AI Drafter 
TaxTMI 
TaxTMI 
2024 (3) TMI 360
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....rs under Sections 112(a) and 114(AA) of the Act. 1.1 The main issue in the present case relates to country of origin of goods. The case of the department is that the Appellant herein had mis-declared the country of origin (herein after referred to as COO) of goods as Zambia instead of Iran. It is relevant to note that the present proceedings have no duty implication as the Appellant admittedly never intended to avail any duty benefit basis the country of origin certificates (herein after referred to as COO certificates) and have paid duty at proper value determined on the basis of LME price prevalent on the date of assessment. 1.2 The brief facts of the case are that the Appellant during the Normal course of business had raised Purchase Order on NBJ International FZ-LLC, Dubai, UAE (herein after referred to as the supplier) for supply of Copper Cathode on CFR, Nhava Sheva. Accordingly, it was the duty of the supplier to supply the goods to the Buyer (Appellant) at the destination port viz., Nhava Sheva. 1.3 Four Bills of Entry were filed by the Appellant on the basis of documents provided by the supplier which included COO Certificates showing goods to be of Zambian Origin....
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..... Ltd, statement dated 19.04.2022. 1.8 Subsequently, goods were seized and a Provisional order was passed by the department which was challenged before this Tribunal. This Tribunal vide order dated 27.06.2022 permitted clearance of goods, on Appellant furnishing a bank guarantee of Rs. 1,00,00,000/-. 1.9 Pursuant to the aforesaid order, the Customs Department released the goods provisionally. Thereafter, a Show Cause Notice (referred to as SCN) dated 04.01.2023 was issued calling upon the Appellant and its directors to show cause as to why - a) 1497.83 MTs of Copper Cathode conforming to LME Grade A having assessable value Rs. 110,41,45,320 imported under Bills of Entry No. 7078318, 7078308, 7078197 and 7078275 all dated 14.01.2022 should not be confiscated under Section 111(d) and 111(m) of Customs Act, 1962; b) Penalty should not be imposed in terms of Section 112(a) of Customs Act, 1962; c) Penalty should not be imposed in terms of Section 114AA of Customs Act, 1962 1.10 The SCN was issued on the following allegations: (i) The Appellants have mis-declared country of origin of goods as Zambia in Bills of Entry; (ii) The Appell....
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....ed 25.10.2023 (referred to as the Impugned Order), the Commissioner (Appeals) rejected the contentions and submissions made by the Appellant as well the Directors and concurred with the findings of the Adjudicating Authority made in the Order-in-Original. 1.14 The present Appeals have been filed against the impugned order. 2. We have heard and considered the oral arguments made during the hearing and written submissions filed post hearing. During the hearing the Shri Jitendra Motwani, learned counsel for the Appellant has filed a synopsis of arguments challenging the impugned order. The Synopsis of arguments are reproduced below for sake of clarity: • The entire case of the Department which has been confirmed by the Commissioner (Appeals) is that the Appellant has mis-declared the COO of the imported goods as Zambia instead of Iran and registration obtained under NFMIMS basis the said document is incorrect and therefore, the goods are liable for confiscation. To confirm the allegation of goods being imported from Iran instead of Zambia, the Commissioner (Appeals) has erroneously held that the COO certificates furnished by the Appellants were fake/forged and the s....
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....anner conclude that the goods have originated in Iran. • Mr. Jane, the authorized representative of M/s SGS India Pvt. Ltd., could not have commented on the manufacturer of goods, as the said company is solely dealing with inspection of goods and in any event he was not directly working for the inspecting agency viz., SGS Iran; • That the department has not even made an attempt to reach out to the Zambian Authority to check on the authenticity of COO certificates. The COO certificates being properly stamped and signed cannot be overlooked and or brushed aside by the customs department without any evidence of same being not authentic and unless the same is cancelled or the same is proclaimed as fake by the issuing authority; the department cannot go beyond the said COOs as held by Hon'ble Supreme Court in the case of Zuari Industries Vs Commissioner of Customs 2007 (210) E.L.T. 648 (S.C.); • The letter dated 26.05.2022 issued by the DRI to Commissioner of Customs, Nhava Sheva does not pertain to COO certificates pertaining to bills of entry assessed under impugned order. In any event while the said letter mentions about some overseas enquires w....
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....ted in Iran whereas in cases cited the department had produced evidence to prove their claim. To the contrary in the present case the department has not even attempted to examine important factors like reaching out to Zambian Authorities and Parties from Iran; • There is no dispute that the Appellant has made payment to their foreign supplier in Dubai and not to any party in Iran. Furthermore, there was no contract between Appellant and any party in Iran including National Iranian Industries Co. or Coppernium International FZE. The Appellant had entered into a contract with the supplier NBJ International, Dubai and it is not even the case of the Department in SCN or in any of the orders passed by authorities below, that Appellant was dealing with either National Iranian Industries Co or Coppernium International FZE or was aware of their existence. Hence, the finding that the Appellants knowingly submitted forged COO certificates is without any basis and based on presumption and assumption. • It is submitted that none of the activities viz., switching of BL, inspection of goods was done at the behest or within the knowledge of the Appellant. The said activi....
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....llants for multiple reasons. The Appellant had not claimed any duty benefit based on COO certificates and hence there was no loss to the Revenue. The Appellant made declarations in the Bills of Entry based on COO certificates which was issued and stamped by competent authority in Zambia, which notably, has not been cancelled till date. The NFMIMS registration is required to regulate the import of copper and it is not country specific. Hence, providing wrong COO certificates does not have any bearing on the said registration, especially when the competent authority i.e. DGFT had not cancelled the said registration till date. Further there is no prohibition for import of goods from Iran as has been accepted by the commissioner (Appeals) himself and as held by Bombay High court in Global Ace Shipping Lines Inc [Writ Petition (L) No. 5118 of 2020] • That the Appellant declared the country of origin based on documents supplied by the foreign supplier. It is settled law that charge of mis-declaration cannot be sustained against the importer when Bills of Entry were filed based on documents received from foreign suppliers. • No documentary proof whatsoever has be....
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.... concerned, there is no evidence of his wilful knowledge and or involvement in the alleged mis-declaration and as such no penalty can be imposed upon him as well. 2.1 Two compilations, viz., one of various provisions and judgements (marked as "Compilation Volume 1") and another consisting of statements of a) Mr. Vishal Amlani; b) Satish Amlani; c) Mr. Dhiraj Kumar Jane d) Mr. Amol Pongde, letter issued by DRI dated 03.11.2022 and legible copy of SCN (marked as "Compilation Volume 2") was furnished. 3. Shir S S Vikal, the departmental authorised representative reiterated the findings of the impugned Order-in-Appeal. 4. The entire issue in this appeal relates to alleged mis-declaration of Country of Origin of copper cathodes imported by the Appellant. As recorded above there is no duty implication in the matter inasmuch as the Appellant has never intended to avail any duty benefit basis the COO certificates in dispute. The relevant para of the show cause is reproduced below for sake of clarity: "6.1 As per discussion made in the foregoing paras and documentary evidences on records, it is noticed that M/s. Amglo Resources Private L....
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....othing has been placed on record showing any undervaluation of goods. While the department has submitted before the Commissioner (Appeals) that the issue of valuation is under investigation, however what cannot be ignored is that the goods imported are copper cathodes and the value of the same is determined basis the LME price. Also the provisional release order dated 06.04.2022 and the seizure memo dated 02.02.2022 is totally silent on the aspect of undervaluation. The seizure memo in fact gives the complete history of the matter but does not contain any allegation about the undervaluation of goods. Given the above it is submitted that the condition to furnish BG of 15% of value is extremely onerous, more so when the Appellant has shown his will to deposit entire amount of duty on value declared by it." 30 to 34 ....... 35. Apart from the same, the appellant herein has always been willing to pay the entire duty amount of around Rs. 25 crores at the time of clearance of the goods, which was not the case in Hazel Mercantile case (supra) as in the case of Hazel no duty was payable on export goods. Also, it is an undisputed fact that the department has alleged mis-de....
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....of December 2021 the same led the department to suspect that the Appellant had submitted fake/forged COO certificates by mentioning the COO as Zambia. Further tracking of the containers mentioned in the Bills of Entry indicated that the same arrived at Jabel Ali Port (UAE) by Vessel Virgo on 04.01.2022 and transhipped by Vessel X-Press Euphrates on 06.01.2022 for journey to Jawaharlal Nehru Port Trust. 4.5 Investigation led to the department summoning Mr. Jane, authorised representative of M/s. SGS Inspection & Survey and Inspection, India. His statement was recorded on 30.03.2022 during which he deposed that the seals that were cut from the containers were of SGS group of companies and the seal numbers were matching with the inspection certificate issued by SGS Iran. He further deposed that Bill of Lading No. ATSBNDTUM2112412 of Asian Tiger Shipping LLC was submitted wherein the consignor was mentioned as National Iranian Copper Industries Company and consignee was mentioned as M/s. Coppernium International FZE UAE and the inspection of the goods were carried out by SGS Iran on directions of M/s. Sanaye Va Maaden Mes Kerman Zamin at Bunder Abbas Port, Iran. Basis the same, the ....
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....communication was made with the Zambian Authorities to check the authenticity of COO certificates, reliance has been placed on letter dated 26.05.2022 issued by DRI. On perusing the said letter we note that the same has been addressed to Commissioner of Customs (NS V), Nhava Sheva, Maharashtra with respect to COO No. No. ZM/N/2741 dated 03.11.2022. The said letter has been issued in response to office letter of Nhava Sheva Commissionerate dated 19.04.022 and the same reads as under: "2. In this regard overseas enquiries as sought were conducted and it is learnt from the Zambia Revenue Authorities that the Country of Origin Certificate bearing Ref. No. ZM/N/2741 is not authentic. 4.9 Basis the above evidence the Commissioner (Appeals) vide impugned order has confiscated the goods and imposed redemption fine on the Appellant. Penalties have been imposed on the Appellant and the two directors under both section 112(a) and 114(AA) of the Act. 4.10 It is the case of the Appellant that the evidence relied upon by the department does not remotely show that the goods had originated from Iran. Having submitted proper COO certificates stamped by Zambia Revenue Authorities, the....
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....ated/forged documents including the country of origin certificate to show that the impugned goods originated from Zambia against the true country of origin i.e. Iran." 4.13 It is clear from the aforesaid that the department has alleged that: e) fabrication of documents was done by the importer in connivance with the foreign supplier/exporter to suppress the fact of goods being of Iranian origin. f) the importer connived with the different entities abroad like the exporter, Shipping Line/Agent to create whole bunch of manipulated/forged documents including the country of origin certificate to show that the impugned goods originated from Zambia against the true country of origin i.e. Iran. 4.14 Whether there is any evidence to back and support the above allegations made in the show cause notice will have to be looked into by us. a) Supreme Court in the case of Gokuldas Exports (supra) has held that "A party which asserts a fact has to establish it. In this case it was the plaintiff who asserted that second revalidation was permissible. It was for the plaintiff to establish it." b) Similarly, Hon'ble Bombay High Court in the case of Phoenix Mi....
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....and onus of proof. The burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. Onus means the duty of adducing evidence. Assuming that onus, has shifted on the petitioner, then, the evidence produced by the petitioners has substantially established the link between the material supplied and used by the petitioners. 4.15 Given the above settled proposition of law it is clear that since the allegation of COO certificates being forged/fake and further Appellant and its directors having connived in the same is made by the department the burden to the prove the above is solely on them and cannot be shifted on the Appellant unless cogent evidence is produced in support of the said claim. It is the case of the department that the goods imported by the Appellant did not originate in Zambia as declared but were from Iran. The Appellant on the other hand had submitted COO certificates which are stamped by Zambia Revenue Authority, Tanzania Customs, Lusaka Customs Port, Customs Service Division and Tanzania Revenue Authority. Nothing stopped the department from reaching out to the issuing authority viz., Zambia revenue authority throu....
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....thentic. If there was any written communication from Zambian Authorities the letter issuing authority, would have provided the same as a supporting to letter dated 26.05.2022. We are of the view that the letter issuing officer was duty bound to provide proper details/documents on the basis of which COO certificate issued by an independent authority of contracting state has been labelled as not authentic. Mere statement or casually written documents without corroborative and supporting documents cannot be the basis to label a document issued by an independent foreign authority non authentic. Further we find merits in the arguments of the Appellant that the said communication in any event relates to COO No. ZM/N/2741 dated 03.11.2022 whereas the COO certificates involved in the present case were No.ZM/N/2742, No. ZM/N/2743, No. ZM/N/2744 and No. ZM/N/2745 all dated 8.11.2022. The reasoning adopted in the impugned order in Para 8.3 to the effect that since all 80 containers originated from the same source of country on a single Bill of lading which were subsequently split into 4 bills of lading would be enough to show that if one COO certificate is found fake the others would also be ....
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....te and on perusal of the show cause notice issued by SIIB (Imports) Nhava Sheva, submitted during the hearing, we note that the said communication though addressed to them has not been relied upon in the show cause notice issued by Nhava Sheva Commissionerate. In any event as mentioned above we find merits in the submission of the Appellant that the said letter does not provide any details on nature of enquiry conducted or supporting documents received from Zambian Authorities on the basis of which the DRI has purportedly learnt and formed an opinion the COO certificate mentioned in the letter was not authentic. For the aforesaid reasons we are of the view that the said letter cannot be the basis to hold that the COO certificates impugned in the present case were not authentic. 4.17 Coming back the allegations made in para 6.6.2 of the show cause notice, the department has alleged that the importer connived with the different entities abroad like the exporter, Shipping Line/Agent to create whole bunch of manipulated/forged documents including the country of origin certificate to show that the impugned goods originated from Zambia against the true country of origin i.e. Iran. Com....
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....stablished. Further can country of origin of goods be rejected merely due existence of another Bill of Lading especially when the same is between other parties is another issue that has not been addressed by the Commissioner (Appeals) or the Adjudicating authority. The Department to prove the same ought to have investigated the said parties or established a link between them and the Appellant. On the contrary we note that there is no evidence to even remotely suggest that the Appellant knew either "National Iranian Industries Co." or "Coppernium International FZE" "Asian Tiger Shipping LLC". From the show cause notice and the statements of witnesses, it is clear that the department has not even alleged that the Appellant knew about the said purported trade or was a party to it. No documentary evidence has been produced to suggest otherwise. In view of the aforesaid, we are of the view that the finding of the Commisisoner (Appeals) in relation to manipulation of bill of lading and or connivance of the Appellant for the same deserves to be set aside being unsupported by any evidence. 4.20 The Appellant in fact has been contending right from the adjudication stage that it had no co....
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....e to support the said statement. Infact we are at loss of words to understand how a person working in India can opine on origination of goods in a third country basis an inspection report. The Commissioner (Appeals) in our view ought to have appreciated that mere inspection of goods in Iran does not in any manner mean that the goods have originated in Iran. If the said argument of department is accepted, it will be open for the importers to seek origination of goods on the basis of getting the same inspect in a country of their choice. This will be totally contrary to the provisions of FTAs and Rules of origin between India and various countries. The Inspection of goods, in our view is a contractual issue and the same can be done as per contractual arrangement between parties. In the present case the inspection was done with respect to the first leg of transaction between Iran and UAE, to which neither the supplier was a party nor the Appellant. Most importantly the inspection report that is purported to have been submitted by Mr. Jane during the recording of his statement has not been made a part of RUDs. We are unable to understand the reason for which the said document has not b....
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.... including National Iranian Industries Co. or Coppernium International FZE. The Appellant had entered into a contract with NBJ International, Dubai and it is not even the case of the Department in SCN or in orders passed by authorities below that Appellant was dealing with either National Iranian Industries Co or Coppernium International FZE or was aware of their existence. 4.24 We further note that the department has placed reliance on statement of Mr. Pongde wherein he has stated that that letters of Coppernium International and NBJ International (the supplier in the present case) appear to have the same signature. Like the statement of Mr. Jane here also we note that the said letters seeking switching of BL filed by Coppernium International and NBJ International (the supplier in the present case) which purportedly have the same signatures are not a part of RUDs of SCN. Accordingly, there is no way for us to test if the statement of Mr. Pongde on signatures being same be taken as true. Further we agree with the submission of the Appellant that Mr. Pongde was not a forensic or handwriting expert, and the said letter was not sent for signature testing by the department. Accordin....
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....ce reliance on statements of person who worked in India and had no direct connection with inspection of goods or shipping of goods from Iran to UAE. If that was not enough the department has chosen not to make the documents submitted by the witness as RUDs so as to enable the Appellant to counter the same. The Commissioner (Appeals) instead of applying his independent mind to the submissions of the Appellant has chosen to reproduce and agree with the findings of the Adjudicating authority which is not permissible in law. Case laws of this Tribunal which were otherwise binding on the department have not been considered. Accordingly, we hold that the findings of the Commissioner (Appeals) that the COO Certificates were bogus or fake and that the goods have originated from Iran and not Zambia, is incorrect and has been given by non-appreciation or mis interpretation of statements and /or document/submissions of the Appellant. 4.29 One of the arguments of the Appellant is that the entire basis on which the SCN has been issued viz: quality control stickers of December 2021 being incorrect and/or inconclusive to prove origination of goods has not been dealt with by the authorities bel....
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....e goods originated from Iran and not Zambia and hence the burden of proof cannot be shifted to Appellant as has been held by us above. If the stand of the department is accepted the same will lead to an assessee being made to prove allegations made by department on assumptions and presumptions. The same is contrary to the general principles of law and cannot be accepted. 4.30 We also note the reliance placed by the Commissioner (Appeals) on Section 46 (4A) of the Act to hold that the burden to prove that the goods originated from Zambia is on the Appellant and they failed to discharge the said burden. The said Section is reproduced below for sake of clarity: SECTION 46. Entry of goods on importation. - [(4A) The importer who presents a bill of entry shall ensure the following, namely:- (a) the accuracy and completeness of the information given therein; (b) the authenticity and validity of any document supporting it; and (c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force.] 4.31 We don't see how the above Section can be relied upon to shi....
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.... and Commissioner v. Ballarpur Industries Ltd. - 2007 (215) E.L.T. 489 (S.C.). In any event the explanation provided by the Appellant through Mr. Satish Malani that since the Appellant never intended to avail any benefit basis the said COO certificates, they did not check the contents appears to be plausible to us. 4.32 In view of the finding recorded by us above we are of the considered view that the Commissioner (Appeals) has erred in holding that basis the evidence relied upon in the show cause notice, the department has proved that the country of origin of goods was mis-declared and the same had originated in Iran instead of Zambia. The finding of the Commissioner (Appeals) on manipulation of import documents or connivance on the part of the Appellant, being unsubstantiated also is erroneous. On the contrary as held by us above, the department has failed to produce a single document or evidence to remotely support their case of mis-declaration of country of origin. As recorded by us above, the investigating authority instead of reaching out Zambian authorities and Iran entities have chosen to rely upon statements of witnesses who were not competent to depose on origin of goo....
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....mport-II), New Custom House, Mumbai, on identical issue of addition of freight for computation of assessable value and confiscation for misdeclaration of country of origin, are disposed of by these common proceedings. The adjudicating authority proceeded on the finding that the cargo, covered by import general manifest no. 224501/23.01.2020 of MT Braveworth filed for discharge at Mumbai and purportedly taken on board at Sohar in Oman during the voyage out of Fujairah in UAE from 9th January 2020, was, in fact, loaded during clandestine call at Dayyer in Iran between 15th January 2020 and 18th January 2020, and cargo, covered by Import General Manifest No. 2244928/22.01.2020 of MT Chem Trader filed for discharge at Mumbai and purportedly taken on board at Jebel Ali on 16th January 2020 was, in fact, loaded during clandestine call at Bamder Imam Khomeini in Iran between 12th January 2020 and 14th January 2020. .......... 8. The first issue that comes up relates to the place of origin. There is no contention on the part of customs authorities that appellants had insisted upon sourcing from Iran or that they had any commercial engagements with suppliers in Iran that w....
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....r its directors. From the facts on record, it is clear that the most suitable option viz., to reach out or investigate the matter through official channel has not been explored by the department. Instead, the department has tried to corroborate their case by relying upon evidence in the form of statement of witnesses who had no competence to depose on origination of goods. The said action is contrary to the settled law that charge of mis-declaration cannot be confirmed solely on the basis of statements. In the present case we have in any event held that the said statements do not prove anything against the Appellant. Further placing reliance on the inspection/quality check date to dispute the correctness of country of origin of goods and taking the place of inspection of goods as place of origination of goods itself is faulty as mere inspection of goods in Iran cannot establish that the goods have originated from Iran. We find force in argument of the Appellant that the possibility of goods having originated in Zambia and then being transhipped through Iran before reaching Dubai cannot be ruled out. The inspection of goods in Iran cannot establish that the goods originated from Ira....
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....ant and more importantly the Appellant never had any intention to avail any benefit basis the COO certificates. Accordingly, the ratio of aforesaid decision which appears to have been accepted by the revenue will apply to the present case as well. On the above ground as well the impugned order passed by the Commissioner (appeals) deserves to be quashed and set aside and we have no hesitation in doing so. 4.39 Having held the above, we note that the authorities below have imposed heavy redemption fine and penalties on the Appellant and directors both under Section 112(a) and 114AA of the Act. The Appellants have argued that the documents filed by them were supplied by the supplier and they had no role in issuance of the COO certificates. It is further submitted that no benefit was ever availed on the basis of the said certificates and also no evidence has been placed on record to show their involvement in any manner. Accordingly, as a without prejudice argument the Appellant have prayed that redemption fine and penalty cannot be imposed. In any event the quantum of redemption fine and penalty has been challenged too. 4.40 The Commissioner (Appeals) in the present case has held....
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....nly those goods is restricted from Iran which feature in the aforementioned documents. These documents deal with nuclear material, equipment, and technologies. It is not the case of the department that Cooper Cathode is used in any of such material, equipment or technology. Further we note that no notification has been issued by the Central Government under Section 11 of the Act restricting imports from Iran. Accordingly copper cathodes imported by the Appellant are not prohibited goods and are freely importable. Further DGFT vide Notification No. 61/2015-20 dated 31.03.2021 have notified certain goods which are required to be registered under NFMIMS. Since goods imported by the Appellant are falling under the said Notification, the Appellant has duly obtained registration as required. On perusing the said Notification of DGFT, we note that the same is product specific and not country specific inasmuch as registration is required to be obtained basis the product that is imported irrespective of country of origination or country of import. Accordingly, submission of the Appellant that even if it is assumed that the goods were imported by them from Iran, the same will not have any be....
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....scope of show cause notice. The show cause in Para 9.2 proposes confiscation under 111(m)on the ground that "the importer by deliberately mis-declaring the country of Origin of the goods imported in the import documents like Bills of Entry, COO, Invoice, etc have rendered the goods liable for confiscation", whereas in the impugned order the charge of 111(m) stands confirmed on the ground that the Appellant failed to verify the authenticity of the COO certificates and said act coupled with the act of submitting incomplete documents have rendered the goods liable for confiscation under 111(m). The said finding being beyond the show cause notice deserves to be quashed and set aside on this ground as well. Even otherwise the charge in show cause cannot sustain as the department has not been able to show any document or produce any evidence on the basis of which it can be held that the Appellant was aware about the COO certificates was fake or had deliberately used the same. 4.45 We are in agreement with the submission of the Appellant that declaration made by them while filing import documents was basis the documents submitted by the supplier. There is no evidence to the contrary. I....
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....its 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" Section 114AA Penalty for use of false and incorrect material.-If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.] It is clear from the above that penalty under 112(a) of the Act is imposable on persons 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. Similarly, penalty under Section 114AA of the Act is imposable on person who knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect. 4.49 We have noted above that the department has failed to discharge the burden cast upon it to conclusively pro....
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....ciple in all matters. In cases where there is absolutely no involvement of assessee and where there is no evidence produced to show their role in the alleged fraud/mis-declaration, then imposition of penalty in our view will amount to injustice as far as the assessee is concerned. Penalty generally is imposed as a penal consequence of a person enjoying benefits of a thing which it is not entitled to or the said benefits are obtained by him due to fraud or mis representation. Hon'ble Supreme Court in Akbar Badruddin Jiwani vs Collector of Customs reported as 1990 (47) ELT 161 (S.C.). has held that mens rea is to be established even in case for imposition of penalty under section 112 (a) of the Act. Similarly in Commissioner v/s Trinetra Impex Pvt. Ltd. reported as 2020 (372) E.L.T. 332 (Del.), the Hon'ble Delhi High Court held that while mens rea for imposition of penalty under Section 112 (a) of the Act is not a condition precedent, however, said ingredient is necessary for imposition of penalty under the said section. 4.52 In Extrusions Vs. Collector of Customs reported as 1994 (70) ELT 52 the Hon'ble Kolkata High court has held as under: "30. In P. Ripakkumar and Comp....
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....on it is not always necessary to impose a fine in lieu of confiscation, in the same way, as merely because a penalty is imposable under a provision, it is not necessary that it must always be imposed. The facts and circumstances of the case as a whole have to be borne in mind and it has to be ensured that absurd situations unintended by law do not result. There are innumerable cases in which goods are released on caution or warning when some technical violation or breach of provision is noticed and imposition of fine or penalty is not warranted. Both in cases of fine and penalty, it is the non-observance of law by the person concerned which is required to be established in the first instance. In our view, the principles laid down by the Supreme Court in Hindustan Steel Ltd. (Supra) have to be kept in mind and duly applied, mutatis mutandis, in cases of confiscation of goods and imposition of redemption fine as well. In the instant case, however, the Tribunal fell in error in holding that the question of intention is irrelevant in deciding upon the confiscation and quantum of redemption fine. The instant case is a fit one where confiscation should not have been made having ....