TMI Blog2009 (8) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 4(i) of the Act. - 3437 of 1991 - - - Dated:- 25-8-2009 - Sanjiv Khanna, J. S/Shri Rajesh Rawal and Ankur Sethi, Advocates, for the Petitioner. Shri Darpan Wadhwa and Ms. Divya Jha, Advocates, for the Respondent. [Order]. - The petitioner no. 1/Jain Exports Private Ltd. on the basis of additional import licence had imported empty oxygen cylinders as spares for artificial respiration apparatus under para 186(8) of the Import Policy for 1981-82. The petitioners have filed on record bill of entry for home consumption in which the import made by the petitioner no. 1 has been described as anti seamless steel cylinders for medical oxygen gas. 2. The said imports were made by the petitioner No. 1 in the month of December, 1981 and cleared by the Customs Department on 27th February 1982. 3. The Office of the Chief Controller of Imports and Exports issued letter dated 8th July, 1983 to the petitioner no. 1 calling upon them to explain and clarify validity of the import of empty seamless steel cylinders for medical oxygen gas. Subsequently, show cause notice dated 29th April, 1985 was issued to the petitioner no. 1 and several others, under Section 4(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry into the country will be treated as unauthorized and the importer/owner of the goods will be liable to punishment under the provisions of the Customs Act, 1962 without prejudice to any other action that may be taken in this behalf under the Imports and Exports (Control) Act, 1947 and the Other issued thereunder. In such cases, the import Trade Control authorities will not regularize the import by an ex post facto licence nor will they amend the existing licence in any manner to cover such imports. Custom's jurisdiction. 324. The clearance of goods and the assessment of duty will be dealt with by the Customs authorities. It is within the jurisdiction of the Customs Authorities to determine whether or not the goods imported are in conformity with the description given in the licence. Although in case of doubt in regard to the correct description of goods given in the licence or any other matter concerning the import, the Customs authorities may consult the Import Trade Control authorities, the matter rests with the Customs authorities finally." 7. The three paragraphs have to be read harmoniously to understand the intention behind the said paragraphs and interpret them. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Control Authorities but the final authority to adjudicate under the Customs Act, 1962 rested with the customs authorities exclusively. 11. In view of the aforesaid interpretation it is not possible to accept the contention of the petitioner that once the goods were imported and cleared by the Customs authorities the respondents under the Act could not have issued notice, or lacked jurisdiction and authority to impose penalty under the Act. 12. Section 127 of the Customs Act, 1962 reads as under :- "127. Award of confiscation or penalty by customs officers not to interfere with other punishments. - The award of any confiscation or penalty under this Act by an officer of customs shall not prevent the infliction of any punishment to which the person affected thereby is liable under the provisions of Chapter XVI of this Act or under any other law." 13. Thus, infliction of penalty order under the Customs Act does not prevent authorities under any other law from inflicting penalty for violation of the said Act on the same person. Irrespective of penalty imposed under the Customs Act, 1962, penalty can be imposed if there is violation of any other enactment. It is not correct as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y concerned with the question whether a prosecution under Section 167(81) of the Act is permissible after the award of confiscation, penalty or increased rate of duty under Section 167(8) of the Act in view of Section 186. Clause (81) in Section 167 was introduced by the amending Act 21 of 1955. Before that there were 80 clauses in the section, and the scheme of those clauses, was that a person could either be dealt with by the award of confiscation, penalty or increased rate of duty, or by a prosecution before a Magistrate. It was in those circumstances that Section 86 provided that the award of confiscation, penalty, or increased rate of duty would not bar infliction of any other punishment under any other law. The intention of the legislature by this provision in Section 186 was clearly to allow a prosecution under any other law even though there might be award of confiscation, penalty or increased rate of duty under the Act. Section 186 was thus meant for permitting prosecution in addition to action under the Act in the shape of confiscation, penalty or increased rate of duty; it was never intended to act as a bar to any prosecution that might be permissible after the award of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of statutory penalty. Reference was made to a larger Bench in view of the decision of the Supreme Court in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai and Another, 2007 (219) E.L.T. 15 (S.C.) = (2007) 6 SCC 329 on the question of mens rea in cases of concealment of income. After referring to the case law on the subject relating to penalty, the Supreme Court did not agree with the decision in the case of Dilip N. Shroff (supra) and approved of the ratio in the case of Chairman, SEBI v. Shriram Mutual Fund and Another, (2006) 5 SCC 361 holding that in cases of breach of a statutory provision, penalty imposed partakes character of breach of a civil obligation, which cannot be equated with criminal proceedings. Requirement and presence of mens rea in civil obligation is not necessary unless the statutory provision is to the contrary. The decisions in Dharamendra Textile Processors and Chairman, SEBI (supra) are subsequent and after decision of the Division Bench of the Delhi High Court in the case of Dencap Electronics (P) Limited (supra). The ratio of the decisions of the Supreme Court is, therefore, applied. In Chairman, SEBI (supra), it was observed:- "35. In our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or materials in contravention of the terms of any allotment made by any recognized agency; or (f) contravenes any direction given under a control order with regard to the sales of goods or materials which have been imported under any licence or letter of authority or which have been received from, or through, a recognized agency, shall be liable to a penalty not exceeding five times the value of the goods or materials, or one thousand rupees, whichever is more, whether, or not such goods or materials have been confiscated or are available for confiscation." 20. Section 4(i) of the Act does not use the words like deliberate, intentional and wilful in the sub-clauses (a) to (f). There is no specific reference to mental intention or mens rea on the part of the person against whom the proceedings are initiated. Section 4(i) indicates an element of strict liability. Of course, it has to be established that the person concerned had actually violated or was guilty under Clauses (a) to (f). Once it is found that a person had in fact violated sub-clauses (a) to (f), penalty could be imposed without need to establish and prove mens rea or mala fide intention. 21. Section 4(i) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressions: "...by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty...." In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A (1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A(2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf of the assessees it was also submitted that Sections 11A and 11AC not only operate in different fields but the two provisions are also separated by time. The penalty provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was permitted and allowed to meet the full requirements of the actual users. Serial No. 90.18 of the Import (Control) Order, 1950 reads as under:- "90.18 Mechano-therapy appliances; massage apparatus, psychological aptitude testing apparatus; artificial respiration, ozone therapy or similar apparatus; breathing appliances (including gas masks and similar respirators)." 27. Paragraph 115 of the export import policy is as under :- "115(1) Applications for import of Gas Cylinders will be considered by Chief Controller of Imports and Exports, New Delhi, irrespective of the value involved. The application should be made in the form prescribed for import of Capital Goods. (2) Applications will be considered, on merits, having regard to indigenous production. The CCI E, New Delhi will formulate suitable guidelines in consultation with the administrative Ministry and the technical authorities concerned so that import is allowed to the extent the demand cannot be met from the indigenous sources. (3) Import of LPG cylinders will not be allowed. (4) Import of medical gas cylinders will be allowed to meet the full requirement of Actual Users. (5) Import of high pressure cylinde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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