Wednesday, 24 August 2016

Whether simultaneous penalties can be imposed on partners and partnership under customs Act?

It is thus clear from the principles of law as enunciated in the above decisions of the Supreme Court, it would not be appropriate to read that only when the partners knowingly do certain acts or omissions or when only they have the prior knowledge, that their acts amount to contravention of the provisions of Section 111 of the Act which would lead to confiscation of goods, only in that case they can be held liable for penalty under Section 112(a) of the Act. Such an interpretation would lead to reading something in section 112(a) which is expressly kept away by the Legislature. The legislature has intended exclusion of mens rea into section 112(a) of the Act in dealing with contravention of Section 111 of the Act. This is clear as the Legislature does not use the words 'knowingly' or 'willfully' or 'intentionally' in Section 112(a) which can be noted in other provisions, and this is certainly not accidental. If such words which can be considered to be deliberately avoided to be used by the Legislature, if read into the provisions of Section 112(a), it would render Section 112(a) nugatory resulting in defeating what is intended by the Legislature. The firm and the partners thus can in a given case be subjected to a simultaneous penalties for the contravention of Section 111 of the Act resulting into confiscation of the goods, however the same would be subject to the either of the parties proving that the contravention has taken place without their knowledge or despite exercise of all due diligence to prevent such contravention, which is a safeguard inherently provided by the Act. Thus as regards use of the word "abets" inSection 112(a) of the Act, it may be observed that same would not attract the Rule of mens rea. Further it is well settled that a penalty is imposed under the Act for such acts which are in the nature of breach of a civil obligation and by an adjudicatory proceeding, different from criminal proceedings before a Criminal Court and thus would not attract the Rule of mens rea.
Bombay High Court

M/S. Amritlakshmi Machine Works vs The Commissioner Of Customs, ... on 29 January, 2016

    CUSTOMS APPEAL NO. 100 OF 2012
         M.S.SONAK &
        G.S.KULKARNI, JJJ.
Citation:2016 CRLJ(NOC) 216 Bom(FB)
Read full judgment here:click here

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