TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1410
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....corded from the Appellant herein who was then the Chief Finance Officer of MBIL. On 16.10.2007, MBIL paid Rs.1,30,01,831/- towards the differential duty. Thereafter statements were also recorded on different dates from Shri. Himanshu Dhakad, Deputy Manager (Finance) of MBIL. The investigation culminated in issuance of a show cause notice, invoking the extended period of limitation and, inter-alia, alleging that MBIL had paid customs duty only on the value equivalent to the cost of the recorded media, without including the payment made towards licence fee/royalty fee to the overseas supplier in the assessable value. The Notice alleged that in view of the intentional suppression of the sums paid in addition to the declared value, MBIL and the appellant have rendered the imported recorded media and its contents, liable to confiscation and for their acts of omissions and commissions they have also rendered themselves liable for penalty under Section 112(a)/(b) of the Customs Act, 1962. The Notice called upon MBIL to pay the differential duty, alongwith applicable interest and proposed penalties on MBIL under the provisions of Section 114A, 112(a) and/or(b) of the Customs Act ibid. The ....
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....ation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111 and the second one being abets the doing or omission of such an act. Reliance was placed on the decision in Amritlakshmi Machine Works, Mr. N.K Bramchari, Managing Partner, M/s. Amritlakshmi Machine Works v. CC(Import)- Customs Appeal 100 & 1010 of 2012-Bombay High Court and Rajeev Khatri v. CC (Export), 2023 (7) TMI 218Delhi High Court in this regard. The Ld. Counsel prays that the appeal be allowed. 7. Ms. O.M. Reena, Ld. Authorised Representative appearing for the Respondent, reiterated the findings of the Ld. Adjudicating Authority. Ld. A.R emphasised that the Adjudicating Authority has categorically found that the appellant had abetted the company to evade the duty by not exercising due care and diligence while administering the accounts of the company. It is submitted that the penalty under Section 112(a) was therefore rightly imposed on the Appellant. 8. Heard the rival submissions, perused the appeal records as well as the citations submitted. 9. The solitary issue that arises for determination is whether the penalty imposed on the ....
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....ence to an accused is on the prosecution. Obviously the stress was on the essential ingredients which go to make up the offence. There cannot be a misconception or ambiguity with reference to the offence complained of because that would cast a cloud of doubt as to the essential ingredients and naturally the discharge of the burden of proof would be stifled. Proceedings should not be allowed to be prosecuted on vague basis and camouflaged hypothesis and prejudice must be presumed to have been caused to the accused in these circumstances. Clause (a) of S. 112 of the Act contemplates the doing of an act or omitting to do an act in relation to any goods, which act or omission would render such goods liable to confiscation under S. 111, or abetting the doing or omission of such an act. Clause (b) of S. 112 of the Act lays down that any person who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping or concealing, selling or purchasing, or is any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Sec. 111, shall be liable to penalty as per the clauses set out. S. 112(b) of the Ac....
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....bona fide error, which did not vitiate the jurisdiction of the Authority. As stated above, this is a case where there had been a failure to apply the mind as to which of the clauses is relevant and would be attracted. The power and the discretion given to the Authority functioning under S. 112 of the Act are judicial in character and are open to judicial review, and if they are found to have been exercised on irrational and ambiguous basis, the court will strike down the orders." (emphasis supplied) 13. Thus, it is evident that the Hon'ble High Court has, on a perusal of the facts of the said case, found that Section 112 was only referenced without the essential ingredients of Section 112 of the Customs Act, under clause (a) or (b) of Section 112 of the Customs Act being detailed. When the Court has said that there is a possibility of both the provisions being attracted, it found that merely referencing the section, without specifying its ingredients was fatal. Pertinently, the Court also pointed out that the said case was not a case where a wrong provision has been quoted, so that it can be stated that it was due to a bona fide error, which did not vitiate the jurisdiction o....
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....of 2021, decided on 4-72023, and reported as Rajeev Khatri v CC (Export), 2023 (7) TMI 218-DELHI HIGH COURT : (2023) 9 CENTAX 412 (Del). Therein, it was held by the Hon'ble Delhi High Court as under: "27. There is no cavil that mens rea is not a necessary element for imposing penalty under section 112(a) of the Customs Act. The penalty imposed for failure to perform a civil obligation is required to be distinguished from a penalty imposed as a punishment for committing a crime. Whereas in the latter case, it would be necessary to establish that a person committing the crime had the intent or the knowledge of committing such a crime; there is no such requirement in case of penalty for default in compliance of a statue imposing a civil obligation, unless the words of that statute indicate otherwise. The aforesaid proposition has been stated in Corpus Juris Secundum 1 in the following words: "A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws." "Accordingly, we hold that ....
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....Q.B.D. 534: the Court for Crowned Cases Reserved held as under: "To constitute an aider or abettor, some active steps must be taken, by word or action, with intent to instigate the principal or principals. Encouragement does not, or necessity, amount to aiding and abetting. It may be intentional or unintentional. A man may unwittingly encourage another in fact by his presence, by misinterpreted gestures, or by his silence or non-interference - or he may encourage intentionally by expressions, gestures, or actions, intended to signify approval. In the latter case, he aids and abets; in the former he does not. It is no criminal offence to stand by a mere passive spectator of a crime, even of a murder. Noninterference to prevent a crime is not itself a crime. But the fact that a person was voluntarily and purposely present witnessing the commission of a crime, and offered no opposition to it, though he might reasonably be expected to present it, and had the power so to do or at least to express his dissent, might, under some circumstances, afford cogent evidence upon which a jury would be justified in finding that he willfully encouraged, and so aided and abetted. But it woul....
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....betment provides to the extent material that a person abets the doing of a thing who "Intentionally aids, by any act or illegal omission, the doing of that thing". Explanation 2 to the section says that "whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act". Thus, in order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime. Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Section 107. A person may, for example, invite another casually or for a friendly purpose and that may facilitate the murder of the invitee. But unless the invitation was extended with intent to facilitate the commission of the murder, the person inviting cannot be said to have abetted the murder. It is not enough that an act on the part of the alleged abettor happens to facilitate the commission of the crime. Intentional aiding and therefore active complicity is the gist of the offe....
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....e (45 of 1860); 5. Majority opinion delivered by M.S. Sanklecha, J." (Emphasis supplied) 17. Bearing the observations in the above Judgement in mind, on an examination of the Appeal records what emerges is that in the instant case, neither the SCN nor the impugned order discusses as to how the appellant has abetted MBIL in the alleged undervaluation of goods. While the impugned Order does not indicate that the statement of the appellant has been proven to be relevant in terms of Section 138B, and that only thereafter the Adjudicating Authority has placed reliance on the statement; which itself renders such reliance placed on the statement of the appellant untenable; dehors this fact, even for arguments sake, if the statement is to be taken to be relevant and admissible, still, it is found that the statement does not support the finding of the Adjudicating Authority, namely, that by not exercising due care and diligence while administering the accounts of the company, the appellant has abetted the Company to evade duty. The statement of the appellant, among other things, merely narrates that the goods were sent by the foreign supplier through courier who completed all th....