Understanding the applicability of mensrea under Customs Act is of immense importance. Mens rea is an essential element of offence when it is expressly mentioned but in a case of statutory offence regardless of mens-rea, penalty can be invoked on the main offender i. e exporter/importer. For prosecution u/s 137 for the offences of chapter XVI , existence of guilty mind is a must otherwise offences will fall under category of technical offence or interpretation of law.
Black’s Law Dictionary describes mens rea as guilty mind. The state of mind which the prosecution must prove that defendant had when the crime was committed to secure conviction. It is one of the essentials other than actus reus (action or conduct) which constitutes crime.
Mens rea is also termed as mental element or criminal intent. What follows from the above is that, deliberate defiance of law is punishable and not the accidental omission or bonafide error. Let us examine the Mental ingredient attributable to commission of crime under following paras.
Entertainment of Idea is Not an Offence
It is also a fact that mens rea i.e guilty mind per se is not punishable, when not coupled with crime/offence. Idea can not be punished when this does not give birth to offence/crime. However, mental state coupled with wrong is punishable in common law. We need to have a re-look into criminal law to understand the role of mens-rea. It is cogent that mental state alone is not punishable. Even commission of wrong in absentia of mens rea is not punishable in criminal law.
Section 80 of Indian Penal Code proceeds on this notion which reads as under;
Section 80 –Accidents in doing a lawful act– Nothing is an offence which is done by accident or misfortune, and without any criminal intention or knowledge in the doing of lawful act in lawful manner by lawful means and with proper care and caution.
It means doer of an innocent or lawful act in an innocent and lawful manner is exempted from any unforeseen result that may ensue from accident or misfortune. If either of these elements is wanting then act would not be excused on the ground of misfortune or accident . In Sukhdev Singh v Delhi State ( Government of NCT of Delhi (2003) 7 SCC 441;2003SCC(Cri) 1714;2003 Cr LJ 4315 . It was held that benefit of exception was only available if the act was done with proper care and caution.
It is a well settled principle of common law that mens rea is an essential ingredient of offence/crime, however act due to accident is exempted from criminal proceedings.
Mens Rea in Customs Law
However nature of customs law is different from criminal law, as customs law is basically a civil law barring some provisions. Being civil law it proceeds on pre-ponderance of probability. But evasion of duty/availment of undue export incentive beyond certain threshold limit prescribed by the act and commissioned with knowledge is criminally triable in court of law. In such offence knowledge is necessary to prove the charges. In other statutory offence in absence of mens- rea , wrong is penalized through quasi judicial proceedings.
Whether Mens Rea is a Necessary Ingredient
Now the issue which needs to be examined for which sort of offences, Mens Rea is an essential ingredient to attract penalty.
The doctrine of Mens rea runs through the Customs Law through various words such as abetment, knowingly, fraudulently and intentionally. For example under Section 30, Section 41,Section 114AA Section 112, Section 114, section 117 ,Section 132 to 136, the said words are reflected.
Under Civil law, it is repeatedly held that mens rea is not essential ingredient which renders the contravention punishable. Irrespective of the presence of mens rea, any violation of civil law is an offence. Divergent decisions have been reported by law courts.
The Apex Court recently in Chairman SEBI v Shriram Mutual Fund (2006) 5.SCC has held that mens rea is not an essential ingredient for contravention of the provisions of a Civil Act, unless the language of the statute indicates the need to establish the element of mens rea, it is generally sufficient to prove that a default in complying with the statute has occurred and it is wholly unnecessary to ascertain whether the such violation was intentional or not. The breach would attract penalty regardless of the fact whether the contravention was intentional or not.
The reason for imposition of penalty even in the absence of guilty mind in civil proceedings as contravention by the defaulter causes injury and damage to the Government exchequer in the form of evasion of duty, availment of undue export incentive etc and this become actionable, as the defaulter was under obligatory duty to comply the statutory provisions and rule made thereunder. This damage result in the loss to revenue, or importation/exportation of prohibited goods therefore defaulter’s act attracts penal liability despite non -existence of guilty mind. But this does not hold good in all the cases of invocation of penalty, while adjudicating confiscation and penalty.
It does not mean that offence coupled with intention not warrant penalty. However, in Customs Act by express words of legislature, guilty mind has also been made punishable and awarded higher penalty. It is also to be noted that whenever knowledge is the proximate cause of evasion of duty, penal clause have been made stringent and penalty is enhanced.
On this notion, under Section 114AA, proceeds which reads as under;
Section 114AA- Penalty for use of false and incorrect material.—If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.
In this section penalty for use of false and incorrect material has been prescribed up to five times when done with knowledge.
Guilt Mind is Must For Offences Under Offences of Chapter XVI
Advancing this view, offence under chapter XVI which deals with offences and prosecution and spreads over from Ss 132-136 requires knowledge to establish the guilt. Technical omission and interpretation of law may not fall in this category of offences, irrespective of the prescribed value/duty for proceedings against the defaulter. As the offences of chapter XVI are criminal in nature , therefore existence of mens rea beyond reasonable doubt is required to proceed against the accused in the Court of law. If the standard degree of proof is not available, prosecution will not succeeds, as such cases do not proceeds on preponderance of probability. Existence of mens rea coupled with violation of threshold limit are the reasons, that legislature has considered these offence as criminal offences and provisions have been made for prosecution in court of law apart from quasi judicial proceedings.
Cases Where Penalty Has Been Set Aside by Court
However, in following cases, Court/appellate tribunal were having contrary view and held that in absence of existence of guilty mind, penalty is not imposable.
In Yogesh Kumar versus Commissioner of Customs , New Delhi (ACC, Export)- Final Order No. C/A/51905/2016-CU(DB), dated 30-5-2016 in Appeal No. C/53071/2014-CU(DB), the CESTAT, Delhi has held that in the case of inadvertent error in mis-declaration of quantity of export goods, penalty on CHA is not imposable in view of the finding that CHA has not abetted the exporter to intentionally declare excess garments so as to claim excess drawback , therefore penalty imposed under Section 117 of Customs Act, 1962 was CHA set aside.
In case of absence of prior knowledge, Customs Brokers cannot be penalized, if the bogus licenses have been produced by the importer. Prakash Poonia v CC(2010) 252 ELT 442(CESTAT)
It can be seen in both the cases that by the court/tribunal penalty against the customs house agents have been set aside. Customs House Agents(CHA) are assisting the exporter/importer in clearance of imported/export cargo. Their role is limited and they are subordinate to the principal i.e exporter/importer. The Act has recognized this relation by the mandate of Section 147 of the Act. In some exceptional cases they are deemed as exporter/importer but they are not the principal. It is presumed that they may not be involved in the wrongdoing or malfeasance of main offender. Therefore , without being in knowledge or hand in hand with the exporter/importer , they cannot be penalized. Their act can best be covered under offence of abatement and it is settled law that for abatement knowledge is sine qua non. Therefore in most of the cases, charges against them is dropped.
However for imposition of penalty on main offender, mens rea may not be necessary element, but for the connected persons(CHA/Shipping Line etc) whose act render the goods liable for confiscation and to charge them, knowledge is required.
Customs Law Penalizes Both, the Principal Offender And Abettor
Customs penal provisions have both the option of penalizing main offender as well as abettor. Careful reading of Section 112, 114 and 117 shows that it penalizes any person who does or omits to do any act which render the goods liable to confiscation under 111 or under 113, this denotes that it penalizes the main offender. But simultaneously these sections have penal clause to punish the abettor also. Abetment’s main ingredient is knowledge. As rightly discussed, it penalizes the person who merely contravenes it regardless of the fact that he was having knowledge. It means for the for first part of section, it talks about principal offender and as there is direct involvement, no mens rea is required. However, those who are facilitating the customs transaction mens rea is must, otherwise their act will not covered in offence of abetment.
The word abetment is not defined in the Act, therefore the meaning assigned to it in Section 3(1) of the General Clauses Act, 1897 which is as given under Section 107 of the Indian Penal Code. An abetment would include by definition intentional aiding (See Supreme Court decision in Shree Ram v. State of U.P. Mere facilitation without knowledge would not amount to abetting an offence. However, the first portion of Section 112(a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who are not directly involved in the act or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112 and 114 of the Act also includes a person who abets the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a halt as even innocent facilitation provided .
Conclusive Take on Mens Rea Under Customs Act,1962
In view of the above, it can be concluded from above discussion that mens rea is an essential element of offence when it is expressly mentioned and department requires to prove to bring home the penal charges. But in a case of statutory offence regardless of mens-rea penalty can be invoked on the main offender i. e exporter/importer. In prosecution under section 137 for the offences of chapter XVI , existence of guilty mind is a must otherwise offences will fall under category of technical offence or interpretation of law.
More Worthwhile Reads on this Blog:
Market Enquiry of Export Goods- The Correct Way to Go About
Scope of Penalty for Escape of Duty U/S 28(1) of C.A.1962
Recovery of Duty Under Section 72 of the Customs Act, 1962
Recovery of Drawback Amount Under Rule 18 of Drawback Rules 2017
Repeal And Saving in Statutory Space
