Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Customs Customs + AT Customs - 1988 (4) TMI AT This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

1988 (4) TMI 223 - AT - Customs

Issues Involved:
1. Validity of the import license.
2. Bona fide mistake vs. deliberate violation.
3. Justification for invoking Section 112 of the Customs Act.
4. Requirement of mens rea for imposing a penalty.
5. Appropriateness of the penalty imposed by the Collector.

Issue-wise Detailed Analysis:

1. Validity of the import license:
The license in question was valid for importation of goods from Czechoslovakia, whereas the goods were of Russian origin. The importers, Calcutta Motor Dealers Association, were letter of authority holders from M/s. Projects and Equipment's Corporation of India Ltd. They had approached the licensing authority to amend the license to cover imports from any country in the Rupee-payment-area (R.P.A.). However, due to a clerical mistake, this particular license was not amended, leading to the importation against an unamended license.

2. Bona fide mistake vs. deliberate violation:
The importers argued that the violation was a bona fide mistake, not a deliberate act. They had intended to amend the license, and the licensing authority had agreed to the amendment. The Collector acknowledged that had the importers approached the licensing authority before importation, the amendment would have been granted. Despite this, a penalty of Rs. 19,922/- was imposed for not producing a valid license.

3. Justification for invoking Section 112 of the Customs Act:
The department imposed a penalty under Section 112, arguing that the goods were imported without a valid license, making them liable for confiscation under Section 111(d) of the Customs Act. The learned counsel for the appellants contested this, stating that Section 112 could not be invoked as there was no mens rea. The Collector had taken a lenient view by imposing a penalty without confiscating the goods, which were released on a license bond.

4. Requirement of mens rea for imposing a penalty:
The appellants cited several cases, including Messrs. Janata Traders and Lemuir Air Express, arguing that mens rea is an essential ingredient for imposing a penalty under Section 112. They contended that penalty proceedings are quasi-criminal, and without establishing mens rea, a penalty cannot be imposed. The learned SDR countered this by citing Supreme Court judgments, including Ajit Mills and James David Crighton, which held that mens rea may not be necessary for economic crimes and that penalties can be imposed for violations of law that are self-evident.

5. Appropriateness of the penalty imposed by the Collector:
The Collector's order was criticized for not specifying whether Section 112A or 112B was applicable. The appellants argued that the Collector should have proceeded in terms of the bond rather than imposing a personal penalty. The Tribunal acknowledged that the Collector had shown leniency by not enforcing the bond and only imposing a penalty. The Tribunal considered the totality of facts and circumstances and decided to reduce the penalty from Rs. 19,922.48 to Rs. 15,000/-, recognizing some scope for leniency but affirming that a penalty was justified.

Conclusion:
The Tribunal partly allowed the appeal, reducing the penalty to Rs. 15,000/- while confirming the Collector's order in all other respects. The judgment emphasized that while mens rea may not always be necessary for imposing penalties under economic laws, the specific circumstances of each case must be considered.

 

 

 

 

Quick Updates:Latest Updates