2008 (1) TMI 119 - AT - Customs

Impugned goods were confiscated on the ground of mis-declaration and redemption fine and penalty was imposed Tribunal proceeded on the basis that the assessee had no intention to evade duty - revenue s contention that mens rea is not required for imposition of penalty under the Customs Act 1962, is acceptable assessee s appeal is disallowed

Summary

Issues:
Mis-declaration of goods, imposition of redemption fine and penalty, mens rea for penalty under Customs Act 1962, applicability of legal precedents.

Analysis:
1. The appellant appealed against the confiscation of goods, redemption fine of Rs.50,000/-, and penalty of Rs.13,000/- imposed due to mis-declaration. The appellant declared fewer goods and lower freight than actually imported, leading to the confiscation under Customs Act 1962.

2. The appellant argued that the mistake was due to oversight from the supplier, not intentional evasion of duty, citing the absence of mens rea. They referenced legal precedents like Cromption Greaves Ltd. case to support their stance that penalty is not applicable without mens rea to evade duty.

3. The Revenue contended that mis-declaration occurred, and mens rea is not necessary for penalty under the Customs Act 1962, referencing the CC Vs. Bansal Industries case. They highlighted that the Tribunal's decision in a similar case was overturned by the Madras High Court.

4. The Tribunal's decision was based on the appellant's lack of intention to evade duty, following the principle that mens rea is not essential for contravention of civil law provisions. The High Court set aside the Tribunal's decision, emphasizing that mens rea is not a requirement for penalty under civil law.

5. The High Court's ruling emphasized that the Tribunal erred in considering the appellant's intention to evade duty, which is irrelevant in civil law contraventions. The matter was remitted back to the Tribunal for fresh disposal, highlighting that penalty is applicable regardless of intent.

6. The Vice President found the High Court's decision applicable to the present case, rejecting the appellant's appeal based on the established legal principles. The appeal was dismissed, upholding the imposition of redemption fine and penalty for mis-declaration of goods without requiring mens rea for penalty under the Customs Act 1962.