 14, 19, and 31(1):
The court dismissed the appellant's argument that Section 52A is unconstitutional under Articles 14, 19, and 31(1). It noted that the appellant, being a foreign company, cannot claim the benefits of Article 19. The court also rejected the plea under Articles 14 and 31(1), stating that the deprivation of property was by authority of law, and the inequality argument was not applicable since Article 19 rights are confined to Indian citizens.

Conclusion:
The appeal was dismissed, and the court upheld the confiscation order and the fine imposed on the vessel "Eastern Saga." The writ petition challenging the validity of the Central Government's order was also dismissed.

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