TaxTMI 
TaxTMI 
2023 (3) TMI 1029
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.... April 18, 1985 of the Hon'ble Supreme Court in Union of India V. Rajanikant Brothers and imposition of redemption fine of Rs. 85 lakh and penalty of Rs. 15 Lakh. (ii) Whether the Tribunal below committed substantial error of law in holding that the question of mens rea was not relevant for adjudging the question of liability for confiscation of imported goods under Section 111 of the Customs Act, 1962 and imposition of penalty under Section 112 of the said Act. (iii) Whether and in any event, lack of mens rea is a relevant consideration in the matter of determining the quantum of redemption fine and penalty and the Tribunal was justified in law in upholding the redemption fine of Rs. 85 lakh and penalty of Rs. 15 lakh. 2. We have heard Mr. J.P. Khaitan, learned Senior Advocate assisted by Mr. Prithu Dudheria and Ms. Namrata Jha, learned Advocates for the appellant and Mr. Uday Shankar Bhattacharyya and Ms. Manasi Mukherjee, learned Advocates for the respondent. 3. The appellant filed two bills of entry, namely, (i) 2249.867 M/T Palm Fatty Acid distillate in bulk CIF Rs. 37,47,004.78/- and (ii) 1502.079 M/T Palm Acid Oil in bulk CIF Rs. 23,66,147.33/-. 4. The appellant sough....
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....ointed out that in the judgement of the Hon'ble Supreme Court in the Union of India Versus Godrej Soaps Pvt. Ltd. and Another 1986 (26) ELT 465 (SC), it has been observed that the goods in the said case which were purchased on 27th June, 1986 after the judgement of the Hon'ble Supreme Court in Raj Parkash Chemicals Limited Versus Union of India 1987 (30) ELT 45 (SC) and M/s Indo Afghan Chambers of Commerce and Anr. Versus Union of India 1986 (3) SCC 352 (SC), there cannot be any question of restitution of right. With this submission the appellant requested for release of the goods by pointing out that the contract for purchase of the goods was made on 17th March, 1986well before the date of the judgement of the Hon'ble Supreme Court dated 12thSeptember, 1986 (Godrej soaps). The adjudicating authority, the Collector of Customs, Calcutta held that though it may be true that there were decisions of the Hon'ble Supreme Court in M/s Indo Afghan Chambers of Commerce as well as the decision in the case of Union of India Versus Rajanikant Brothers the revised judgement of the Hon'ble Supreme Court dated 15th May, 1986 (M/s Indo Afghan Chambers of Commerce) was very much known to the appell....
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....et aside the order of the Collector of the Customs is by placing reliance on the judgement of the Hon'ble Supreme Court in B. Vijay Kumar & Co. Etc. Versus Collector of Central Excise 1991 (33) ECR 669 (SC) and there has been no separate decision or finding rendered by the Tribunal and the decision of the Tribunal is flawed as the Hon'ble Supreme Court in the said decision has held that the decision would not be a binding precedent and therefore, the Tribunal erred in treating the same to be binding. Accordingly, the order passed by the Tribunal was set aside to that extent and the matter was remanded for fresh hearing without taking note of the decision in B. Vijay Kumar & Co. On remand the Tribunal noted the facts of the case and pointed out that the question to be considered is whether the imported goods which are not covered by licence are liable for confiscation and whether the appellant /importer is liable for penalty. Referring to the decision of the Hon'ble Supreme Court in Pine Chemical Suppliers Versus Collector of Customs 1993 (67) ELT 25 (SC) the Tribunal held that mens rea is not relevant for holding that the goods are liable for confiscation and for imposition of pena....
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..... 6. One Raj Parkash Chemicals who were engaged in the manufacture of acrylic ester monomers at its factory in Maharashtra. In terms of the Import Export Policy, 1985-1986 import of acrylic ester monomers was not permissible ordinarily and the Government could permit import if considered, necessary and justified. Writ Petition was filed before the High Court of Bombay which was dismissed, affirmed by the Division Bench and the matter was carried on appeal to the Hon'ble Supreme Court. The Hon'ble Supreme Court in Raj Parkash Chemicals Limited Versus Union of India 1987 (30) ELT 45 (SC). By judgment dated 05.03.1986, it was held that acrylic ester monomers could not be imported under the said additional licenses. While considering the scope of the order passed by the Hon'ble Supreme Court dated 18.04.1985 in the case of Rajanikant Brothers it was observed as follows: 11. It is admitted between the parties in this appeal that the fundamental question for consideration is the true meaning and scope of the order dated April 18, 1985 made by this Court. There is no dispute that the diamond exporters enjoying the benefit of the order are entitled to the issue of Export House Certifica....
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....ent of India to the Port authorities stating that canalized items were not covered within the purview of the decision of the Hon'ble Supreme Court in the case of Raj Parkash and additional license holders would be allowed to import canalized items. Further the Principal Collector by letter dated 14.05.1986 addressed to the Chairman, Western Region, Federation of Indian Export Organisation also clarifies that clearances of canalized items against additional licenses was unconditionally allow. On 15.05.1986 in the case of M/s. Indo Afghan Chambers of Commerce, the Hon'ble Supreme Court held that dried fruits could not be imported under the said additional license. What is important to note is that in the said decision the issue was as to whether there was a restrain for importing dried fruits during the period 1985-1986 under additional licenses granted to the appellants therein under the Import Policy 1978-1979. The issue as to whether item was a canalized item or not was not subject matter of decision in M/s. Indo Afghan Chambers of Commerce as the facts were entirely different. The orders placed by the appellant with the supplier in Malaysia on 12th and 14th May, 1986 were shipped....
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....ing the special circumstances of the case and not to be treated as precedent, we can very well adopt the concept based on which the Hon'ble Supreme Court had granted relief to the appellant therein. This concept was whether the action of the importer bonafide. The bonafides of action in such cases have to be decided based on facts and there can be no universal formula to assess the bonafides in such cases. Yet another decision of the Hon'ble Supreme Court also would be of relevance which is in the case of Collector of Customs Versus M. Shashi Kant and Company 1992 (57) ELT 684 (SC) wherein the Hon'ble Supreme Court considered all the decisions but however the decision in the case of Navinchandra which have also considered all the decisions on the point, was not brought to the notice in the case of M. Shashi Kant. Be that as it may, we are convinced that the bonafides of the appellant has to be considered. Admittedly on the date when the orders were placed by the appellant for purchase of the products i.e. on 12th and 14th March, 1986 legal position was clearly in favour of the appellant. Added to that the clarifications issued by the Joint Chief Controller of Imports dated 17.03.1....
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....g acted on the basis of the bonafide belief that the goods were imported under OGL, deserves lenient treatment. In Hindustan Steel Limited Versus State of Orissa 1978 2 ELT 159 (SC), it was held that the discretion to impose penalty must be exercised judicially, penalty will ordinarily be imposed in cases where party acts deliberately in defiance of law or is guilty of contemptuous or dishonest conduct or acts in conscious disregard of its obligation but not in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from bonafide belief that the offender is not liable to act in the manner prescribed by the statute. Thus, bearing in mind the above legal principles and taking note of the facts which were set out above, we are of the view that the case on hand is a case where no penalty could have been imposed. 9. Coming back to the aspect as to whether the imposition of redemption fine of Rs. 80,00,000/- was justified we need to take note of two factors. Admittedly on the date when the goods arrived in the Calcutta Port and when the appellant sought for clearance of the said goods the decision in Godrej Soaps held the field and conseq....