2023 (7) TMI 218 - HC - Customs

Customs penalty under Section 112(a): abetment requires knowledge while direct confiscation liability requires no malintent, appeal allowed

The note addresses liability under section 112(a) of the Customs Act, explaining that persons who commit acts making goods confiscable incur penalty ... Levy of penalty u/s 112(a) of the Customs Act, 1962 - G-Card hold of customs broker - Personal penalty for abetment in evasion of duty of customs - illegal import of prohibited goods - gas cylinders and salaam mishri - mis-declaration of goods - appellant had knowledge of the import of prohibited goods or not - HELD THAT:- Indisputably, persons who have committed the acts of omission or commission in relation to goods that rendered them liable for confiscation, are liable to pay the penalty as stipulated under Section 112(a) of the Customs Act, without any requirement to establish their mal intent. However, the same principle would not apply to persons who are alleged to have abetted such acts of omission or commission. This is because, abetment, necessarily requires, at the minimum, knowledge of the offending Act. The use of the expression ‘abet’ in Section 112(a) of the Customs Act, makes it implicit that the person charged, who is alleged to have abetted the acts of omission or commission, has knowledge and is aware of the said acts. A plain meaning of the word ‘abet’ means instigation, aid, encouragement of an offence - It necessarily involves the knowledge that the act being abetted is wrong. In the context of Section 112(a) of the Customs Act, by definition, the expression ‘abet’ means instigating, conspiring, intentionally aiding the acts of commission or omission that render the goods liable for confiscation - It is apparent that the knowledge of a wrongful act of omission or commission, which rendered the goods liable for confiscation under Section 111 of the Customs Act, is a necessary element for the offence of abetting the doing of such an act. In M/S AMRITLAKSHMI MACHINES WORK, MR. N.K. BRAMCHARI, MANAGING PARTNER, M/S. AMRITLAKSHMI MACHINE WORKS VERSUS COMMISSIONER OF CUSTOMS (IMPORT) [2016 (2) TMI 57 - BOMBAY HIGH COURT] a Full Bench of the Bombay High Court had considered the aforesaid issue and held that the word ‘abetment’ is required to be assigned the same meaning as under Section 3(1) of the General Clauses Act, 1897. The penalty imposed on the appellant under Section 112(a) of the Customs Act is set aside - Appeal allowed. Issues Involved:1. Imposition of penalty under Section 112(a) of the Customs Act.2. Knowledge and abetment of illegal importation.3. Legal interpretation of 'abetment' in the context of customs law.Summary:Imposition of Penalty under Section 112(a) of the Customs Act:The appellant, a G-Card holder of M/s GND Cargo Movers, was penalized Rs. 34,14,020/- under Section 112(a) of the Customs Act by the Adjudicating Authority for filing a Bill of Entry for prohibited goods. The Tribunal reduced the penalty to Rs. 10,00,000/- stating no case of connivance was made out against the appellant, and he had unknowingly abetted the illegal import.Knowledge and Abetment of Illegal Importation:The High Court reframed the question to consider if a penalty under Section 112(a) can be imposed on the appellant given the Tribunal's finding that he had no knowledge of the prohibited goods. The court emphasized that the term 'abet' in Section 112(a) implies knowledge of the wrongful act. The Tribunal had found that the appellant's role was limited to the ministerial act of filing the Bill of Entry, without knowledge of the goods being prohibited.Legal Interpretation of 'Abetment':The court highlighted that 'abetment' involves instigation, aid, or encouragement of an offence, which necessarily includes knowledge of the offending act. The court referenced legal definitions and precedents, including the Indian Penal Code and General Clauses Act, to affirm that abetment requires knowledge and intent. The court concluded that the appellant, who had no knowledge of the illegal import, could not be penalized for abetment under Section 112(a).Conclusion:The High Court set aside the penalty imposed on the appellant under Section 112(a) of the Customs Act, answering the reframed question in the negative. The appeal was allowed, and all pending applications were disposed of.