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2009 (8) TMI 477

..... nce. Artificial respiratory system covered under S.No. 90.18 of import (control) order, 1950. oxygen cylinders bought and sold in market as separate apparatus and equipment. Held that- petition against order holding imports as not legal, dismissed. Bank guarantee encashable.

penalty imposed and Exports (Control) Act, 1947 assailed as without jurisdiction as goods cleared by Customs. Imposition of penalty or punishment under Custom Act 1962, not absolve default under the imports and exports control Act, 1947. held that- penalty under Customs Act, 1962 not prevents authorities under any other law from imposition penalty for violation of Act by some person. Jurisdiction not lacking for imposing penalty under the act.

penalty under section 4(j) of Import and Export Control Act, 1947 is civil liability and not punishable by a criminal Court Means rea not required for penalty under section 4(i) of the Act. - 3437 of 1991 - 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 .....

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..... finding in the impugned order that the petitioner no. 1 had any mens rea, and therefore, the order imposing penalty cannot be sustained. Lastly, the oxygen cylinders imported by the petitioner No. 1 were covered by Chapter 90.18 of the Order and, therefore, on merits there was no illegality in the imports. 6.Contention No. 1 Paragraphs 322, 323 and 324 of Chapter xiii of the Handbook of Imports and Exports Procedure 1981-82 read as under: 322. Import is validly covered by a licence when the description, value and the quantity of imported goods are in accordance with the licence and the shipment/dispatch of the goods from the supplying country takes place within the period of validity of the licence. Imports not covered by licences. 323. If any article, requiring a licence, is imported or sought to be cleared without a valid licence, its 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 .....

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..... ishment under the Customs Act, 1962 was not a pre-condition for levy of penalty under the Act. 10. Paragraph 324 of the Handbook clarifies that the customs authorities had the right and jurisdiction to decide whether or not goods imported were in conformity with the licence, though they might have consulted the Import Trade Control Authorities. The final authority in this regard were the customs authorities. Paragraph 324 of the Handbook applied to situations where the goods were produced for clearance and an assessment order was to be passed by the Customs Authorities. Under the provisions of the Customs Act, the Customs Authorities had exclusive and sole jurisdiction to determine validity of import for Customs Act, 1962 and the quantum of duty payable on the said goods. The Customs Authorities could consult Import Trade 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 .....

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..... me Court in Soni Vallabhdas Liladhar and Another v. The Assistant Collector of Customs, Jamnagar, 1983 (13) E.L.T. 1408 (S.C.) = AIR 1965 SC 481 in paragraph 10 has held as under:- 10. It is urged that when Section 186 lays down that the award of any confiscation, penalty or increased rate of duty under the Sea Customs Act shall not prevent the infliction of any punishment to which the person affected thereby is liable under any other law, it necessarily forbids by implication infliction of any punishment to which the person affected thereby is liable under the Sea Custom Act itself. In this connection our attention is drawn to certain observations in Leo Roy Frey v. Superintendent District Jail. It is true that in that case this Court referred to Section 186 of the Act; but that case was not directly 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 .....

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..... ld that penalty under Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 for failure to carry out statutory obligation is a result of quasi criminal proceedings and penalty should not be imposed unless the party obliged had acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct or had acted in conscious disregard of his obligation. The said decision of the Division Bench has to be examined and applied in the light of subsequent decision of the Supreme Court in Union of India and Others v. Dharamendra Textile Processors and Others, 2008 (231) E.L.T. 3 (S.C.) = (2008) 13 SCC 369. In the said decision, three Judges of the Supreme Court considered case law on the subject relating to mental intention and requirement to establish mens rea in cases 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 w .....

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..... or which they were delivered to him; or (c) having made a declaration for the purpose of obtaining- (i) a licence or letter of authority to import any goods or materials, or (ii) any amendment of such licence or letter of authority, or (iii) allotment of any imported goods or materials; is found to have made in such declaration, any statement which is incorrect or false in material particulars, or (d) acquires, sells or otherwise parts with, or agrees to acquire, sell or otherwise part with any imported goods or materials in contravention of the conditions of any licence or letter of authority in pursuance of which such goods or materials had been imported; or (e) acquires, sells or otherwise parts with, or agrees to acquire, sell or otherwise part with, any imported goods 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 mate .....

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..... Mills, 2009 (238) E.L.T. 3 (S.C.) in which Section 11AC of the Central Excise Act, 1944 was interpreted and the judgment in the case of Dharamendra Textile (supra) interpreting the said Section was examined and clarified. Section 11AC of the Central Excise Act, 1944 deals with cases of non-levy or non-payment or short levy or short payment or erroneous refund by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention of the provisions of the Act or the Rules with the intention to evade payment of duty. Noticing the language of Section 11AC and the requirements stipulated, the Supreme Court observed as under :- 18. One can not fail to notice that both the proviso to sub-section 1 of Section 11A and Section 11AC use the same 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 .....

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..... n, wilful mis-statement or suppression of fact and intention of the person on whom the penalty could be imposed. 26. The third issue pertains to merits and whether empty gas oxygen cylinders were imported as per the terms of the licence, i.e. spares for artificial respiratory system. The petitioner had imported 2721 pieces of empty seamless steel cylinders. These were claimed to be imported as spares for artificial respiratory system under paragraph 186(8) read with Chapter 90.18 of Schedule 1 to the Order. As per the respondents, empty seamless steel cylinders fall under paragraph 115 of the Import Policy for 1981-82 for which the petitioners did not have a valid licence and in terms of paragraph 115(4) import of medical gas cylinders 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 .....

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