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TMI Blog2024 (12) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... s [ 1988 (5) TMI 50 - SUPREME COURT] . The High Court held that not only does the adjudicating authority have the discretion to decide whether or not to confiscate goods which are liable to confiscation, but it has to exercise this discretion judicially and not arbitrarily. The meaning of the expression shall be liable to confiscation or penalty in the Customs Act is that a penalty may be imposed on the person who falls under the section or, as the case may be, the goods which fall under the section may be confiscated. The adjudicating authority not only has the discretion but also an obligation to judiciously exercise it and decide whether to impose penalty or not or, as the case may be, confiscate or not confiscate the goods. The mis-declaration of the year of manufacture of the capital goods was discovered only on investigation. Since the EPCG licence was obtained through mis-declaration, the machinery so imported was not eligible for exemption from duty and therefore, duty is recoverable along with interest and penalties - The allegation is that in the application made to the DGFT for EPCG scheme [under the Foreign Trade (Development Regulation) Act, 1992 read with the Foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividuals. When they were heard in 2017, the jurisdiction of the Commissioner of Customs (Preventive) Jodhpur who issued the SCN was in question. This Tribunal had remanded all matters to the Commissioner to decide the matters after final decision by the Supreme Court on the question of jurisdiction in the Special Leave Petition filed against the judgment of the Delhi High Court in Mangli Impex Limited vs. Union of India [2016(339)ELT 605(Del.)]. 4. Revenue had filed appeals before the Rajasthan High Court assailing the orders of this Tribunal remanding the matters to the Commissioner. In some cases, the High Court upheld the remand orders of this Tribunal and those cases have since been before the Commissioner to decide. In some other cases, including this case, the High Court set aside the order of this Tribunal and remanded the matters to this Tribunal to decide. 5. With respect to this appeal, Revenue had filed Customs Appeal No. 35/2018 which was decided along with other appeals by the High Court by a common judgment and order dated 22.8.2019. The operative part of this judgment is as follows: 8. Accordingly, the impugned orders in the appeals are hereby set aside and all the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der this section if: (a) a person makes, signs, uses or causes to be made, signed or used any declaration, statement or document which is false or incorrect; (b) he does so knowingly or intentionally; and (c) such declaration, statement or document is in transaction of business for the purposes of this Act. 13. If it is established that the person had knowingly or intentionally made, signed, used (or caused to be made, signed or used) a false declaration, statement or document in the transaction for the purpose of the Customs Act, then, he shall be liable to penalty under section 114AA of the Customs Act. 14. Section 114AA of the Customs Act does not provide that the person shall be penalised but it only states that the person shall be liable to penalty. The question which arises is what is the meaning of the expression liable to penalty . The Concise Oxford Dictionary gives the meaning of liable as follows: liable. Adj. 1 responsible by law; legally answerable. (liable to) subject by law to. 2. (liable to something) likely to do something. 3.(liable to) likely to experience (something undesirable): areas liable to flooding . 15. Thus, the term liable could either mean that one is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been let off with a warning, and without the goods being confiscated. The language does necessarily imply that there is a discretion because the language is not such goods shall be confiscated . On the other hand the language is such goods shall be liable to confiscation . The Collector of Customs when acting under Section 167 obviously acting in a quasi-judicial capacity. When discretion is vested in such a quasi-judicial tribunal, such discretion must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call for the drastic punishment of confiscation. If there was a case in which discretion should have been exercised in favour of the importer, this was such a case. The appellants had placed the order and the goods had arrived when admittedly the practice prevailing both with the merchants and with the Custom authorities permitted goods of the category which the appellants imported under a licence such as the appellants held. The Collector does not appear to have dealt with the case as if he was vested with judicial discretion because he has not given any reason why the drastic punishment of confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is-declaration of the year of manufacture of the capital goods was discovered only on investigation. Since the EPCG licence was obtained through mis-declaration, the machinery so imported was not eligible for exemption from duty and therefore, duty is recoverable along with interest and penalties. 21. It needs to be noted that the case of the department is not that the nature of goods or year of manufacture was mis-declared in the Bill of Entry or under any declaration made under the Customs Act. The allegation is that in the application made to the DGFT for EPCG scheme [under the Foreign Trade (Development Regulation) Act, 1992 read with the Foreign Trade Policy 2009-2014], the manufacturers had mis-declared the year of manufacture of the machinery to be imported. Insofar as M/s. Nimbark Textile Mills of which the appellant is the proprietor is concerned, this matter is before the Commissioner to decide in the remand proceedings. 22. Even if the case is decided against M/s. Nimbark Textile Mills, the appellant herein can still not be penalised under Section 114AA of the Customs Act because this section renders one liable to penalty only in case of mis-declaration with knowledge or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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