TaxTMI 
TaxTMI 
2009 (8) TMI 477
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...., show cause notice dated 29th April, 1985 was issued to the petitioner no. 1 and several others, under Section 4(1) read with Section 4(i) of the Imports and Exports (Control) Act, 1947 (Act, for short) and Clause 10 read with Clause 8 of the Imports (Control) Order 1955 (Order, for short). It was alleged that the petitioner no. 1 had imported medical oxygen cylinders against the additional licenses for total cost insurance and freight value of Rs.16,39,210/-, contrary to para 115 of the Import Policy for the year 1981-82. It was also alleged that the import of oxygen cylinders was not covered under paragraph 186 (8) of the Import Policy 1981-82. 4. The petitioner no. 1 submitted their reply dated 13th July, 1985 but the same was not accepted and a penalty order dated 30-5-1991 was passed under Section 4(i) of the Act, imposing penalty of Rs.10 lakhs on the petitioner no. 1. In addition, the partners/directors of the petitioner no. 1 were barred from importing goods, receiving imports licences etc. and allotment of imported goods through STC/MMTC or similar agencies for the period 15-5-1991 to 31-3-1992. First appeal filed by the petitioner No. 1 was dismissed vide order dated 22....
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....s have to be read harmoniously to understand the intention behind the said paragraphs and interpret them. Paragraph 323 of the said Handbook states that any article requiring a licence to be imported would be treated as an unauthorized import, if there was no licence or valid licence for the said import and the importer/owner of the goods would be liable to penalty under the Customs Act, 1962 without prejudice to any action that might be taken under the Act and the order made thereunder. 8. Paragraph 323 further clarifies that the trade import control authorities cannot regularize the import by grant of ex-post facto licenses nor were they entitled to amend the existing licences after the imports were made. Punishment under the Customs Act, 1962 was independent of and without prejudice to the action under the Act/order. Thus, as per paragraph 323, provisions of the Customs Act, 1962 and Act operate in their own field and separately, though the two enactment were connected and related. Action against violation of the two Acts could be taken under the respective provisions of the said Acts. Punishment under the provisions of Customs Act, 1962 was without prejudice to other action wh....
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.... 1962, penalty can be imposed if there is violation of any other enactment. It is not correct as suggested by the petitioner that Section 127 of the Customs Act, 1962 is applicable only when confiscation or penalty is imposed under the said Act and only in such cases penalty can be inflicted under any other enactment. Section 127 only clarifies that penalty under the Customs Act, 1962 does not bar or prohibit infliction of punishment/penalty under any other enactment. Therefore, punishment/penalty can be imposed under the Customs Act, 1962 or any other enactment. Penalty under the Customs Act, 1962 is not a necessary pre-condition or a mandatory condition before penalty can be imposed under any other enactment. 14. Section 4(j) of the Act reads as under :- "4(j).Confiscation or penalty not to interfere with other punishments. - No confiscation made or penalty imposed under this Act shall prevent the infliction of any other punishment to which the person affected thereby is liable under the provisions of this Act or under any other law for the time being in force." 15. A penalty order under the Act was independent and did not prevent infliction of punishment under any other law f....
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....ver intended to act as a bar to any prosecution that might be permissible after the award of confiscation, penalty or increased rate of duty. It was merely an enabling section and not a barring section and seems to have been put in the Act ex abundanti cautela. When however clause (81) was introduced in Section 167, it became possible in some cases where goods had been confiscated and penalty inflicted under the Act by the Customs Authorities to prosecute persons also under clause (81) of the Act. That however would not change the nature of the provision contained in Section 186 which was an enabling provision and not a barring provision. If the intention was to bar prosecutions in consequence of the award of confiscation, penalty or increased rate of duty, the words of Section 186 would have been very different. We cannot therefore read in Section 186 a bar by implication to a prosecution under the Act simply because Section 186 enables prosecution under any other law. In this view of the matter, Section 186 is no bar to the prosecution for an offence under the Act in connection with a matter in which the award of confiscation, penalty or increased rate of duty has been made."(emp....
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....me Court is, therefore, applied. In Chairman, SEBI (supra), it was observed:- "35. In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulations is established and hence the intention of the parties committing such violation becomes wholly irrelevant. A breach of civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the Regulations would immediately attract the levy of penalty irrespective of the fact whether contravention must be made by the defaulter with guilty intention or not. We also further held that unless the language of the statute indicates the need to establish the presence of mens rea, it is wholly unnecessary to ascertain whether such a violation was intentional or not. On a careful perusal of Section 15-D(b) and Section 15-E of the Act, there is nothing which requires that mens rea must be proved before penalty can be imposed under these provisions. Hence once the contravention is established then the penalty is to follow." 19. Section 4(i) of the Act under which penalty is being imposed, reads as under :- "4(i).Liability to penalty....
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....establish and prove mens rea or mala fide intention. 21. Section 4(i) of the Act, however, gave wide discretion to the authorities to impose penalty not exceeding five times of the value of the goods or material or Rs. 1,000/-, whichever was more. The minimum penalty, which could be imposed, therefore, was Rs.1,000/-. The maximum penalty could be five times of the value of the goods or the material. Penalty could be imposed between the maximum amount or the minimum amount, i.e., within five times of the value of the goods or material or Rs. 1,000/-. While fixing the quantum of penalty the authorities had to take into account the conduct of the person including his intention, cause, nature of fault whether it was technical violation or only a venial breach. Thus, the authorities had wide discretion in fixing the quantum of penalty, which could be imposed. Once penalty was imposable, one of the guiding factors on question of quantum of fine/penalty was the conduct of the person. In Chairman, SEBI (supra), the Supreme Court had referred to the discretion of authorities and the nature of the penalty and it was observed as under :- "Hence, we are of the view that once the contraventio....
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....ds but the two provisions are also separated by time. The penalty provision of Section 11AC would come into play only after an order is passed under Section 11A(2) with the finding that the escaped duty was the result of deception by the assessee by adopting a means as indicated in Section 11AC. 19. From the aforesaid discussion it is clear that penalty under Section 11AC, as the word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section." 23. Thereafter, reference was made to the case of Dharamendra Textile (supra) and it was observed as under :- "23. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. That is what Dharamendra Textile decides. 24. It must, however, be made clear that what is stated above in....