High Court of Delhi

Rajeev Khatri Vs. Commissioner of Customs (Export)

MANU/DE/4161/2023

04.07.2023

Customs

Abetment necessarily requires knowledge of the offending Act for imposing penalty under Section 111 of the Customs Act

The Appellant has filed the present appeal under Section 130 of the Customs Act, 1962 ('Customs Act'), impugning an order passed by the Customs, Excise and Service Tax Appellate Tribunal, ('the Tribunal').The Appellant had preferred the said appeal against an order passed by the Adjudicating Authority, imposing a penalty of Rs. 34,14,020 on the appellant under Section 112(a) of the Customs Act.

Question for consideration in this appeal is "Whether, given the finding that no case of connivance is made out by the Appellant and he had no knowledge of the import of prohibited goods, penalty under Section 112(a) of the Customs Act for abetting their illegal import of prohibited goods, can be imposed on the Appellant?"

The Revenue does not contest the finding of the Tribunal that no case of connivance has been made out against the Appellant and that he had no knowledge that the goods sought to be imported were prohibited and their import was illegal.

Section 112(a) of the Customs Act includes two category of persons, who may be liable for fine. The first category of persons are those who, in relation to any goods, do or omit to do any act which renders the goods liable for confiscation under Section 111 of the Customs Act. The second category of persons comprises of those who abet the doing or omission of such acts. In the present case, penalty has been imposed on the Appellant on the allegation that he had abetted the acts of misdeclaration, importation of prohibited goods and not of committing those acts.

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.

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.

It is apparent 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 an act.The penalty imposed on the Appellant under Section 112(a) of the Customs Act is set aside. Appeal allowed.

Tags : Penalty Imposition Legality

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