Legal principle

Where penalty under Section 112 and prosecution under Section 135 of the Customs Act rest on the same set of facts and evidence, the Revenue cannot sustain the penalty after the accused's acquittal in the criminal court unless it points to a different set of facts or evidence.

Court decision

The civil miscellaneous appeal filed by the Revenue was dismissed with no costs, upholding the Tribunal's order setting aside the penalties under Section 112(b) imposed on the respondents.

Facts

The Commissioner of Customs, Trichy appealed against a CESTAT final order (13.09.2005) which set aside penalties imposed on Duraiappa and others under the Customs Act, 1962. The case concerned 1,31,076 ball bearings recovered from a ship and confiscated under Section 111, with the accused prosecuted under Section 135(1)(b) for dealing with goods liable to confiscation. The criminal court acquitted the accused, finding the charge unproved — noting defects such as over 21,000 ball bearings auctioned in excess of the confiscated quantity that the prosecution could not explain. That acquittal was affirmed by the Madras High Court in Crl. Appeal (MD) No.1730 of 2002 on 13.04.2010, and the Tribunal relied on Capt. M. Paul Anthony and Gopaldas to hold the penalties untenable.

Key provisions

• Section 112, Customs Act, 1962 — Penalty for improper importation of goods
• Rule 8, Customs (Appeals) Rules, 1982 — Form of application to the High Court
• Section 130, Customs Act, 1962 —  Appeal to High Court
• Section 138A, Customs Act, 1962 —  Presumption of culpable mental state