1995 (5) TMI 158 - AT - Customs

Summary

Issues Involved:
1. Unauthorized importation of unmanifested excess cargo.
2. Liability and penalty under Section 112(a) of the Customs Act, 1962.
3. Mens rea requirement for imposing penalties.

Detailed Analysis:

1. Unauthorized Importation of Unmanifested Excess Cargo
The case involves the seizure of 524 pieces of steel billets weighing 369.91 metric tonnes, valued at Rs. 10,14,390/-, by the Dock Intelligence Unit of the Custom House. The goods were found to be unmanifested excess cargo, unloaded from the vessel m.v. Eliza, in contravention of Section 32 of the Customs Act, 1962. The investigation revealed that the goods were unloaded without the permission of the proper customs officer, making them liable for confiscation under Section 111 of the Customs Act, 1962.

2. Liability and Penalty under Section 112(a) of the Customs Act, 1962
The Adjudicating Authority imposed penalties on M/s. The Oceanic Shipping Agency Private Limited and M/s. Federal Union Trading Company. The appellants contended that they had no prior knowledge of the excess cargo and that the manifest was filed based on the Bill of Lading. They argued that there was no mens rea and that they acted in good faith by abandoning the excess goods to the Port and Customs upon discovery.

The Department argued that both companies were liable under Section 112(a) of the Customs Act, 1962. M/s. Federal Union Trading Company, as the agent of the vessel's owner, had signed declarations stating that the cargo declaration was true. The unmanifested cargo was not mentioned in the declaration, making it liable for confiscation. M/s. Oceanic Shipping Agency Pvt. Ltd. was responsible for unloading the cargo and thus was also liable for the unmanifested excess cargo.

The Tribunal held that under Section 112(a), the mental state of the appellants was irrelevant, and the act of omitting the unmanifested cargo in the declaration made the goods liable for confiscation. The penalties imposed were in accordance with the law, but the amounts were reduced to Rs. 50,000/- for each appellant.

3. Mens Rea Requirement for Imposing Penalties
The Tribunal cited legal precedents to establish that mens rea is not a required element under Section 112(a) of the Customs Act, 1962. The Calcutta High Court in AIR 1969 Calcutta 260 and the Supreme Court in 1989 (42) E.L.T. 350 and 1989 (40) E.L.T. 230 (SC) held that the mental state is irrelevant for imposing penalties under statutory provisions that prescribe strict liability. The act of filing an incorrect manifest or omitting required details is sufficient to attract penalties.

Conclusion:
The appeals were disposed of with the penalties reduced to Rs. 50,000/- each for M/s. Federal Union Trading Company and M/s. Oceanic Shipping Agency Pvt. Ltd. The Tribunal confirmed the liability under Section 112(a) of the Customs Act, 1962, emphasizing that mens rea is not necessary for imposing penalties under this provision.