M/S. Visen Industries Limited vs Commissioner Of Customs, Kandla

(Arising out of OIA-701-2013-CUS-COMMR-(A/KDL dated 09.12.2013, Passed by Commissioner (Appeals) Customs, Kandla)

M/s. Visen Industries Limited : Appellant (s)

VERSUS

Commissioner of Customs, Kandla : Respondent (s)

Represented by :

For Appellant (s) : Shri Jagdish Surti, Advocate For Respondent (s) : Shri J. Nair, Authorised Representative

For approval and signature :

Mr. H.K. Thakur, Honble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. H.K. Thakur, Honble Member (Technical)

Date of Hearing / Decision : 20.03.2015

ORDER No. A/10270/2015 Dated 20.03.2015

Per : Mr. H.K. Thakur;

This appeal has been filed by the appellant against OIA No. 701/2013/Cus/Commr (A)/ KDL dated 9.12.2013. The issue involved in the present proceedings is whether redemption fine and penalties are impossible when quantity of 2Ethyl Hixyl Acrylate, imported by appellant under Bill of Entry No. 245685 dated 20.06.2013, was received in excess of the quantity specified in the documents, without the knowledge of the appellant.

2. Sh. Jagdish Surti (Advocate) appearing on behalf of the appellant argued that appellant filed the required bill of entry with respect to the quantity as specified in the import documents ordered by them. That importer appellant had no knowledge of 3.8 MTS of import Cargo received in on shore tanks supplied by the sender. That no redemption fine and penalty is impossible upon the appellant in view of the following case Laws -:

(i) Sham Lal & Company vs. Commissioner of Customs, New Delhi - [2003 (161) ELT 1060 (Tri. Del)]

(ii) Bansi Lal Leisure Parks Pvt. Limited vs. Commissioner of Customs, Meerut - [2006 (196) ELT 93 (Tri. Del)]

(iii) Prayag Castings Limited vs. CC (Import) Nhava Sheva - [2009 (241) ELT 271 (Tri. Mumbai)]

3. Sh. J. Nair (AR) on the other hand relied upon the order passed by the Madras High Court in the case of Commissioner of Customs (Export), Chennai vs. Bansal Industries - [2007 (207) ELT 346 (Madras)] to argue that mens rea is not required for confiscation of offending goods and imposition of penalty under Section 111(m) and Section 112(a) of the Customs Act, 1962. Learned AR made the bench to go through Para6 to 9 of the relied upon case law and emphasized that order passed by the first appellant is correct.

4. Heard both sides and perused the case records. Adjudicating authority under OIO No. KDL/AC/PS/1070/Gr.II/2013 dated 23-26.08.2013 demanded duty/ interest and imposed redemption fine of Rs. 1,15,000/- upon the appellant under Section 125(l) of the Customs Act, 1962. He also imposed a penalty of Rs. 35,000/- upon the appellant vide Section 112(a) of the Customs Act, 1962. Under the impugned OIA dated 09.12.2013, first appellate authority set-aside the levy of duty but upheld imposition of redemption fine and penalty but reduced the same to Rs. 60,000/- and Rs. 15,000/- respectively. On the issue of imposition of redemption fine and penalty, Honble Madras High Court in the case of Commissioner of Customs (Export), Chennai vs. Bansal Industries (supra) held as follows in Para 6 to 9:-

6.?We have gone through the order of the Tribunal. It is true that the Tribunal has recorded a finding of fact that it is inclined to accept the reasons given by the assessee that it was the supplier who by mistake loaded tin sheets waste which were not ordered by the assessee and that the Revenue has not shown that there was any flow back of funds for the purpose of tin sheets waste. However, a perusal of the order impugned shows that the Tribunal proceeded on the basis that the assessee had no intention to evade duty. We are deliberately quoting the order of the Tribunal in the following words :

.... the Revenue has not shown that appellant had wilfully suppressed the facts and had mis-declared the goods with intention to evade duty and the fact that he had consciously committed the act of misdeclaration...

7.?It is oft-repeatedly held that mens rea is not an essential ingredient for contravention of the provisions of a civil law. The Apex Court recently in Chairman, SEBI v. Shriram Mutual Fund [(2006) 5 SCC 361] held as under :-

Mens rea is not an essential ingredient for contravention of the provisions of a civil Act. Unless the language of the statute indicates the need to establish the element of mesn rea, it is generally sufficient to prove that a default in complying with the statute has occurred and it is wholly unnecessary to ascertain whether such a violation was intentional or not. The breach of a civil obligation which attracts a penalty under the provisions of an Act would immediately attract the levy of penalty irrespective of the fact whether the contravention was made by the defaulter with any guilty intention or not.

8.?Applying the above ratio to the facts of the case, we find that though the Tribunal has recorded a finding of fact that it was the supplier who by mistake loaded tin sheets waste which were not ordered by the assessee, the Tribunal rendered its decision on the basis that the Revenue has not shown that the assessee had wilfully suppressed the facts and had misdeclared the goods with intention to evade duty. The order of the Tribunal mainly proceeded on the footing of intention of the assessee to evade duty, which, in our view, is not correct in the matter of breach of a civil obligation attracting levy of penalty. Therefore, the order of the Tribunal is liable to be set aside.

9.?Accordingly, the question as reframed by us is answered in the negative and against the assessee. The appeal is allowed and the order of the Tribunal is set aside and the matter is remitted back to the Tribunal for fresh disposal on merits and in accordance with law. No costs. Connected C.M.P. is closed.

5. In view of the above settled proposition of law, redemption fine and penalty are imposable. No other contrary case law of higher judicial forum has been brought to the notice of the Bench by the appellant. Further, first appellate authority has already extended substantial benefit to the appellant by setting aside the duty liability and by reducing the redemption fine and penalty. Accordingly, the appeal filed by the appellant is rejected.

(Operative part of the order pronounced in the Court)

(H.K. Thakur) Member (Technical) .KL

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