The Delhi High Court, comprising Justice Vibhu Bakhru and Justice Amit Mahajan, has ruled that the imposition of a penalty under Section 112(a) of the Customs Act without mens rea is unsustainable and should be set aside. The court emphasized that knowledge of a wrongful act of omission or commission is a necessary element for the offence of abetting under the Customs Act.
Brief Facts:
The case involved an appeal filed by a licensed Customs Broker against a penalty imposed by the Adjudicating Authority for the importation of prohibited goods and irregularities in the filing of the Bill of Entry. The Tribunal found that the appellant had no knowledge of the illegal imports and unknowingly assisted in the importation. It also concluded that the penalty imposed was excessive and reduced it from Rs. 34,14,020 to Rs. 10,00,000.
Legal Issue:
The central issue was whether a penalty for abetting the illegal import of prohibited goods could be imposed on the appellant without evidence of connivance or intentional involvement.
Contentions by the Revenue Department:
The Revenue Department, presented by Ms. Narain, argued that the penalty imposed under Section 112(a) of the Customs Act was civil in nature. According to their argument, there was no requirement to attribute any knowledge of the acts that rendered the goods liable for confiscation. Ms. Narain stated that simply filing the Bill of Entry for the import of prohibited goods was sufficient to impose the penalty under Section 112(a) of the Customs Act. She further contended that establishing mens rea was not essential for imposing such a penalty.
Observations by the Court:
The court observed that mens rea is not necessary for imposing a penalty under Section 112(a) of the Customs Act. However, it clarified that abetment necessitates, at the minimum, knowledge of the offending act. The court stated that the use of the term 'abet' in the provision implies that the person charged with abetting is aware and knowledgeable about the wrongful acts.
The decision of the Court:
Based on this reasoning, the court set aside the penalty imposed under Section 112(a) of the Customs Act, emphasizing that abetment without knowledge of the offending act is not sustainable.
Case Name: Rajeev Khatri vs. Commissioner Of Customs
Coram: Hon’ble Mr. Justice Vibhu Bakhru and Hon’ble Mr. Justice Amit Mahajan
Case No.: CUSAA 3/2021 & CM APPL. 5517/2021
Advocates of the Petitioners: Amit Kumar Attri, Priyanshu Upadhyay
Advocates of the Respondent: Ms Anushree Narain, Standing Counsel with Mr Mayank Srivastava, Advocate
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