1990 (3) TMI 230 - AT - Customs

Summary

Issues Involved:
1. Time-barred applications under Section 129D(4) of the Customs Act, 1962.
2. Misdeclaration and unauthorized import of goods.
3. Imposition of personal penalty under Section 112 of the Customs Act, 1962.

Detailed Analysis:

1. Time-barred Applications under Section 129D(4) of the Customs Act, 1962:
The respondents raised a preliminary objection that the applications under Section 129D(4) were time-barred, as the communication from the Board was received by the Additional Collector on 26-11-1985, and the applications were received by the Tribunal on 28-2-1986, beyond the three-month period. However, the learned SDR argued that the applications were first addressed to the Registry of the CEGAT, New Delhi, and received on 15-1-1986, which was within the three-month period. Upon examination, it was found that the applications were indeed sent to the Registry of CEGAT at Delhi in time and later transmitted to the West Regional Bench. Therefore, the objection regarding the time limit was overruled.

2. Misdeclaration and Unauthorized Import of Goods:
In the case of M/s. Swastik Woollen Mills, a consignment declared as wool waste was found to contain a significant quantity of synthetic material (Acrylic Fibre) upon examination. The import duty on Acrylic Fibre was much higher, resulting in a duty loss of Rs. 2,33,002/-. The Additional Collector confiscated the goods and levied fines but did not impose a personal penalty, citing a lack of evidence to prove mens rea. Similarly, M/s. Kailash Textile Industries imported goods declared as wool waste, which were found to contain synthetic fibre, leading to a duty loss of Rs. 4,39,607/-. The Additional Collector confiscated the goods and levied fines but refrained from imposing a personal penalty for the same reason.

3. Imposition of Personal Penalty under Section 112 of the Customs Act, 1962:
The Board directed a review of the Additional Collector's orders, arguing that refraining from imposing personal penalties was "bad in law." The learned SDR contended that the deliberate act of concealing acrylic fibre under wool waste indicated mens rea, warranting a penalty under Section 112. The respondents' counsels argued that the Tribunal lacked the jurisdiction to impose penalties and that the Additional Collector's decision not to impose penalties was a judicious exercise of discretion, considering the lack of evidence of mens rea and the respondents' status as actual users.

Upon careful consideration, it was noted that Section 112 uses the term "shall," implying no discretionary element. Once the import was adjudged unauthorized, the imposition of a personal penalty was a logical legal consequence. The Supreme Court's decision in Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh supported this view, emphasizing that penalties must follow statutory violations, with discretion only in the quantum of the penalty, not in its imposition.

In conclusion, the Tribunal found that the Additional Collector should have imposed personal penalties under Section 112, given the established unauthorized import and misdeclaration. The appeals were allowed, and the cases were remanded to the Additional Collector of Customs, Bombay, for issuing fresh orders to impose personal penalties on the respondents in accordance with the law, after hearing them.

Conclusion:
The Tribunal overruled the objection regarding the time-barred applications, upheld the findings of misdeclaration and unauthorized import, and directed the imposition of personal penalties under Section 112 of the Customs Act, remanding the cases for fresh orders by the Additional Collector.