Petitioner’s Knowledge of Prohibited Nature of Goods and Concealment: Delhi High Court upholds Penalties u/s 112(a) & 112(b) of Customs Act on Smuggling Gold [Read Order]

The High Court of Delhi has upheld the imposition of penalties under Sections 112(a) and 112(b) of the Customs Act, 1962 for smuggling gold. The decision was based on the justification that he was aware of the law, the contents of the packages he carried and the awareness of its prohibited nature.

The petitioner, Shri Rameshwar Tiwari had been intercepted by the Officers of Air Intelligence Unit ( AIU ), Kolkata Customs, upon his arrival from Bangkok at the Kolkata airport. Upon inspection, gold weighing 3203.900 grams, concealed within medicine sachets in his possession, was discovered. The value of the seized gold was estimated to be Rs.88,42,764/-.

The petitioner failed to produce any legitimate documents to support the possession or legal importation of the gold. Consequently, he was penalised under Sections 112(a) and 112(b) of the Customs Act, 1962.

The petitioner, represented by Mr. Umakant Mishra and Mr. D. Dash argued that he was unaware of the gold concealed in his possession, claiming that he was merely a carrier of legitimate goods from Bangkok to Kolkata.

The respondent revenue, Union of India and others, represented by Mr. Vijay Joshi and Mr. Shubham Chaturvedi, contended that the petitioner’s involvement in smuggling gold, as evidenced by the concealed nature of the goods and failure to declare them, warranted the penalties imposed under Sections 112(a) and 112(b) of the Customs Act.

The court noted that the petitioner’s frequent travels between the two cities and his involvement in transporting goods for others for monetary gain implied knowledge of the law and the contents of the packages he carried. The manner in which the gold was concealed further indicated his awareness of its prohibited nature.

The bench emphasised that the petitioner’s involvement in smuggling gold, a prohibited item, posed a threat to the public economy and financial stability of the country, echoing a precedent set by the Supreme Court of India in previous cases.

Even though the petitioner contested the imposition of penalties under both Sections 112(a) and 112(b) of the Customs Act, arguing against the composite penalty, the court upheld the decision of the adjudicating authority.

The bench clarified that Section 112(a) operates on a strict liability concept and does not require proof of mens rea, while Section 112(b) necessitates establishing mens rea or knowledge. Given the circumstances of the case and the petitioner’s involvement, the court found the penalties imposed justified.

The bench also addressed the petitioner’s argument regarding the alleged involuntariness of his statement recorded under Section 108 of the Customs Act. However, since the petitioner failed to retract his statement before the authorities, the court deemed it inadmissible evidence.

The bench found no merit in the petition and upheld the penalty of Rs.10,00,000/- imposed on the petitioner, considering it proportionate to the gravity of the offence.

In result, the division bench comprising Mr. Justice Sanjeev Sachdeva and Mr. Justice Ravinder Dudeja dismissed the writ petition filed by Shri Rameshwar Tiwari challenging the order imposing composite penalties on him.

To Read the full text of the Order CLICK HERE

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