TaxTMI 
TaxTMI 
2016 (2) TMI 57
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....: "Whether the Tribunal has erred in imposing simultaneous penalties on both partners and partnership firm?" This reference arose as in the view of the Division Bench in Amritlakshmi Machine Works (supra) there was a cleavage of opinion on the above issue between the decisions of two Division Benches of this Court. In Texoplast Industries v/s. Additional Commissioner of Customs -272 ELT 513 the Division Bench answered the above question in the negative i.e. in favour of the Revenue while in Commissioner of Customs (EP) v/s. Jupiter Exports -213 ELT 641 the Division bench answered the above question in the affirmative i.e. in favour of the Appellant-Assessee. 2. In view of the above conflict, the following questions have been referred to us for our opinion: "(a) Whether under the Customs Act, 1962 and particularly in exercise of the powers conferred by Section 112(a) thereof, simultaneous penalties on both the Partner and Partnership firm can be imposed? (b) Whether, the judgment in the case of Commissioner of Customs (E.P.) v/s. Jupiter Exports reported in 2007 (213) E.L.T. 641 (Bom.), holding that separate penalty on a partnership firm and a partne....
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....ance License No. 0111434 dated 22-11-1999 issued in the name of M/s. Amrit Laxmi Machine Works and transferred in the names of these firms and that this duplicate advance license was issued against the original license No. 03014593 dated 28-11-1996. The limits of this license and terms thereof are referred to and it is alleged that in the light of information received, the bills of entry were collected, documents were scrutinized and which reveal details of the transaction. The details of good covered by another 29 bills of entry are referred to and in the light of further disclosures, what has been alleged is that M/s. Amrit Laxmi Machine Works, Khar, Mumbai, the license holder and Shri N. Nagdutt Bramhachari, Directo of the license holding firm for the advance license No. 0111434 dated 22-11-1996 read with license No. 03014593 dated 28111996 have caused the obtaining of the advance license duplicate copy of the advance license, amendment to the list attached to the license so as to cover the goods which were not used in the export product and made misrepresentation in obtaining duplicate copy of the license. But, for the said license being obtained in the manner in which it has b....
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....pen to the Authorities under the Act to impose simultaneous penalties upon the Appellantfirm and the Appellantpartner of the firm. This is so as this court in Jupiter Exports (supra) has held that when a penalty is imposed upon the partnership firm, separate penalty cannot be imposed upon the partner of the firm. As against the above, the Revenue contended that in view of the later decision of this Court in Textoplast Industries (supra) rendered after considering the decision in Jupiter Exports (supra), simultaneous penalties are imposable upon both the partnership firm and its partner under Section 112(a) of the Act. 6. The Division Bench in Amritlakshmi Machine Works (supra) observing the apparent conflict between the decisions rendered by the two Division Benches in Jupiter Exports (supra) and Textoplast Industries(supra) referred the above questions to the Hon'ble the Chief Justice. This for constituting a larger Bench of this court so as to resolve the conflicting views of the two earlier Division Benches. 7. It is in the above context that the two questions as formulated herein above have been referred by the Hon'ble the Chief Justice for consideration of this C....
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....ical to Section 68 of FERA, it is not. This is so as the width of application of Section 140 of the Act is restricted. Evident from the fact that Section 140 of the Act is applicable only to offences under Chapter XVI of the Act which when contrasted with Section 138B of the Act, which is also a part of Chapter XVI is made applicable across the Act. Thus, the provisions of Section 140 of the Act have to be restricted in its application; (c) It was submitted that Chapter XVI of the Act applies to offences and prosecution alone as evident from the heading of the Chapter XVI of the Act. In contrast Chapter XIV of the Act (Section 112 is a part thereof) deals with confiscation of goods and imposition of penalties and not with offences as specified in Chapter XVI of the Act; (d) In any view, it is submitted that on a plain reading of Section 112(a) of the Act, no penalty is simultaneously imposable upon the partnershipfirm and its partners. The penalty under Section 112(a) of the Act is imposable upon a person also who does or omits to do any act which renders the imported goods liable to confiscation. A person not being defined under the Act, has to be understood as d....
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.... any person. It is emphasized that the penalty is not restricted to only the importer. Therefore, where under the Customs Act, the Partnershipfirm is an importer who has filed a bill of entry, it can be visited with penalty in its capacity as an importer. This is so as a firm is a person as defined under the General Clauses Act, 1897. A partner of the Partnershipfirm can be visited with penalty along with the firm under the Act. This is so as a partner is a person different from the importer i.e. the partnershipfirm. Section 112 of the Act does not restrict the number of persons on whom penalty can be imposed; and (d) The application of the decision of the Apex Court in Standard Chartered (supra) while dealing with Section 68 of the FERA is apposite while considering Section 140 of the Act. This is so as in fact, there is no difference in the scheme of FERA and the Act particularly with regard to Section 140 of the Act and Section 68 of FERA. The penalty which is imposed under Section 112(a) of the Act is in respect of goods which are liable for confiscation under Section 111 of the Act. The goods which are liable for confiscation under Section 111 of the Act arises out of....
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....f) any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned; (g) any dutiable or prohibited goods which are unloaded from a conveyance in contravention of the provisions of section 32, other than goods inadvertently unloaded but included in the record kept under subsection (2) of section 45; (h) any dutiable or prohibited goods unloaded or attempted to be unloaded in contravention of the provisions of section 33 or section 34; (i) any dutiable or prohibited goods found concealed in any manner in any package either before or after the unloading thereof; (j) any dutiable or prohibited goods removed or attempted to be removed from a customs area or a warehouse without the permission of the proper officer or contrary to the terms of such permission; (k) any dutiable or prohibited goods imported by land in respect of which the order permitting clearance of the goods required to be produced under section 109 is not produced or which do not correspond in any material particular with the specification contained therein; (l) any dutiable or prohibite....
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....ade under section 77 (in either case hereinafter in this section referred to as the declared value) is higher than the value thereof, to a penalty [not exceeding the difference between the declared value and the value thereof or five thousand rupees], whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty [not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees],whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty [not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest]." CHAPTER - XVI OFFENCES AND PROSECUTIONS 135: Evasion of duty or prohibitions -(1) Without prejudice to any action that may be taken under this Act, if any person (a) is in relation to any goods in any way knowingly concerned in misdeclaration of value or in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed ....
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.... any such contravention or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement or any other officer of Enforcement not below the rank of an Assistant Director of Enforcement specially empowered in this behalf by order of the Central Government (in either case hereinafter referred to as the adjudicating officer). "56:-Offences and prosecutions.- (1) Without prejudice to any award of penalty by the adjudicating officer under this Act, if any person contravenes any of the provisions of this Act [other than section 13, clause (a) of subsection (1) of [section 18, section 18A], clause (a) of subsection (1) of section 19, subsection (2) of section 44 and sections 57 and 58], or of any rule, direction or order made thereunder he shall, upon conviction by a Court, be punishable, - (i) .... .... .... .... (ii) .... .... .... .... (2) to 6 .... .... ...." "68:-Offences by companies - (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time of the contravention was committed, was in....
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....gful acts of a partner.- Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefor to the same extent as the partner." 12. At the very outset, Mr. Rao, learned Counsel appearing for the Revenue contends that the entire basis for referring the questions to the Larger Bench, arises out of a fundamental error in concluding that there is a difference of opinion in the two decisions rendered by the Division Benches of this Court in Jupiter Exports (supra) and Textoplast Industries (supra). It is submitted that in the case of Jupiter Exports (supra), though the Court did observe that it is well settled that simultaneous penalties cannot be imposed upon the partnershipfirm and its partners, the same was in fact, not a question raised in the appeal before it. The questions raised before this Court in Jupiter Exports (supra) were as under: "(a) Whether exports made by manipulating and forging the documents and creating false records and exporting items other than that declared in the shippin....
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.... in Jupiter Exports (supra) were rendered in the context of the submission made on behalf of the Revenue that the order of the Tribunal be set aside in its entirety and the order of the Commissioner of Customs be restored. The order of the Commissioner of Customs had, inter alia, imposed simultaneous penalties upon the partnershipfirm and its partners. The appeal filed by the firm(importer) and its partners before the Tribunal in Jupiter Exports (supra) was allowed to the extent it imposed simultaneous penalties upon the partnershipfirm and its partners. The Revenue had carried the issue in appeal before this Court and albeit the questions as framed before the Division Bench of this Court did not raise the issue of simultaneous penalties being imposed upon the partnershipfirm and its partners yet, in the context of the submissions made before it, the Court gave its findings on the issue viz. simultaneous penalties not being imposable. Therefore to the above extent, the order of the Commissioner of Customs which was sought to be restored by the Revenue, could not be done, in its entirety. Thus, it cannot be now urged by the Revenue that the issue did not arise for consideration befo....
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.... importer under Section 46 of the Act and the same is assessed to duty under Section 17 of the Act by a proper Officer of the Customs after being satisfied that the goods being imported, are not prohibited goods liable for confiscation under Section 111 of the Act. It is only then that the Assessing Officer passes an order, allowing clearance of the goods for home consumption either from the Customs Station i.e. Docks, Air Port and/or from the warehouse where the goods have been stored. 16. So far as penal provisions under the Act are concerned Chapter XIV of the Act provides for confiscation of improperly imported goods and conveyances and imposition of penalties. The bare reading of Section 111 of the Act which is a part of Chapter XIV of the Act indicates all acts and/or omissions which would render the goods being imported liable for confiscation as they would become prohibited goods as defined under Section 2(33) of the Act. This action under Section 111 of the Act is an action against the offending goods alone. Section 112 of the Act provides for imposition of penalty in respect of persons concerned with the import of offending goods which are hit by Section 111 of the Act....
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....ingly concerned in misdeclaration of value or fraudulent evasion of duty or of any prohibition under the Act or any other law for the time being in force in respect of such goods (Covers cases falling under Section 112(a) of the Act with the additional requirement of mens rea); While Section 135(1)(b) covers cases of persons who are knowingly concerned with acquiring, possessing, carrying, depositing, harbouring keeping, selling or purchasing or dealing with goods which he knows or has reason to believe are liable for confiscation under Section 111 of the Act. (Covers cases falling under Section 112(b) of the Act); Satisfaction inter alia of any the above two sub clauses is an offence for the purposes of Chapter XVI of the Act. However, knowledge is a sinequanon for applicability of any of the two provisions. The words in Section 135(1)(a) of the Act are very wide viz. "in any way knowingly concerned in". Section 140 which is a part of Chapter XVI of the Act, provides that where an offence is committed under Chapter XVI of the Act is a company which by an explanation thereto includes a partnership firm, then every person who was at the time when the offence was committed was ....
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....ion Bench of this Court in Jupiter Exports (supra). The subsequent decision of this Court in Textoplast Industries (supra) has incorrectly applied the decision of the Apex Court in Standard Chartered Bank (supra) to read the provisions of Section 140 of the Act into Section 112(a) of the Act. This is particularly so as according to the appellant when the decision in Standard Chartered Bank (supra) was rendered in the context of FERA provisions. It is submitted that not only the scheme of the Act and FERA are different as is evident from the division of various Sections of the Act into different chapters of the Act unlike FERA. Besides the differences in the language employed in Section 140 of the Act and Section 68 of FERA. Thus the interpretation put by the Apex Court on Section 68 of FERA cannot be applied to Section 140 of the Act. This is contested by the Revenue who submit that there is, in fact, no distinction in the scheme of FERA and the Act in the context of Section 140 of the Act and Section 68 of FERA. Therefore, the application of the decision of the Apex Court in Standard Chartered Bank (supra) while dealing with Section 68 of the FERA is appropriate while considering ....
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....he Act on the following basis: "16:-Finally, Section 68 was held only to be clarificatory in nature: "Section 68 only clarifies the nature and mode of proceeding when the contravention of any of the provisions of the Act is by a company, whether it be by way of adjudication to impose a penalty or by way of prosecution leading to imprisonment and a fine." (emphasis supplied) The ratio of the decision of the Supreme Court would indicate the following principles: (i) Both, in the matter of criminal prosecution and in the imposition of a penalty, following a process of adjudication, the essential basis for the proceeding is a contravention of the provisions of the Act; (ii) The expression "offence" cannot be narrowly confined to a commission of a crime alone, but would comprehend within its purview, the commission of an act which is prohibited by law; (iii) The deeming fiction which is created in the case of an offence by a Company so as to bring within its purview, a person in charge of or responsible for the affairs of the Company as well as its stated officers would apply not only to a criminal prosecution, but to an adjudication as well. This wou....
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....ot be of much avail in interpreting a taxing statute. Moreover, it is clear that the Parliament had specifically provided in Section 140 of the Act that it shall have application only in respect of offences under this Chapter i.e. Chapter XVI of the Act. If Section 140 of the Act is juxtaposed with Section 138B of the Act both being a part of Chapter XVI of the Act, it would be clear that restricting the operation of Section 140 of the Act to only Chapter XVI of the Act is deliberate. This is so as whenever the Parliament intended that the provisions of Chapter XVI of the Act shall have application in relation to any other proceedings under the Act, it has so provided, as is evident from Section 138B(2) of the Act. Therefore, we do not agree with the view of the Division Bench in Textoplast Industries (supra) to the extent it holds that the decision of the Apex Court in Standard Chartered Bank (supra) would apply to Section 140 of the Act so as to govern adjudication proceedings under Section 112(a) of the Act as in the case of Section 68 of FERA being applicable to Section 50 of FERA. 23. Similarly, the reliance by the Revenue upon the decision of the Apex Court in Prakash Meta....
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....ingh v/s. Tej Balendar Prajapati -2004 (10) SCC 65. 24. It was then contended by the Revenue, de hors the decision of the Division Bench of this Court in Textoplast Industries (supra) to the extent it placed reliance upon the decision of the Supreme Court in Standard Chartered Bank (supra), the provisions of Section 140 of the Act has to be read in to Section 112(a) of the Act during the adjudication proceedings. This on a plain interpretation of the Act. In fact it is emphasized that this Court in Textoplast Industries (supra) had on first principles held that Section 140 of the Act has to be read into Section 112(a) of the Act. It is submitted that the goods which are liable for confiscation under Section 111 of the Act arises out of acts and/or omissions which would also be an offence for the purposes of Chapter XVI of the Act as provided for under Section 135(1)(a) of the Act. Thus, the provisions of Section 140 of the Act could be read into Section 112(a) of the Act while invoking the same for the purpose of imposition of penalty upon the partners as well as the firm. This is contested by the Appellant contending that the offence listed out in Section 135 of the Act are onl....
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....read with third category listed in Section 107 of the Indian Penal Code. (See Supreme Court decision in Shree Ram v. State of U.P. -1975 AIR(SC) 175). Mere facilitation without knowledge would not amount to abetting an offence. Parliament has specifically included abetment in Section 112(a) of the Act, to include acts done with knowledge, otherwise the first portion thereof "Any person - (a) who in relation to any goods does or omits to do any act ......" would cover acts done or omitted to be done on account of instigation and/or encouragement without knowledge. However, the first portion of Section 112 (a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who are not directly involved in the act or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112(a) of the Act also includes a person who abets the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a halt as even....
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.... (Control) Act, 1947 makes no reference to mens rea. The abetment referred to therein must also to be treated on the same footing and, therefore, offence of abetment would not require any kind of mens rea before Section 5 of the Import and Export Control Act could be attracted. Thus, the Court refused to interfere in launching of proceedings against respondent no.1. However, the Court does record that in facts before it, there is no dispute that the respondent no.1 was aware of the terms and conditions imposed in the licence. It is also undisputed that he has given his consent to the company for selling the imported goods. Thus, in the facts before it mens rea did exist. Therefore, the aforesaid decisions would not apply while interpreting Section 112(a) of the Act as the observation of presence of mens rea in case of abetment, not being necessary was in the nature of obiter. We would do well to keep in mind the manner in which a judgment is to be read as observed by the Supreme Court in Natural Resources Allocation -2012 (10) SCC 1 "It is important to read a judgment as a whole keeping in mind that it is not an abstract academic discourse with universal applicability, but heavily ....
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....to be done by the appellant, inexplicable. Much emphasis was laid on the title of Chapter XVI of the Act to emphasize that it applies only to offences and prosecutions. Thus it is submitted that offences which lead to prosecutions would necessarily be criminal offences. However as held by the Supreme Court in Frick (I) Ltd. v/s. UOI18 heading of chapter cannot determine the interpretation of a statutory provision in the absence of any ambiguity in the provision itself. No ambiguity is even alleged in Section 140 of the Act which would justify taking the aid of Chapter heading. Thus we do not need to look at and/or examine the Chapter heading of Chapter XVI of the Act to interpret Section 140 or 135 of the Act. In any case, an identical submission trying to restrict the meaning and ambit of the word offence to only criminal offences was subject matter of consideration by the Apex Court in Standard Chartered Bank (supra). However the same was negatived in the following words: "27:-Both, Section 50 providing for imposition of penalty and Section 56 providing for prosecution, speak of contravention of the provisions of the Act. Contravention is the basic element. The contraven....
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....ommission of a crime alone. It is an act committed against law or omitted where the law requires it and punishable by it. In its legal signification, an offence is the transgression of a law; a breach of the laws established for the protection of the public as distinguished from an infringement of mere private rights; a punishable violation of law, a crime, the doing that which a penal law forbids to be done or omitting to do what it commands (see P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd Edn, 2005 page 3302). This Court in Depot Manager, Andhra Pradesh State Road Transport Corporation Vs. Mohd. Yousuf Miya [(1997) 2 SCC 699] stated that the word 'offence' generally implies infringement of a public duty, as distinguished from mere private rights punishable under criminal law. In Brown v. Allweather Mechanical co. [(1954) 2 QB 443], it was described as "a failure to do something prescribed by a statute may be described as an offence, though no criminal sanction is imposed but merely a pecuniary sanction recoverable as a civil debt." The expression 'offence' as defined in Section 3(38) of the General Clauses Act means an act or omission made punishable by any....
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....er, the question posed to us is specific viz. whether simultaneous penalties upon the firm and its partners can be imposed under Section 112(a) of the Act. Thus, we are to consider only the issue of penalty under Section 112(a) of the Act without reading it with any other provisions. As pointed out above, Section 112(a) of the Act consists of two parts viz: (i) strict liability arising on doing any act or omitting to do it, which renders the imported goods liable to confiscation and (ii) Abetting the act or omission rendering the goods liable to confiscation. Thus in first class of above cases where the allegation against the particular firm is not of abetment but one of doing or omitting to do any act which renders the imported goods liable for confiscation. Then in such cases i.e. where the importer is a partnership firm inasmuch as it is in possession of IEC code number and has filed a Bill of Entry for the import of goods and the allegation is not of abetment but of doing an act or omitting to do an act which rendered the goods liable for confiscation. It has nothing to do with mens rea/knowledge. In such a case a penalty imposed upon the firm would be a penalty imposed upon al....
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....se, a penalty imposed upon the firm would be a penalty imposed upon all the partners of the firm as this has nothing to do with the knowledge of the breach rendering the goods liable for confiscation on the part of the partners concerned. The liability is strict. Therefore, imposed on all parties irrespective of the fact, whether the partner concerned is an active or sleeping partner. 32. It was next contended by the Appellant that in any case on a plain reading of Section 112(a) of the Act, simultaneous penalties are not imposable upon a partnership firm and its partner. In terms of Section 112(a) of the Act a penalty is imposable upon any person whose act or omission to act renders the imported goods liable for confiscation under Section 111 of the Act. The word 'person' has not been defined under the Act. Therefore, the meaning as ascribed to the word 'person' in Section 2(42) of the General Clause Act, 1897 which defines a person to include any company or association or body of individuals whether incorporated or not. Thus, it is not disputed before us that a partnershipfirm is a person for the purpose of Section 112 of the Act. However, according to the Appe....
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....f the Foreign Exchange Regulation Act, 1947 (FERA 1947). However, the same seems to have proceeded on the basis that Section 23C of the FERA, 1947 which was similar to Section 68 of FERA - that penalty was imposed on both the firms as well as on the partners. The contention of the party was that because a firm is not a legal entity, it cannot be a person within the meaning of Section 8 of the FERA 1947 and Section 167 of the Sea Customs Act. This was negatived by applying the definition of person given in General Clauses Act, 1897 and Section 23C of the FERA 1947. Thus, penalty in the facts before the Supreme Court was under the Sea Customs Act for contravention of FERA 1947. In the present case, we are not concerned with the provisions of FERA 1947 and the Sea Customs Act but are only required to consider the provisions of the Act. Further the Apex Court in Agarwal Trading(supra) was not concerned with Section 112(a) of the Act. Thus the above case does not in the context of the question raised for our consideration advance the cause of the Revenue. 34. In fact the IEC number is in the name of the partnership firm which collectively represents all the partners as laid down unde....
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....Act can be invoked while issuing notices under Section 112(a) of the Act on the partner, no question of double penalty arises as the same are being imposed on two separate persons under the Act. 37. In view of the above, the decision of the Division Bench of this Court in Textoplast Industries (supra) to the extent it places reliance upon the Apex Court decision in Standard Chartered Bank (supra) does not seem to be appropriate as it was rendered under a different statute. Each of the two Act i.e. FERA and the Act, provides a different scheme for imposition of penalty. However, the decision in the case of Textoplast Industries (supra) to the extent it holds on first principle that simultaneous penalty is imposable is the correct view only to the following extent:- (a) where the show cause notice makes out a case of an offence under Section 112(a) of the Act read with Section 135 (1)(a) of the Act, then alone, Section 140 of the Act is applicable for penalty upon the partner; or (b) where the show cause notice makes out an independent case of abetment by the partner for the act or omission done by the partnership firm which has rendered the goods liable for conf....
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....imultaneous penalties are imposable upon the firm and its managing partner; or (b) where the show cause notice makes out an independent case of abetment upon the partner for the act or omission of the partnership firm which has rendered the goods liable for confiscation under Section 111 of the Act. This is on the plain reading of Section 112 (a) of the Act, without any reference/ reliance to Chapter XVI of the Act. The decision in Jupiter Exports(supra) holding that no separate penalty upon the firm and the partner can be imposed under Section 112(a) of the Act in all cases is not the correct view. 40. In view of the above we conclude that there is jurisdiction with the authorities under the Act to impose simultaneous penalties upon the partnership firm and its Managing Partner under Section 112(a) of the Act in the above cases. 41. It is made clear that the issue posed before us was only in respect of a partnership firm registered under the Indian Partnership Act 1932. We have not in any manner dealt with partnership firm registered under the Limited liability Partnership Act, 2008 and the liability of its partners under Section 112(a) of the Act. 42. This Refer....
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....bscribe to the conclusion of my learned brother that the decision of the Division Bench of this Court in "Textoplast Industries Vs. Additional Commissioner of Customs, (2011(272) E.L.T. 513 (Bom.)" to the extent it places reliance upon the Apex Court's decision in the case "Standard Chartered Bank V. Directorate of Enforcement, (2006(1997) ELT 18(S.C.)" is not appropriate. I am of the clear opinion that the decision in "Textoplast Industries Vs. Additional Commissioner of Customs" (supra) lays down the correct law in holding that it is permissible to impose penalty separately on partnership firm and its partners in adjudication proceedings under the Customs Act,1962. Having recorded my respectful disagreement, I proceed to record my opinion on the issues which are arise for consideration of the larger Bench. 45. By the referring order of the Division bench, the following questions of law are referred for the opinion of the Larger Bench:- (i) Whether, under the Customs Act,1962 and particularly in exercise of the powers conferred by Section 112(a) thereof, simultaneous penalties on both the Partner and Partnership firm can be imposed ? (ii) Whether, the judg....
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....visions cannot be borrowed to interpret the Act. Learned Counsel for the appellant has also drawn the attention of the Court to the provisions of Section 138B(2) and 138C(4) of the Act to submit that wherever the Legislature has thought it appropriate, the provisions have been made applicable to the entire Act, whereas no such reference is available in Section 140 so as to make it applicable outside Chapter XVI and more particularly to make it applicable in respect of imposing of penalties. It is submitted that the decision of the Division Bench in "Commissioner of Customs (E.P.) Vs. Jupiter Exports" reported in "2007(213) E.L.T. 641 (Bom.) " lays down the correct law which holds that simultaneous penalties cannot be imposed on the firm and the partners. In the written submissions the appellants have urged as under:- (i) Penalty under Section 112(a) of the Act is imposable on "person" who does/omits to do or abets an act rendering goods liable for confiscation under Section 111; (ii) there is no definition of 'person' under the Act, therefore, Section 3(42) of the General Clauses Act,1897 is applicable, under which 'person' includes body of individ....
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....ion Bench in "Textoplast Industries' (supra) has rightly applied the principles of Law as laid down in the decision of the Supreme Court in the "Standard Chartered Bank V. Directorate of Enforcement" (supra) and thus there is no conflict between the decisions in the case of "Textoplast Industries' (supra) and "Commissioner of Customs (E.P.) Vs. Jupiter Exports". It is submitted that, also, the decision of the Supreme Court in the case of "M/s.Agarwal Trading Corporation and others Vs. The Assistant Collector of Customs, (AIR 1972 SC 648)" and the principles of law as laid down in "Standard Chartered Bank V. Directorate of Enforcement" (supra) would wholly cover the issue that simultaneous penalties can be imposed on the firm and its partners. It is submitted that in view of the decision in "Standard Chartered Bank" (supra), the deeming fiction under Section 140 of the Act can be made applicable to the penalty proceedings and thus simultaneous penalties can be imposed on the partners and the firm. It is, therefore submitted that the questions as referred to the Larger Bench do not arise. 49. As noted above, the Division Bench of this Court in the case of "Commissioner of ....
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....ed on the partnership firm and its partners for breach of the provisions of the Customs Act inter alia on first principles and also applying the principles of law laid down by the Supreme Court in the case of "Standard Chartered Bank (supra)". In answering the question "as to whether imposition of a penalty on a partnership firm as well as on the partners under Section 112 of the Act is permissible and justified", the Division Bench considering the scheme of the Act and more particularly, the provisions of Chapter XIV which deal with 'Confiscation of Goods and Imposition of Penalties' as juxtaposed with the provisions of Chapter XVI which deals with the 'Offences and Prosecution', held that the essential element both in the case of criminal prosecution and the adjudication proceedings leading to imposition of penalty, is the breach or the contravention of the provisions of the Act. The Division Bench noted the provisions of Section 68 of the Foreign Exchange Regulation Act which deals with the offences by companies and more particularly the following Explanation to the said provision which would make the firm and its partners liable if the offence is committed by a ....
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....der section 77 (in either case hereinafter in this section referred to as the declared value) is higher than the value thereof, to a penalty [not exceeding the difference between the declared value and the value thereof or five thousand rupees], whichever is the greater; (iv) in the case of goods falling both under clauses (I) and (iii), to a penalty [not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest; [(v) in the case of goods falling both under clauses (ii) and (iii), to a penalty [not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest.]" (emphasis supplied) 54. In the present context legislative background of the Act would be of some relevance. Since ancient times in England duties were collected on import and export of goods and the same had become customary, which came to be termed and popularly known as 'customs'. In India these duties are the prerogative of the Parliament under the Constitution. It is well settled, th....
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....pretation of penal provisions "only applies where after full enquiry and consideration one is left in real doubt. It is not enough that the provision is ambiguous in the sense that it is capable of having two meanings.", for the imprecision of language is such that it is `difficult to draft any provision which is not ambiguous in that sense. Difference of judicial opinion as to the meaning of the provision may also be not enough for applying the rule, and a judge while dealing with a question of construction of the provision must himself be in real doubt before he can call in aid the rule. [Director of Public Prosecutions V. Onewell, (1968)3 All ER 153, p.157 (HL) followed in Farrel V. Alexander, (1976)2 All ER 721, pp.727, 744 (HL); Attorney General's Reference (No.1 of 1988), (1989)2 All ER 1: (1989)2 WLR 729 (HL). STORY, J. in agreeing to the rule in its "true and sober sense" stated the same as follows: "Penal statutes are not to be enlarged by implication or extended to cases not obviously within their words and purport. But where the words are general, and include various classes of persons, I know of no authority, which would justify the court in restricting the....
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....peals, offences and prosecution. 58. A partnership firm can be an importer. If the goods imported by the partnership firm are rendered liable for confiscation, then whether by virtue of Section 112 (a) of the Act penalty can be separately imposed on the firm and its partners or whether the intention is of a levy only on either of them and as a first step what does a plain reading of Section 112 indicate can be considered? Section 112 of the Act opens with the word "any person". When the Legislature has thought it appropriate to use the word 'any person' as regards the applicability of Section 112(a) then what is the purport as regards a partnership firm and its partners. 59. It is to be noted that Section 112 falls under Chapter XIV of the Customs Act which deals with the "Confiscation of goods and conveyances, and imposition of penalties". It is further significant that the Legislature has simplicitor used the word "any person" to fasten the liability of a penalty. In this situation, the first obligation on the Court is to interpret the provision as it stands. The intention of the Legislature which can be discerned from the use of the words 'any person' in fr....
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....tion 2 subsection (2) of the Act necessarily means an individual partner and does not include a firm. 62. The Constitution Bench of the Supreme Court in the case of "Commissioner of Income Tax, Madras and Another Vs. S. V. Angidi Chettiar (AIR 1962 SC 970)" in dealing with a case pertaining to imposition of penalty on a registered firm, under the Income Tax Act read with the provisions of Section 3(42) of the General Clauses Act, observed as under:- "The expression "person" is defined in S.2(1) of the Act as including "a Hindu undivided family and a local authority." That evidently is not an exhaustive definition and recourse is permissible to the General Clauses Act which says in S.3(42) that a "person" includes "any company or association or body of individuals whether incorporated or not." A firm is manifestly a body of individuals and would therefore fall within the definition of "person", and may be exposed to an order for payment of penalty in the circumstances set out in cls. (a), (b) and (c) of S .28 of the Income Tax Act. That a firm, registered or unregistered, may be liable to pay penalty has been further clarified by proviso (d) which declares the quantum of....
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....#39;natural persons'. This would be adopting the literal meaning of the word 'person'. The word person has been described in the Webster Dictionary as under:- "person: 1. a human being, whether man, woman, or child: ... .... .... 3. Social, an individual human being, esp. with reference to his social relationships and behavioral patterns as conditioned by his culture. 4. Philos. A selfconscious or rational being. 5. the actual self or individual personality of a human being...." 67. The Supreme Court in the case of "Oswal Fats and Oils Ltd. Vs. Additional Commissioner (Administration), Bareilly Division, Bareilly & Ors., ((2010)4 SCC 728)" while examining usage of the word 'person' in Section 154(1) of the U.P. Zamindari Abolition and Land Reforms Act,1950, has observed that the word 'person' was required to be interpreted keeping in view the object of the legislation and by applying the rule of contextual interpretation, the applicability of which has been recognized in the decisions of the Supreme Court in "Poppatlal Shah Vs. State of Madras, (AIR 1953 SC 274)", "S.K.Gupta Vs. K.P.Jain, (AIR 1979 SC 734)", "RBI Vs. Peerless General Finance ....
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....mprehensive revision of the Act has not so far been undertaken. Several provisions of the Act have become obsolete. Difficulties have also been experienced in the implementation of certain other provisions. The trade has been pressing for certain changes and facilities. Smuggling, consequent to controlled economy, has presented new problems. To meet these requirement, it has become necessary to revise the Act. The Land Customs Act was passed in 1924. It is not a selfcontained Act and applies by reference provisions of the Sea Customs Act to land customs with certain modifications. There is no separate law relating to air customs, and the administration of air customs is governed by certain rules made under the Indian Aircraft Act,1 911. While revising the Sea Customs Act, it is proposed to consolidate the provisions relating to sea customs, land customs and air customs into one comprehensive measure. The Notes on Clauses explain in detail all the changes which are proposed to be introduced in the new law as compared with the existing law. Dt. Sd/ Notes on Clause 112. Clause 112 makes the following changes in the existing provisions:- ....
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.... be liable to a personal penalty as these acts are in the nature of abetment. These persons may not necessarily be part of the Company or a firm importing the goods. Thus what is significant to be noted from the notes on Clause 112 as appended to the Statement of Objects and Reasons is that every 'contravention' as mentioned under Section 111 of the Act will become liable for a personal penalty, and persons who are actually concerned with the contravention and those who abet such contravention would become liable for a personal penalty. 71. The basis for imposing of a penalty would therefore be the nature of the acts or omission which would render the goods liable for confiscation. Each of the clauses (a) to (p) of Section 111 of the Act speaks of such acts or omission which contravene and or violate the provisions of the Act and thus become directly relevant for the purposes of levy of penalty under Section 112(a) of the Act. Thus what is relevant for the purposes of imposing a penalty is the contravention /breach of the provisions of the Act as specified in section 111 of the Act, rendering the goods liable for confiscation as also aiding and assisting (abetting) such ....
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....avening the provisions of the Act. The persons can be the principal persons or persons in the first degree who contravene the provisions of the Act. The others may be in a category who aid and assist the contravention and thus can be the persons of the second degree in effecting the contravention who can be said to be have abetted the contravention, who also become liable for a penalty under Section 112 (a) of the Act. As a guiding factor the illustration of abetment as appearing in the Note to Clause 112 of the 'Statement of Objects and Reasons', throws a complete light on this aspect. In a given case if a partnership firm which is the importer has acted in contravention of the Act leading to confiscation of goods, in such a case only the firm be imposed a penalty, and not a penalty on the partners who may have actually executed such contravention, in my opinion, is not the intention of the legislature. There can be a situation viceversa. Further these partners can indulge into such acts through another firm and so on and so forth by escaping a penalty. The legislature has thought it appropriate that be it the firm or the partners, the contravention if is, at their hands n....
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.... other, for the purposes of Section 112(a) of the Act, the submission on behalf of the appellant that a simultaneous penalty would amount to double jeopardy cannot be accepted. 73. I am in complete agreement with the submission of as made on behalf of the Revenue that the above position that simultaneous penalties can be imposed on the firm and its partners also stands concluded in view of the authoritative pronouncement of the Supreme Court in the case of "M/s.Agrawal Trading Corporation and others Vs. The Asstt. Collector of Customs, (AIR 1972 SC 648)". In this decision the Supreme Court was dealing with a case in which a fine was imposed on the firm under Section 167(3) of the Sea Customs Act 1878 with a personal liability of Rs. 1000/under Section 167(37) of the Act with further fine of Rs. 51,000/under Section 167(8) of the Act read with Section 23C of the Foreign Exchange Regulation Act. Section 23C was not a penalty provision as it pertained to an offence. Thus the penalty as imposed was under Section 167 of the Sea Customs Act. The currency notes of Rs. 51,000/which were seized were also confiscated. Section 167 of the Sea Customs Act which dealt with the Punishment for ....
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....nd, when any goods are entered at, or brought to be passed through, a custom-house, either for importation or exportation, that tai the packages in which they are contained differ widely from the description given in the bill of entry or application for passing them, or the contents thereof have been wrongly described in such bill or application lion as regards the denominations, characters or conditions according to which such goods are chargeable with duty, or are being imported or exported, or the contents of such packages have been misstated in regard to sort, quality, quantity or value, or (d) goods not stated in the bill of entry or application have been concealed in, or mixed with, the articles specified therein, or have apparently been packed so as to deceive the officers of Customs, and such circumstance is not accounted for to the satisfaction of the Customscollector, 86 & 137 such packages, together with the whole of the goods contained therein, shall be liable to confiscation, and every person concerned in any such offence shall be liable to a penalty not exceeding one thousand rupees. 74. A perusal of the above provisions clearly indicate that the provisions p....
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....expression "director' a partner of the firm. It can be noted that Section 167 of the Sea Customs Act 1878, did not have an explanation as provided under Section 23C of the FERA,1947. In interpreting the above provisions, the Supreme Court held that the contention of the appellant that the firm is not a legal entity and thus it cannot be a person within the meaning of under Section 167(3), (8) and (37) of the Sea Customs Act and Section 8 of the Foreign Exchange Regulation Act was untenable. The Supreme Court, in repelling the contention firstly that the definition of 'person' under the General Clauses Act does not apply to a firm which is not a natural person which has no legal existence and secondly subclauses (3), (8) and (37) of Section 167 of the Sea Customs Act were not applicable to the appellantfirm, held that the 'Explanation' (supra) clearly provides that a company for the purpose of that Section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm means a partner in the firm. In the context of the said provisions (supra) under the Sea Customs Act and the FERA 1949, which d....
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....ers of it who are incharge of its business or are responsible for the conduct of the same, cannot escape liability, unless it is proved by them that the contravention took place without their knowledge or they exercised all due diligence to prevent such contravention." It is therefore quite clear that the Supreme Court need Sections 167(3), (8) and (37) of the Sea Customs Act under which a penalty was imposed, applicable to the firm as also to the partners and upheld simultaneous imposing of the penalty on the firm and its partners by applying the deeming fiction under Section 23C of the FERA,1947. 75. It is significant as also it cannot be overlooked that in the above decision, the Supreme Court has confirmed the following observations of the Division Bench of the Calcutta High Court in the case "M/s.Agarwal Trading Corporation and others Vs. The Assistant Collector of Customs & Ors., (AIR 1964 Cal 347)" "20. The argument that only a natural person is amenable to the jurisdiction under Clauses (3), (8) and (37) of Section 167 of the Sea Customs Act cannot also be accepted. Although the word "person" has not been defined in the Sea Customs Act, under the General Clau....
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....firm including its members were guilty of contravention of law. ... ... ... ... ... ... according to the Customs authority its cashier at the relevant time all prima facie indicate that it was the firm which was attempting to export Indian currency to Hongkong. The inference drawn from the circumstances by the Customs authorities that Tewari could not have been doing it on his own behalf is one which can easily be deduced. On a common sense view of things the firm could be held privy to the attempt to export Indian currency out of India. Of course, it was open to the partners to adduce evidence to the effect that they knew nothing about it, that they had nothing to do with the offending package and that Tewari was doing something without their knowledge or connivance. No attempt in this direction was ever made. In fact the members of the firm did not make use of the opportunity of the personal hearing given to them. ... ... ..." 23. ... ... ... ... I do not find myself able to hold that all the principles of criminal jurisprudence are attracted to enquiries under the Sea Customs Act by the Customs Officers. Dealing with Sea Customs Act and the Land Customs Act in ....
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....the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this subsection shall render any such person liable to such punishment provided in this Chapter if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in subsection (1), where an offence under this Chapter has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation - For the purposes of this section,- (a) "company" means a body corporate and includes a firm or other association of individuals; and (b) "director," in relation to a firm, means a partner i....
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....erved that it is settled by now that the order imposing penalty is the result of a quasi criminal proceedings. It was observed that in England also it has never been doubted that such proceedings are penal in character [Fattorini (Thomas) (Lanchashire) (Ltd., v. Inland Revenue Commissioner), 1943 (11) I.T.R. (Supp.)50.] 78. Imposing of a penalty can also be a punishment. Section 140 indicates the manner in which a contravention by a company can be dealt with. From the perusal of Section 112(a) of the Act, it is difficult to conceive, that a different Legislative intention other than the one in Section 140 of the Act to impose a penalty both on the firm and its partners can be gathered. The above position in law can be ascertained from the decision of the Supreme Court in M/s. Agarwal Trading Corporation (supra) in which the Supreme Court applied the deeming fiction (similar to Section 140 of the Act) created by Section 23C of the FERA,1947 to the penalty provision under Section 167(3), (8) and (37) of the Sea Customs Act to uphold imposing of the penalty on the firm and the partners. The situation in hand, pertaining to the Act is not at all different. In fact Section 140 is ava....
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....in this decision. It is thus necessary to note the following observations of the Supreme Court:- "27. Both, Section 50 providing for imposition of penalty and Section 56 providing for prosecution, speak of contravention of the provisions of the Act. Contravention is the basic element. The contravention makes a person liable both for penalty and for prosecution. Even though the heading to Section 56 refers to offences and prosecutions, what is made punishable by the Section is the contravention of the provisions of the Act and the prosecution is without prejudice to any award of penalty. The award of penalty is also based on the same contravention. Section 63 is the power of confiscation of currency, security or any other money or property in respect of which a contravention of the provisions of the Act has taken place conferred equally on the Adjudicating Authority and the Court, whether it be during an adjudication of the penalty or during a prosecution. Whereas Section 64 (1) relating to preparation or attempt at contravention is confined to Section 56, the provision for prosecution, subSection (2) of Section 64 makes the attempt to contravene or abetment of contraventio....
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....to do something prescribed by a statute may be described as an offence, though no criminal sanction is imposed but merely a pecuniary sanction recoverable as a civil debt." The expression 'offence' as defined in Section 3(38) of the General Clauses Act means an act or omission made punishable by any law for the time being in force. 'Punishable' as noticed by this Court in Sube Singh & Ors. Vs. State of Haryana & Ors. [(1989) 1 SCC 235] is ordinarily defined as deserving of, or capable or liable to punishment. According to Concise Oxford English Dictionary, 'punish' means, 'inflict a penalty on as retribution for an offence, inflict a penalty on someone for (an offence)'. In the New Shorter Oxford English Dictionary (Vol. 2, 3rd ed., reprint 1993), the meaning of punishment is given as, "infliction of a penalty in retribution for an offence; penalty imposed to ensure application and enforcement of a law." Going by Black's Law Dictionary (8th ed.) it is, "a sanctionsuch as a fine, penalty, confinement, or loss of property, right or privilegeassessed against a person who has violated the law." According to Jowitts Dictionary of English Law Vol. 2 (2....
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....e proceeded against whether it be under Section 50 or under Section 56 of the Act. The fact that a fine alone can be imposed on a company in a prosecution under Section 56 of the Act, cannot enable us to confine the operation of Section 68 to criminal prosecutions alone under the Act. We see no reason to whittle down the scope of Section 68 of the Act. 30. It is true that the entire penalty that may be imposed on adjudication, is capable of being recovered from the company itself. But that does not mean that it cannot be recovered from the officer incharge of the company or those who connived at or were instrumental in the contravention of the provisions of the Act by the company. Once the ingredient of the offence is contravention of the provisions of the Act and the consequences flowing from the contravention is to make that person including a company liable for penalty as well as for prosecution, there does not appear to be any justification in confining the scope of the Section 68 only to prosecutions under Section 56 of the Act. We have earlier indicated that use of the expression 'offence' in the marginal heading of Section 68 is not indicative of the express....
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....uthorities to impose a penalty on the firm and its partners separately. 81. A contention is urged on behalf of the appellant that the decision in Standard Chartered Bank (supra ) was rendered in the context of the FERA 1973, in which the scheme of the Act was not the same as in the Customs Act. It is further urged that the provision Section 140 of the Act which pertains to Offences by Companies falls in a separate Chapter namely Chapter XVI of the Act which is a chapter dealing with offences and penalties, whereas section 112 falls under Chapter XIV of the Act which pertains to "Confiscation of goods and conveyances and imposition of penalties" and thus the decision of the Supreme Court in Standard Chartered Bank cannot apply in interpreting Section 112(a) of the Act so as to apply the deeming provisions as contained in Section 140 of the Act. This contention is not well founded, for the reason that, what the Supreme Court has held in Standard Chartered Bank [though not referring to the decision in M/s. Agarwal Trading Corporation (supra)] is similar to what was held in Agarwal Trading Corporation (supra), which is clear in the Supreme Court confirming similar findings of the Di....
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....legislative intent is obviously to treat the firm and its partners separately for the purpose of considering the levy of penalty. Section 3(42) of the General Clauses Act gives the firm a legal status. A firm being given such a legal status is well recognized. (See: "Dena Bank v. Bhikhabhai Prabhudas Parekh & Co., (2000) 5 SCC 694.") 84. As regards the use of the words "abets the doing or omission of such an act" as appearing in the second part of Section 112(a), the language of this part of the provision makes it clear that the intention is to bring within its ambit the acts of those persons which are distinct from the principal acts falling under the previous part of the said provision. In other words, the word "abets" would mean the acts and omissions of those persons who would be principals of the second degree. The word "abets" cannot be construed to mean that the 'principal persons' who by their acts and omissions have rendered the goods liable for confiscation under Section 111 of the Act can be considered as abettors as well, so as to fall in the second part of Section 112(a) of the Customs Act. This is for the reason that persons can either be persons principall....
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....ealing goods, the mere fact that the master or the owners of the vessel were not shown to have been privy to such alternation etc. would not be sufficient to exclude the operation of Section 52A. The Supreme Court observed thus: "22. On the other hand, the scheme of S.67 supports the contention of the Additional SolicitorGeneral that if we read S.52A along with S.167(12A), it would be clear that the legislature intends, by necessary implication, the exclusion of mens rea in dealing with the contravention of s. 52A. Section 167(12A) provides that if a vessel constructed, adapted, altered or fitted for the purpose of concealing goods under s. 52A, enters or is within the limits of any port in India or within the Indian Customs waters such vessel shall be liable to confiscation and the master of such vessel shall be liable to a penalty not exceeding Rs. 1,000. It would be noticed that in column 1, s. 167(12A) reproduces the material words of s. 52A and does not add the words "knowingly or wilfully". It is significant that the words "knowingly or wilfully" are used in several other provisions contained in s. 167. Section 167(14) and s. 167 (61) use the word "wilfully" in respe....
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....it making, undertakes this activity. That is why S.52A makes an absolute prohibition against the entry of a vessel which contains, inter alia any alteration made for the purpose of concealing goods. Entry of contraband gold with the help of ships has thus become a serious problem and is intended to be checked by this absolute prohibition. If it was held that the knowledge of the owners of the offending vessel or of its master should be proved before S.52A is held to be contravened, in a majority of cases, the offending vessels will escape punishment. It is not difficult to imagine that mens rea or guilty mind could rarely be established against the owners of vessels which are traveling on the Highseas and it may not be always easy to prove the guilty knowledge even of the master of the ship. If the guilty mind is made an essential constituent of the section, it would be very easy both for the owners and the master of the ship to plead that the alleged alteration, adaptation or fitting was made without their knowledge and even contrary to their instructions. It is not difficult to realise in this connection that it would be almost impossible for the customs authorities to establish ....
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....r penalties for offences under the Act for which no express provision has been made elsewhere and seeks to lay down uniform penalty for all or any of the offences committed under the Act. The offences under the Act consist of contravention of (1) any provision of the Act; (2) any rules framed thereunder; and (3) any order in writing made thereunder. It comprises both acts of omission and commission. The persons punishable under the section are occupiers and managers, irrespective of the question as to who the actual offender is. The provision, is in consonance with the scheme of the Act to reach out to those who have the ultimate control over the affairs of the factory to see that the requirements for safety and welfare of the employees are fully and properly carried out besides carrying out various duties and obligations under the Act. Section 92 contemplates a joint liability of the occupier and the manager for any offence committed irrespective of the fact as to who is directly responsible for the offence. The fact that the notified/identified director is ignorant about the 'management' of the factory which has been entrusted to a manager or some other employee and is hi....
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....ingredient. The omission or commission of the statutory breach is itself the offence. Similar type of offences based on the principle of strict liability, which means liability without fault or mens rea, exist in many statutes relating to economic crimes as well as in laws concerning the industry, food adulteration, prevention of pollution etc. in India and abroad. "Absolute offences" are not criminal offences in any real sense but acts which are prohibited in the interest of welfare of the public and the prohibition is backed by sanction of penalty. Such offences are generally known as public welfare offences. A sevenJudge Bench of this Court in R.S. Joshi v. Ajit Mills Ltd. [(1977) 4 SCC 98: 1977 SCC (Tax) 536: AIR 1977 SC 2279] observed: (AIR p. 2287: SCC p. 110, para 19) "Even here we may reject the notion that a penalty or a punishment cannot be cast in the form of an absolute or nofault liability but must be preceded by mens rea. The classical view that 'no mens rea, no crime' has long ago been eroded and several laws in India and abroad, especially regarding economic crimes and departmental penalties, have created severe punishments even where the offences h....
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....ge of petitioner no.1, the fact that they arrived in India by the vessel from a place outside, stamp upon the goods the character of imported goods. This is so even though the person or persons responsible for the importation was or were other than the petitioners. If the goods were imported goods as I hold they were then their inclusion in the import manifest was obligatory on the part of the Master of the vessel, regard being had to the plain language of Section 30 of Customs Act which does not make any exception for any kind of I mported goods even though unknowingly carried or brought to India. But then the question arises as to how can a Master of a vessel include in the manifest, goods about the existence of which he had no knowledge and which were so cleverly secreted by smugglers that it required the full ingenuity of the rummaging department of the Customs to discover them. To hold that because of this difficulty, the failure to include the imported goods in the Manifest would not attract the mischief of Section 30 read with sections 111 and 112 may be to resign oneself to clandestine importation of huge quantity of prohibited goods in India which the Government of India w....
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....llowing effect: "In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant to the subject or context ................." Although, therefore, the definition contained in section 107, Indian Penal Code, will be applicable, it is necessary to find out as to whether there is anything repugnant in the subject or context. Section 5 of the Act of 1947 by itself makes no reference to mens rea. Abetment of the contravention of the Order is coupled together with contravention itself in the same provision. It must, therefore, be treated as standing on the same footing. In our view, therefore, the offence of abetment also would not require any kind of mens rea." 89. It is thus clear from the principles of law as enunciated in the above decisions of the Supreme Court, it would not be appropriate to read that only when the partners knowingly do certain acts or omissions or when only they have the prior knowledge, that their acts amount to contravention of the provisions of Section 111 of the Act which would lead to confiscation of goods, only in that case they can be held liable for penalty under Section ....
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....omission which renders the goods liable to confiscation, and at the same time to find the partners thereof guilty of abetment in the doing or omission of such act. It seems possible again to find the legal entity of a partnership liable for the act or contravention, and at the same time to hold the human agency through which it acts, also responsible for the same." 91. As regards the issue of application of Section 135(i)(a) of the Act to adjudication proceedings under Section 112(a) of the Act and more particularly to the partnership firm and its partners, pertinently, neither of the parties have urged that Section 135 can be read while applying Section 112(a) of the Act. Moreover as noted in paragraph 47(viii) above, the Appellants have urged to the contrary. I am of the opinion that the legislature in its wisdom has worded Section 112(a) to include the firm and its partners as persons who would be liable for penalty to be levied, depending on the facts of the case. As noted above a conjoint reading of the provisions as contained in Chapter XIV shows that simultaneous penalty can be imposed on the firm and its partners, where the authorities on materials available to them are ....