Appeal dismissed for forged WPC licenses penalty under Section 112 Customs Act deemed proportionate

Delhi HC dismissed appeal challenging penalty under Section 112 of Customs Act for forged WPC licenses. Goods worth Rs 3.13 crores were imported using fabricated documents. Court held that redemption fine of Rs 60 lakhs (19% of goods value) and penalty of Rs 15 lakhs each on appellants (totaling 9.5%) was proportionate and judicially exercised. Authorities could have imposed penalties up to 100% of goods value under Sections 114AA and 125 but exercised discretion favorably. Court found no infirmity in Commissioner's order warranting interference.

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Issues Involved:
1. Liability of appellants under Section 112 of the Customs Act.
2. Confiscation of goods under Section 111 of the Customs Act.
3. Quantum of redemption fine and penalty imposed.

Summary:

1. Liability under Section 112 of the Customs Act:
The appellants contended that they had no mens rea and were unaware that the WPC licenses were forged. However, the court clarified that Section 112(a) of the Customs Act operates on a strict liability principle, meaning no mens rea is required. The appellants' actions rendered the goods liable for confiscation, thus justifying the penalty imposed. Section 112(b), which requires mens rea, was not applicable in this case.

2. Confiscation of Goods under Section 111 of the Customs Act:
The court emphasized that the importation was carried out using forged WPC licenses, contravening Section 111(d) of the Customs Act. This section mandates confiscation of goods imported contrary to any prohibition imposed by the Act. The court concluded that the goods were rightly confiscated as the appellants failed to produce valid WPC licenses.

3. Quantum of Redemption Fine and Penalty:
The appellants argued that the redemption fine and penalty were harsh and excessive. The court noted that the Commissioner of Customs had exercised discretion judicially, imposing a redemption fine of 19% and a penalty of 9.5% of the goods' value, which was within legal limits. The court referenced the Supreme Court's judgment in Akbar Badrudin Giwani, affirming that the penalty and fine were not excessive given the circumstances. The court also cited Jain Exports Pvt Ltd, reiterating that once contravention is established, the penalty must follow, and only the quantum is discretionary.

Conclusion:
The court upheld the Tribunal's judgment, dismissing the appeals and confirming the confiscation of goods and penalties imposed. The discretion exercised by the Commissioner of Customs was deemed judicial and appropriate, with no grounds for interference.

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