2004 (1) TMI 427 - AT - Customs

CESTAT overturns penalties in Customs Act case due to lack of intent and awareness.

The Appellate Tribunal CESTAT, Mumbai overturned penalties imposed under Section 114(i) of the Customs Act, 1962 on three appellants for their alleged ... Penalty on export incharge and clerks of CHA Issues:- Penalty imposed under Section 114(i) of the Customs Act, 1962 on three appellants for their alleged involvement in smuggling Mandrax tablets.- Role of each appellant in the customs examination and clearance process.- Lack of specific knowledge about the contents of the smuggled goods by the appellants.- Applicability of mens rea and terms of employment in determining liability for penalty under Section 114(i).- Connection between the acts of the appellants and the liability for confiscation of goods.The judgment by the Appellate Tribunal CESTAT, Mumbai deals with three appeals challenging penalties imposed under Section 114(i) of the Customs Act, 1962 on the appellants for their alleged involvement in smuggling Mandrax tablets. The first appellant, Shri Bhavesh D. Sonchhatra, was penalized for his role as the export incharge of a company involved in the smuggling operation. The second appellant, Shri Vittal Uttekar, faced a penalty for changing details in the shipping bill without permission, indicating mala fide intention. The third appellant, Shri Ashok N. Borge, was penalized for attending to customs examination without disclosing changes made in the shipping bill. The goods subject to confiscation were Mandrax tablets concealed in an export shipment of furniture.Upon review, the Tribunal found that the appellants lacked specific knowledge about the contents of the smuggled goods. Despite their roles in the customs clearance process, the appellants, as employees of the Custom House Agent (CHA) firm, did not possess mens rea regarding the presence of Mandrax tablets. Changing the mode of clearance from 'self' to 'CHA' indicated no intent to conceal the contraband, as it would lead back to them if known. The appellants' assertion of no connection or awareness of the Mandrax was accepted by the Tribunal.The Tribunal emphasized that the appellants were acting within the terms of their employment, which did not warrant penal consequences under Section 114(i) of the Customs Act, 1962. As their actions did not directly render the goods liable to confiscation, the imposition of penalties under Section 114(i) was deemed unjustified. Consequently, the appeals of all three appellants were allowed, overturning the penalties imposed on them.In conclusion, the judgment highlights the importance of establishing mens rea and specific knowledge in cases involving penalties under the Customs Act, 1962. The Tribunal's decision focused on the lack of evidence linking the appellants to the smuggling operation, leading to the reversal of the penalties imposed on them. The ruling underscores the significance of individual intent and awareness in determining liability for customs violations and associated penalties.