Judgment:
1. The Department has preferred this appeal against the non-imposition of penalty on the importers by the Additional Collector of Customs, in the following background.
2. The respondents herein imported a consignment of 120 bales declared to contain wool waste. Physical examination revealed that, out of 120 bales, only 20 bales contained wool waste while the remaining bales contained synthetic waste. The adjudicating authority confiscated the goods. However no penalty was levied upon the importers.
3. The only issue that survives for consideration is whether the facts and circumstances of the case warranted the levy of penalty.
4. We have heard Shri Jai Narayanan Nair, for the appellants and Shri K.L. Seth for the respondents.
5. The learned DR contends that the allegation that the 20 bales containing wool waste were used to conceal the unauthorised import of synthetic waste establishes as mens rea on the part of the importers, justifying imposition of penalty. He refers to an order of this Tribunal in the case of Collector of Customs, Bombay v. Gopal Jee Enterprises (Order No. C/344/90-D 6. In this case, there is no finding of concealment. Added to this is the fact that the importers had obtained a certificate from a reputed test house from UK which was seized from their office during the raid.
The learned Counsel rightly draws a distinction between the facts of the M/S Gopal Jee Enterprises case (Supra) and the present appeal. In the case Ist mentioned, the adjudicating authority, finding the importation illegal , ordered confiscation of wool waste, allowed the importer to obtain release of the goods on payment of a redemption fine and also imposed a personal penalty of Rs. 10,0007- and the Department applied (by way of appeal) for enhancement of the quantum of penalty.
There was a clear and categorical finding that 77 bales of wool waste had been used to conceal contraband of 49 bales of synthetic waste, while in this case, there is no such finding although concealment is alleged. The 2 cases are therefore distinguishable.
7. It is well settled that penalty proceedings are quasi-criminal proceedings and penalty cannot be imposed in the absence of mens rea.
In the case of Commissioner of Income Tax v. Anwar Ali (AIR 1970 S.C.1782), the Supreme Court observed that "Before penalty can be imposed the entirety of the circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had fraudulently furnished inaccurate particulars." 8. The circumstances of this case do not warrant imposition of penalty.
We see no reason to interfere with the impugned order and accordingly the appeal is dismissed.