TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1409
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....thereby rendering them liable to confiscation. The goods were seized and handed over to the CFS Authority for safe custody. In the course of investigation, statements were recorded from various persons, including the Appellant herein. The investigation culminated in issuance of show cause notices to various persons including the Appellant, to jointly and severally show cause as to why the said foreign origin/brand cigarettes attempted to be smuggled into India from Dubai, as well as the pampers used as cover goods for smuggling cigarettes, should not be confiscated and penalty should not be imposed on them under Section 112(a) of the Customs Act, 1962. The Notice, in so far as the Appellant was concerned, among other things, alleged that the Appellant, partner of M/s. Active Global Logistics, Chennai, the Customs Broker, has admitted that he had not followed the Customs Brokers Regulations like verification of KYC, and that he received import/export documents from unscrupulous and unauthorised agents other than IEC holder, that is, S/Shri B. Balachander and P Karthik Venkatraman who had provided KYC documents and Customs Clearance documents, although for all purposes S. Venkatesan ....
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...."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, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is greater; (ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of Section 114A, to a penalty not exceeding ten percent of the duty sought to be evaded or five thousand rupees, whichever is higher: (iii) xxxx (iv) xxxx (v) xxxx " 9. At this juncture, it is apposite to refer to the decision of the Ho....
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.... 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 alleged to have abetted such acts of omission or commission. This is because, abetment, necessarily requires, at the minimum, knowledge of the offending Act. 31. The use of the expression 'abet' in Section 112(a) of the Customs Act, makes it implicit that the person charged, who is alleged to have abetted the acts of omission or commission, has knowledge and is aware of the said acts. A plain meaning of the word 'abet' means instigation, aid, encouragement of an offence2. It necessarily involves the knowledge that the act being abetted is wrong. 32. The Black's Law Dictionary3 defines the expression 'abet' as under: "1. To aid, encourage, or assist (someone), esp. in the commis....
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.... 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. - 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." 36. Thus, in the context of Section 112(a) of the Customs Act, by definition, the expression 'abet' means instigating, conspiring, intentionally aiding the acts of commission or omission that render the goods liable for confiscation. 37. It is apparent from the above that the knowledge of a wrongful act of omission or commission, which rendered the goods liable for confiscation under section 111 of the Customs Act, is a necessary element for the offence of abetting the doing of such a....
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....ctly 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 act or omission to act possible could result in imposing of penalty."5 40. We respectfully concur with the aforesaid view. This view has also been consistently followed by the Tribunal. 1. Volume 85, Page 580, Paragraph 1023 2. Simpson, J. A., & C., W. E. S. (1989). The oxford english dictionary (2nd ed., Vol. 1). Clarendon Press. 3. "Abet." Black's Law Dictionary, 10th Edition, Edited by Bryan A. Garner, 10th ed., West, 2014, pp. 4-4. 4. 3. Definitions -In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugn....
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....ove said sections where upon perusal of the statement of the Appellant finding him non-cooperative in the investigation which clearly reflects the mens-rea in the instant case. 7. I find that the investigation clearly reveals that Shri. C. Sreepathi knowingly processed customs clearances for a non-existent entity, M/s. VKR Impex, despite being aware of the firm's non-existence at the given address. Additionally, he accepted documents from unauthorized individuals, namely Shri Vicky, Karthik, and B. Balachander, who were neither the IEC holders nor authorized representatives of M/s. VKR Impex. Such acts amount to abetting the fraudulent import and export transactions thereby rendering himself liable for penal action under the Customs Act, 1962 as well. Further the fact that Shri. C. Sreepathi facilitated the clearance of another consignment for the same non existent firm despite the previous non payment of service charges indicates a pattern of deliberate negligence and connivance. His failure to provide a satisfactory explanation regarding his decision to entertain the importer again, despite knowing the firm's dubious credentials, further corroborates his complic....
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....ting penalty under Section 112(a). 12. However, this is not to say that the conduct of the Appellant is beyond reproach. But such conduct merits to be dealt with under the provisions of the Customs Broker Regulations prevailing for the relevant period that are applicable to a Customs Broker, i.e. the provisions of CBLR, 2018. It cannot be that the Appellants are liable to be visited with penalties under the Customs Act, and yet are not being proceeded against under the applicable CBL Regulations. Pertinently, there is nothing on record indicating that the customs authorities were intending to proceed against the Appellant under the CBLR 2018 at that relevant point in time. Nothing has also been brought on record which would indicate that the Appellant had been proceeded against under the CBLR, 2018 since then. The finding of failure on the part of the Appellant to verify the antecedents of the importer as per the obligations cast under the CBLR regulations which has been rendered by the Ld. Appellate Authority, even if taken at face value, at best may amount to negligence in the observance of the responsibilities cast upon the Appellant under the said Regulations. However, that ....