2008 (12) TMI 526 - AT - Customs

Tribunal denies full waiver of penalties in import case involving unfit goods.

The Tribunal ruled against an unconditional waiver of the pre-deposit of penalties in a case involving the import of prohibited goods found unfit for ... Stay/Dispensation of pre-deposit - Penalty - Imposition of Issues:1. Waiver of pre-deposit of penalty confirmed by the impugned order-in-appeal.2. Import of prohibited goods found unfit for human consumption.3. Imposition of penalty under Section 112(a) of the Customs Act, 1962.4. Applicability of judgments in similar cases to the present situation.5. Requirement of mens rea for imposition of penalty under Section 112(a).Analysis:1. The case involved applications for the waiver of pre-deposit of penalties confirmed by the impugned order-in-appeal. The Appellants imported consignments of Garlic from Pakistan with Phytosanitary Certificates, but upon examination, the goods were found unfit for human consumption, leading to confiscation under Section 111(d) of the Customs Act, 1962, and imposition of penalties under Section 112(a).2. The Advocate for the Appellant argued that all precautions were taken, evidenced by obtaining the Phytosanitary Certificate, and that the clearance of a part of the consignment without objection indicated no grounds for penalty imposition. However, the Departmental Representative contended that since the imported goods were unfit for human consumption, they were liable for confiscation and subsequent penalty under Section 112(a).3. The Tribunal analyzed the provisions of Section 112(a) and emphasized that mens rea was not a prerequisite for imposing penalties under this section. The Tribunal differentiated the present case from a previous judgment, highlighting the distinction in liability for penalties under Section 112(a) as opposed to Section 112(b). Consequently, the Tribunal directed the Appellants to deposit a specified amount within a set period, failing which the pre-deposit of the remaining penalty amount would be waived.4. The judgment underscored that the dispute revolved around the Appellant's act of importing prohibited goods, determining whether it attracted penalties under Section 112(a). The Tribunal's decision was based on a strict interpretation of the statutory provisions and the absence of mens rea requirement for penalty imposition under Section 112(a).5. In conclusion, the Tribunal ruled against an unconditional waiver of the pre-deposit of penalties, citing the statutory provisions and the specific circumstances of the case. The Appellants were instructed to make a deposit within a specified timeframe to partially satisfy the penalty requirements, with further recovery stayed pending compliance.