2023 (11) TMI 269 - AT - Customs

Levy of penalty - Confiscation of goods - item classifiable under tariff heading 89.01 of Custom Tariff Act 1975 and where no duty is involved - other requisite permissions/approvals/intimation for post import activity were all in place - HELD THAT - For the unintended omission on the part of the Steamer Agent, the tug Century Star-1 cannot be confiscated under Section 115(2) of the Customs Act, in as much as nothing has been brought on record to implicate the appellant or his agent or the person in-charge of any prior knowledge or connivance with regard to non-filing of the requisite documents by the steamer agent. For the reason, the confiscation of tug Century Star-1, cannot be upheld and is liable to be set aside. Moreover, there is no finding in the order under appeal, that the Captain of tug Century Star-1, or the person in-charge was associated with the alleged illegal import of cruise vessel Pandaw-IV. Further, there is no finding recorded in the impugned order so as to implicate the tug Century Star-1 as well as M/s. Century Shipping Ltd. of any wrongdoing in law with regard to the lapse of non-filing of IGM for vessel Pandaw-IV. Moreover, there is nothing to even remotely connect them with any omission, aiding or abetting or to impute any previous knowledge on their part hence. Under the circumstances no case can be made out for imposition of penal liability under Section 112(a)/112(b) of the Customs Act on the appellants. Given the fact, that all approvals and permission for promoting inland river tourism with the help of cruise vessel Pandaw-IV were duly applied for and obtained from all concerned government agencies, as well the Kolkata Port Trust, and presented to the authorities, to impute the charge of smuggling for non-compliance of IGM formalities, at best can be merely theoretical. It is evident that there is no mens rea or any premediated thought in non-complying with the statutory requirements, as no duty was actually payable upon import, being exempted goods. Thus, under the circumstances, imposition of penalty on any of the appellants would be unduly harsh and not in proportion to the nature of omission/offence particularly when no mens rea can be imputed on part of any of the parties concerned. It is settled law that to subject the steamer agent to imposition of penalty, it has to be demonstrated that he was acting as the agent of the owner vehicle and unless so established no penalty can be imposed thereon. It was well-settled that in the matter of imposition of redemption fine and/or penalty, mens rea and/or conduct and/or attendent extenuating circumstances are material and relevant. Imposition of fine, in effect, amounted to awarding a punishment to the person held liable to pay the same and a person can be held liable to punishment only if he is found to be responsible for some act of omission or commission with reference to the law and the goods in question. It was emphatically held by the Hon ble High Court that to impose or inflict punishment on a person who is not guilty is against all canons of natural justice and fairplay - there are no merit in the order passed by the lower authority which is liable to be set aside. Appeal allowed.

Summary

Issues Involved:
1. Confiscation of the tug Century Star-1 and vessel Pandaw-IV.
2. Non-filing of Import General Manifest (IGM) and other customs documents.
3. Imposition of penalties under Section 112(a) and 112(b) of the Customs Act.
4. Compliance with statutory permissions and approvals.

Summary:

Confiscation of Tug Century Star-1 and Vessel Pandaw-IV:
The Customs Officers intercepted vessel Pandaw-IV and found no satisfactory shipping documents. The adjudicating authority ordered the confiscation of tug Century Star-1 under Section 115(2) of the Customs Act and vessel Pandaw-IV for violating sections 111(a), (b), (d), and (h) of the Customs Act. The Tribunal noted that the tug Century Star-1 merely towed Pandaw-IV from Myanmar to Sagar Road, and there was no evidence implicating the tug in any illegal activity. Consequently, the confiscation of tug Century Star-1 was set aside.

Non-filing of Import General Manifest (IGM) and Other Customs Documents:
The appellants argued that the vessel Pandaw-IV was imported after observing all formalities and acquiring necessary permissions. They attributed the non-filing of IGM to a bona fide mistake by the steamer agent, M/s. B. Ghose & Co. Pvt. Ltd. The Tribunal found that the responsibility for filing the IGM lay with the Master of the vessel Pandaw-IV, not the tug Century Star-1. The Tribunal also noted that all necessary approvals for the vessel's importation were in place, and the omission was not intentional.

Imposition of Penalties under Section 112(a) and 112(b) of the Customs Act:
The appellants contended that no duty was payable due to an exemption under Notification No. 21/2002-Cus and that the provisions of Section 111 of the Customs Act were not applicable. The Tribunal agreed, stating that no mens rea was involved, and the case was revenue-neutral. Therefore, the imposition of penalties under Section 112(a) and 112(b) was not justified.

Compliance with Statutory Permissions and Approvals:
The Tribunal noted that all necessary permissions and approvals from various government bodies, including the Inland Waterways Authority of India and Kolkata Port Trust, were obtained for the vessel Pandaw-IV. The vessel was brought into India for tourism development, and there was no attempt to smuggle the vessel. The Tribunal concluded that the appellants had complied with all statutory requirements, and the charge of smuggling was unsustainable.

Conclusion:
The Tribunal set aside the order passed by the lower authority, allowing the appeals filed by the appellants and providing consequential relief. The decision emphasized the absence of mens rea and the compliance with all necessary statutory permissions and approvals.