TaxTMI 
TaxTMI 
2023 (7) TMI 218
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....s Broker within the meaning of Regulation 2(d) of the Customs Broker Licensing Regulations, 2018 (hereafter 'CBLR'). The appellant had filed the Bill of Entry for import of certain goods that were found to be liable for confiscation. The Adjudicating Authority had found that the goods imported were prohibited goods and were illegally imported. The Adjudicating Authority also found that the appellant was "aware of the things which led to irregular filing of the Bill of Entry for the illegal imports made" and by the order-in-original imposed a penalty equivalent to 25% of the maximum penalty leviable under Section 112 of the Customs Act. 4. Aggrieved by the order-in-original, the appellant preferred an appeal before the Tribunal. The Tribunal, after evaluating the facts, found that "no case of connivance is made out against the appellant/employee" and that at best, it appeared that the appellant had "unknowingly abetted or been instrumental in the nefarious activity of the import of the prohibited goods, by the actual importer- Mr. Ramesh Wadhera, and the lender of the IEC Code" The Tribunal also found that the penalty imposed under the order-in-original was high and disproportionat....
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.... statement of the appellant. He stated that he had been approached by one Sh. Deepak Kapoor, who was a common friend of the appellant and Sh. Narinder Narula (proprietor of GND Cargo Movers - the Customs Broker). He stated that Deepak Kapoor regularly introduced clients for customs clearance and had requested him to file documents for the clearance of goods imported by M/s Pixel Overseas. And, he had filed the Bill of Entry on the basis of the said information. The appellant acknowledged that the documents did not contain the PAN Card and the attested copy of the Importer-Exporter Code (IEC) of the importer (M/s Pixel Overseas) but stated that he was assured that the said documents could be arranged. The appellant stated that he was informed that an employee of the importer was on the way to bring the necessary documents. He claimed that he informed Sh Deepak Kapoor that further action such as steps for examination of goods would be undertaken by the customs authorities, only after the requisite documents were submitted. However, the employee of the importer, who was stated to be on the way with the PAN Card and the copy of the IEC, did not show up. 11. The statement of Sh. Deepak....
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.... 16. A Show Cause Notice dated 26.09.2013 was issued to various noticees including the importer (M/s Pixel Overseas - Noticee no.1), Sh. Izhar Siddiqui @ Khan (Noticee no.2), Sh. Ramesh Wadhera (Noticee no.3), Sh. Deepak Kapoor (Noticee no.4) and the appellant (Sh. Rajeev Khatri - Noticee no.5). 17. The Adjudicating Authority found that the goods had been mis-declared and that the import of gas cylinders and 'salaam mishri' were prohibited. Import of salaam mishri was not disclosed and the correct value of the goods were not disclosed. The description of the gas stoves was also not correct and their value as declared was not the correct value. The Adjudicating Authority held that the goods in question were liable for confiscation and assessed the value of the said goods at Rs. 1,36,56,080/- on the basis of the report prepared by the DRI. Apart from directing confiscation of the goods, the Adjudicating Authority, inter alia, imposed penalties on the noticees including a penalty of Rs. 34,14,020/- equivalent to 25% of the maximum penalty under Section 112(a) of the Customs Act, on the appellant. 18. The Adjudicating Authority faulted the appellant for filing the Bill of Entry witho....
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....e for confiscation, can be mulcted with penalty under Section 112(a) of the Customs Act for abetting such an offence. 23. In terms of Section 112(a) of the Customs Act, penalty for improper importation of goods is chargeable from any person specified in Clauses (a) and (b) of the said Section. For the purposes of the present controversy, Clause (a) of Section 112 of the Customs Act is relevant and is reproduced below: "112. Penalty for improper importation of goods, etc. Any person- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act" 24. It is clear from the above that Section 112(a) of the Customs Act includes two category of persons, who may be liable for fine. The first category of persons are those who, in relation to any goods, do or omit to do any act which renders the goods liable for confiscation under Section 111 of the Customs Act. The second category of persons comprises of those who abet the doing or omission of such acts. In the present case, penalty has been imposed on the appellant on the allegation that he had ab....
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....-66 and 1966-67." 28. In Gujarat Travancore Agency, Cochin v. Commissioner of Income Tax, Kerala, Ernakulam: (1989) 3 SCC 52, the Supreme Court had noted the aforesaid obligations and held that it is not necessary to establish an element of mens rea for imposing a penalty under Section 271(1)(a) of the Income Tax Act, 1961; that is, penalty leviable if the assessee without reasonable cause, fails to furnish the return of total income within the stipulated time. 29. In Indo-China Steam Navigation Co. Ltd v. Jasjit Singh, Additional Collector of Customs Calcutta & Ors.: AIR 1964 SC 1140, the Constitution Bench of the Supreme Court had rejected the contention that it was essential to establish mens rea in respect of levy of penalty under the Sea Customs Act, 1878 for violating the provision of Section 52A of the Sea Customs Act, 1878. 30. Thus, 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....
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.... Indian Penal Code, 1860 (hereafter 'the IPC'). 35. Section 107 of the IPC explains the meaning of the expression 'abetment of a thing'. The said Section of the IPC reads as under: "107. Abetment of a thing.-A person abets the doing of a thing, who- First.-Instigates any person to do that thing; or Secondly.-Engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that conspiracy, and in order to the doing of that thing; or Thirdly.-Intentionally aids, by any act or illegal omission, the doing of that thing. Explanation 1.-A person who, by wilful misrepresentation, or by wilful concealment of a material fact which he is bound to disclose, voluntarily causes or procures, or attempts to cause or procure, a thing to be done, is said to instigate the doing of that thing. Illustration A, a public officer, is authorised by a warrant from a Court of Justice to apprehend Z, B, knowing that fact and also that C is not Z, wilfully represents to A that C is Z, and thereby intentionally causes A to apprehend C. Here B abets by instigation the apprehension of C. Explanation 2.-Wh....
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....of the General Clauses Act, 1897. The court further opined as under: "31. .....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 half as even innocent facilitation provided by a person which has made possible the a....