2004 P T D 559

[Karachi High Court]

Before Shabbir Ahmed and Muhammad Mujeebullah Siddiqui, JJ

Messrs IRAM GHEE MILLS (PVT.) LTD., LAHORE

Versus

CUSTOMS, CENTRAL EXCISE, AND SALES TAX (APPELLATE) TRIBUNAL, KARACHI and another

Special Custom Appeal No. 143 of 2001, decided on 14/11/2003.

(a) Customs Act (IV of 1969)-----

----Ss. 32(1) & 156(1)(14)---Imported RBD palm oil---Test reports showed such oil was not fit for human consumption---Authority confiscated detained oil, while imposed penalty equivalent to value of oil already got released---Tribunal upheld such decision ---Validity- Question of fact that declaration made by appellant in Bill of Entry was false, - had attained finality---Appellant had challenged imposition of penalty only, thus, outright confiscation of imported oil; which had not been released, had attained finality---Commission of offence under S.32(1) of Customs Act, 1969 had been brought home to the appellant-- High Court dismissed appeal.

(b) Customs Act (IV of 1969)---

----S. 159(1)(9)(14)---Provisions of cls. (9) & (14) of S.159(1) of Customs Act, 1969---Distinction---Both such provisions were independent and separate of each other---Penalty provided in cl. (9) of S.156(1) of the Act, 1969 was not dependent or contingent on establishing of offence under S.32 of the Act; rather same related to violation of provisions of Ss. 15 & 16 of the Act--Provision of S.156(9) of the Act was of absolute statutory liability as for taking action there under, no mens rea was required to be proved.

(c) Customs Act (IV of 1969)---

----S. 32(1)---Making out an offence under S. 32(1) of Customs Act --- 1969 Requirements of law stated.

For the purpose of making out an offence under section 32(1) of Customs Act, 1969, it was required to show that the misdeclaration in connection with any matter of customs had been made by a person knowing or having reason to believe that such document or statement was false. For this purpose, the Customs Authorities were not required to give any specific finding on such point. If on the examination and scrutiny, it could be found that the misdeclaration was made with the knowledge or having reason to believe that it was untrue/false, it fulfilled the requirement of law.

(d) Customs Act (IV of 1969)---

----Ss. 32 & 156(1)(9)(14)---Provisions of S. 32(1)(2)(3)(3A)(4)(5) & S.156(1)(9)(14) of Customs Act, 1969---Distinction---Proof of mens rea---Section 32(1) of the Act, defined offence committed on account of misdeclaration/misstatement with any matter of customs---Provision of S.32(2) could be invoked in consequence of misdeclaration/misstatement without establishing commission of offence on its account---Provisions of S.32(3)(3A) had no nexus' with subsection (1) thereof---Provisions of S;32(4)(5) of the Act, were procedural in natural containing parameters for passing orders under subsection (2)(3) thereof---Liabilities provided in S.156(1)(14) of the Act on commission of offence under S.32(1) were totally independent of fiscal measures provided in' S.32(2)(3)(3A)(4)(5)-- No specific finding on point of mens rea would be required to be given by Adjudicating Authority while imposing penalty and confiscating goods---Specific finding on point of mens rea would be required to be given by Special Judge for purpose of conviction, imposition of sentence and fine---Principles.

Pakistan v. Hardcastle PLD 1967 SC 1; Kamrah Industries v. Collector of Customs (Exports) PLD 1996 Kar. 68; AI-Hamd Edible Oil v. Collector of Customs 2003 PTD 552; Battala Ghee Mills (Pvt.) Ltd. v. Collector of Customs 2003 SCMR 1040; Appeals Nos.1201-K and 1226-K of 2001; Messrs Sikandar and Brothers v. Government of Pakistan PLD 1986 Kar. 373; Finest Corporation v. The Collector of Customs PLD 1990 Kar. 338 and Eastern Rice Syndicate v. The Central Board. of Revenue PLD 1959 SC (Pak.) 364 ref.

(e) Customs Act (IV of 1969)-----

----Ss. 179 & 185---Proceedings by Adjudicating Officer and before Special Judge---Distinction---Proceedings .by Adjudicating Officer was not purely criminal in nature while proceedings before the Special Judge was purely criminal in nature---Standard of burden of proof in both such proceedings was not same.

(f) Criminal trial----

---Mens rea (presence of guilty intent)---Proof of---For establishing an offence, which was quasi-criminal or criminal in nature, presence of 'mens rea would be required to be established, unless and until there was a case of absolute statutory liability, where no mens era would be required to be proved.

(g) Criminal trial---

---- Penalty and fine, imposition of---Distinction---Imposition of penalty was not a criminal liability and did not carry a stigma---Imposition of fine on conviction was purely criminal liability and carried a stigma with same.

Shaiq Osmany for Appellants.

Raja M. Iqbal for Respondent No.2

S. Ziauddin Nasir, Standing Counsel.

Date of hearing: 21st October, 2003.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---This appeal under section 196 of the Customs Act, 1969 has been admitted to regular hearing to consider the, following point of law arising out of the order of Customs, Central Excise and Sales Tax (Appellate) Tribunal, Karachi in Appeal No. K-23 of 2000, dated 12-8-2000.

"Whether the Respondent No.2 could charge the Appellants with misdeclaration under section 32 of Customs Act, of 1969 without producing any evidence to establish either the direct knowledge or guilty mind regarding the alleged misdeclaration and punish them with such a heavy penalty under section 156(1)(14) of Customs Act, of 1969?"

Briefly stated the relevant facts are that appellant imported 3000 Metric tons of Palm Oil from Malaysia. The oil was, supplied by Messrs Kulai Edible Oil Refinery Malaysia. The appellant filed into bond bill of entry for the entire quantity of 3000.000 M. Ts. There were three other importers as well. The bills of entry were processed and the entire consignment was stored in Tank No. 1 of bonded (liquid) Terminal of Messrs Pakistan House International. The appellant alongwith three other importers, initially filed ex-bond bill of entry for 1000 M.T. The appellant produced a test report supplied by the exporter in Malaysia and samples were drawn from the Oil stored in the bonded wherehouse. The appellants declared the Oil as RBD Palm Oil. The sample was tested by the Customs House Lab and on the basis of favourable test report, 1000 M.T. of Oil out of total quantity of 3000 M.Ts. imported by the appellant was ex-bonded and released. .

Subsequently, credible information was received by the Collectorate of Customs, Port Mohammad Bin Qasim to the effect that a number of importers were indulging in the import of oil unfit for human consumption. The issue . was highlighted in the national press also. Taking cognizance of these reports, an inquiry was instituted in the matter. During the inquiry/investigation it transpired that whole of the edible oil imported per "S.S Fuji Hoshi" and supplied by Messrs Kulai Edible Oil Refinery, Malaysia contained higher percentage of steering oil which renders the RBD Palm. Oil unfit for human consumption. Accordingly,, samples from Oil Tanker were again drawn, where 2000 M.Ts of oil was lying. The samples were sent for chemical test to various laboratories for determining melting point and other standard specifications. The samples were sent to PCSIR Lab., H.E.J. Research Institute of Chemistry, Karachi and Central Testing Laboratories of the Custom Department. The Test Reports received from PCSIR Lab H.E.J. Research Institute of Chemistry confirmed that the samples were R.B.D. Stearin and were not fit for human consumption. However, the 1st Report received from Central Testing Laboratories showed that it was fit for human consumption. The Collector of Customs formed opinion that the appellant and other importers managed to get the imported oil, released by manipulation of the test report in collusion with laboratory staff.

It was further found that the declaration filed by the appellant that` the oil imported was RBD Palm Oil was untrue and thus there was a mis-declaration on the part of the appellant/importer. The Collector of Customs further formed opinion that the mis-declaration contravened- the provisions of sections 16 end 32 of the Customs Act, 1969 read with section 3(l) of the Import and Export (Control) Act, 1950 as untrue statement was made with reference to the description, quality and specification of goods imported. Such act was violation of the provisions contained in the Customs Act and were punishable under sections 156(1), 9 and 14 of the Customs Act, 1969.

A' show-cause notice was therefore, issued to the Appellant/importer Iram Ghee Mills as to why the remaining Oil (2000) M.Ts. which was unfit for human consumption should not be confiscated and penalties for the violation of the above said provisions of law may not be imposed.

The Appellant/Importer submitted their reply and their General Manager Mr. A. Tariq appeared before Collector of Customs. The Appellant/Importer did not dispute the findings contained in various test reports furnished by Laboratories. However, the appellant altogether denied the 'ownership of the goods contending that they had opened a letter of credit for 1000 M.T. of oil but the supplier exported 3000 M.Ts. of oil. However, the appellant admitted that into bond bill of entry was filed by them for the entire quantity of 3000 M.T. The learned Collector of Customs framed the following issues:--

(i)Whether or not the goods are as per declaration of the importer?

(ii)Whether or not an untrue statement has been made by the importer?

(iii)Whether or not the goods arrived at port Qasim per "S.S. Fuji Hoshi" on 23-4-1999 and in pursuance of the Manifest No.190 of 1999, Index Nos. 49 to 54; do attract the provisions of Customs Act for levy of duty?

(iv)Who owns the goods and stands responsible for making untrue statement to deceive the mechanism of law?

The Collector of Customs held that, the importer made a declaration in respect of nature. of goods as RBD Palm Oil and placed reliance on two tests reports containing findings in his favour. One test report was sent by the supplier and the other one was obtained from Chemical Laboratory of Customs. On examination of both reports the Collector found that there was a clear cut manipulation for obtaining the desired result. He further held that the supplier and importer in this case are, one party as Directors of Messrs Iram Ghee Mills (Pvt.) Ltd., own Messrs Kulai of Malaysia and therefore, intent in manipulation of customs' declaration by submitting wrong results in the form of a chemical analysis report was quite understandable.

The learned Collector considered as to how the manipulation was made to obtain the desired result and arrived at the conclusion that the goods imported were not of standard quality as the melting point of the imported goods was far greater than 37 C. He further held that the importers obtained the manipulated results from Customs Lab as well which was found to be incorrect on account of testing reports from two independent Chemical Labs. He specifically held that the importer furnished no explanation in respect of the test reports furnished by two independent Chemical Labs and to the effect that the imported oil was unfit for human consumption which amounts to conceding the fact.

Consequent to the above findings of fact, the learned Collector helot that it is evident from the facts that the importer wilfully made a statement before Customs, which was untrue in its material particulars, thereby attracting the mischief of section 32 of the. Customs Act, 1969. It also amounted to contravention of the provision of section 16 of the Customs Act, 1969 as the goods were imported in violation of the existing rules for the import and export of the goods. The learned Collector further held that the imported goods were owned by Messrs Iram Ghee Mills (Pvt.) Ltd., and not by Kulai Edible Oil. He further observed that after receiving of adverse reports from PCSIR Lah. the appellant started disowning the ownership of the goods which showed that the appellant was not able to defend the case on merits and therefore, took a plea that, the goods were owned by the supplier of Malaysia. He concluded that the goods were owned by the appellant who had submitted application also for the release of remaining 2000 M.Ts. of Oil. He observed that since the importer did not contest the veracity of test reports of the two independent chemical labs. and instead attempted to disown the goods imported by him establishes that importer committed the offence of making an untrue statement in respect of customs affairs which is an offence in terms of section 32 of the Customs Act, 1969, read with section 3(1) of the Import and, Export (Control) Act, 1950. He therefore, confiscated 2000 M.Ts. of Oil stored in the bonded terminal because of having found unfit for human consumption. The remaining quantity of oil was confiscated under sections 9 and 14 of section 156(1) of the Customs Act.

He further held that the appellant/importer got released 1000 M. Ts. of oil which was unfit for human consumption knowingly and with intent to violate the provisions of existing laws. The appellant committed acts of misdeclaration and getting the oil unfit for human consumption released with the intent to hoodwink with laws and to defraud' the Government. He therefore, imposed a penalty amounting to Rs.25 Millions (Twenty Five Millions) in terms of the provisions contained in subsection 9 and 14 of section 156(1), being equivalent to the value of 1000 M.Ts. of oil already got released. The penalty was to be paid by the Directors of Messrs Iram Ghee Mills (Pvt.) Ltd.

Being aggrieved with the above findings of the Collector, the appellant filed appeal before the Customs, Excise and Sales- Tax Appellate Tribunal Karachi, '(hereinafter referred to as the Tribunal) being Appeal No. K-23 of 2000. The supplier Messrs Kulai Edible Oil also preferred appeal before the Tribunal being Appeal No. K-97 of 2000, assailing the finding of the Collector that the imported oil was owned by Iram Ghee Mills (Pvt.) Ltd,. and not by the Messrs Kulai Edible Oil the suppliers in Malaysia. Both the appeals were dismissed and the importer (present appellant) as well the supplier preferred appeals before this Court against the orders of the Tribunal. The appeal preferred by the supplier was withdrawn.

With the decision of the Tribunal, to the effect that the entire quantity of 3000 M.T of Palm Oil was imported by the appellant and that the appellant declared the imported oil as RBD Palm Oil in the bill of entry and other documents and that in the wake of test reports furnished by PCSIR and HEJ Research Institute of Chemistry, it was established that the imported oil was RBD Palm Stearin and not RBD Palm Oil, the questions of facts attained finality. The question of fact that the, declaration made by the appellant in the bill of entry was untrue also attained finality. Now the, sole point which has been agitated before us is, whether on the basis of facts obtained on record the offence envisaged under section 32 of the Customs Act, 1969 has-been made out and whether the penalty imposed under section 156(1)(14) of the Customs Act, 1969 is justified.

We have heard Mr. Shaiq Osmany, learned counsel for the appellant and Mr. Raja M. Iqbal, learned counsel for respondent No.2.

Mr. Shaiq Osmany, learned counsel for the appellant has frankly conceded to the proposition 9f law that the findings of fact given by the Tribunal are final and while exercising appellant jurisdiction under section 196 of the Customs Act, 1969, this Court can decide a question of law arising out of the order of Tribunal and can deliver decision thereon. The findings of fact given by the Tribunal cannot be disturbed by this Court in exercise of advisory jurisdiction under section 196 of the Customs Act, 1969. Thus, the learned counsel for the appellant has commenced his arguments on the basis of finding of fact given by the Tribunal. 'His sole contention 'is that in order to constitute an offence under section 32 of the Customs Act, the mens rea on the part of a declarant is to be established. He has contended that a mete mis declaration is. not sufficient per se to constitute offence under section 32(f) and the Adjudicating Officer is required to find out that the declarant had the direct knowledge or guilty mind while making the alleged misdeclaration, and then only consequential penal provision contained in section 156(1)(14) of the Customs Act, can be invoked which provides for imposition of penalty. At this juncture, we would like to clarify that the leaned Collector of Customs directed for outright confiscation of 2000 M.Ts of the imported oil which was not released and further imposed a penalty of Rs.25 Millions (Twenty Five Millions which is equivalent to the value of 1000 M.Ts of oil which was al ready got released. The appeal has been admitted to consider a question or law, the. tenor whereof shows that the appellant has assailed the imposition 'of penalty only. . So far, the outright confiscation of 2000 M.Ts of oil which was riot released has thus, attained finality. We therefore, propose to consider the sole point of law relating to the ingredients of section 32 of the Customs Act, and the imposition of penalty in consequence thereof.

Advancing his arguments, the learned counsel for the appellant has submitted that the .learned Collector of Customs and the learned Tribunal have not given any finding that the appellant while making a declaration in the bill of, entry that the imported oil was RBD Palm Oil had any knowledge or reason to believe that it was not so and was RBD stearin, which is not fit for human consumption and thus, have failed to give a finding that the appellant had any guilty mind/intent. He has submitted that the finding on the point of mens rea/guilty intent is lacking in the orders of the learned two. forums and therefore, provisions contained in section 32 are not attracted. Consequently, the penalty imposed under section 156 (1)(14) of the Customs Act, is not sustainable in-law. At this stage, we would further like to clarify that the learned Collector has imposed the penalty under clause (9) as well as clause (14) of subsection (1) of section 156 of the Customs Act, and no objection has been raijed before us to the imposition of penalty under clause (9).` The sole objection raised is to the penalty imposed under clause (14) of section 156(1) of the Customs Act. Clause (14) of section 156(1) deals with the commission of offence under section 32.1 which pertains to misdeclaration or misstatement knowing or having reason to believe that such document containing declaration. or statement is false in any material particular, while clause (9) provides for.1 confiscation of goods and imposition of penalty with reference to the acts committed in violation of provisions contained in sections 15 and 16 of the Customs Act. The two provisions are independent and separate of each other. They are not mutually exclusive and the penalty provided in clause (9) of section 156(1) of the Customs Act, is no-. dependent on contingent on establishing of an, offence under section 32 of the Customs Act and relates to the violation of the provisions contained in sections 151 and 16 of the Customs Act.

Now we revert back to the contention raised by the learned counsel for the appellant. In support of his submission that a finding on the point of mens rea is a condition precedent for constituting offence under section 32 of the Customs Act and imposition of penalty under section 156(1)'(14), he has placed reliance on the judgment of Hon'ble Supreme Court, in the case of Pakistan v. Hardcastle, PLD 1967 SC 1. He has placed reliance on the opinion of Hamoodur Rahman, J. (as his Lordship then was) to the effect that Item 37-B of section 167 of the Sea Customs Act, 1878 does not create an offence of absolute liability and is an exception to the general rule that mens rea is an essential element in the commission of a criminal offence. His Lordship further held that even in the case of statutory offence the assumption is that mens rea is an essential ingredient unless the statute creating the offence by express terms or by necessary implication rules it out.

We have gone through the above judgment of Hon'b' a Supreme Court and we find that his Lordship Justice Hamoodur Rahman, recorded a note of dissent on 'sole point contained in the majority judgment that the language of section 167(37-B) suggest', that this is a case of absolute liability. However, his, Lordship agreed with the majority view that there was enough material on record to justify the conclusion that the element of mens rea was also present. A perusal of the judgment recorded by his Lordship Justice S.A. Rahman, with whom his Lordship Cornelius, C.J. concurred, shows that in pursuance of the findings of fact the Collector of Customs ordered confiscation of the imported goods and imposed fine as well as personal penalty. The appeals and revisions were dismissed. The importers invoked writ jurisdiction of the High Court of West Pakistan Karachi Bench. The learned Judges of the High Court held that, the Customs Authorities "have not proved or established that the false declaration, or. the fraud practised upon them, was false to the knowledge of; the petitioners". It was therefore, held that no liability was incurred by the petitioners under section 39 of the Sea Customs Act. The Hon'ble Supreme Court observed that, `no attempt seems to have been made in the High Court to determine whether, on the facts and the circumstances of this case as found by the Collector, any mens rea could be imputed to the respondents or, not even if the principle of the authority cited., was attracted. Nor was the question examined whether the other provisions of law referred to in the Collector's order beside section 39 of the Act, required a guilty intention to be proved or not.

The Hon'ble Supreme Court thereafter examined the provisions contained in section 39 of the Sea Customs Act, (which is similar to section .32 of the Customs Act, 1969) and the provisions contained in section 167 clauses (8), (8-A), (9-B) and (37-B) of the Sea Customs, Act, 1878. Clause (9) of section 156(1) of the Customs Act, 1969 corresponds to clause (8) of section 167 of the Sea Customs Act and clause 14 of section 156(1) of the Customs Act, 1969, corresponds to clause (9-B) of section 167 of Sea Customs Act. In the present case, section 3 of the Import and Export (Control) Act, 1950 has been considered by the learned two forums below and in the cited case also the Hon'ble Supreme Court took notice of the same provisions. The High Court had allowed the writ by placing reliance on an earlier judgment of the Hdn'ble Supreme Court in the case of Messrs Eastern Rice Syndicate v. Central Board of Revenue. The Hon'ble Supreme Court observed that, even if the principle of the authority cited, was attracted the facts and circumstances as found by the Collector were required to be examined to find out if any mens .rea could be imputed to the respondents. The Hon'ble Supreme Court further observed that the question whether other provisions of law referred to in the Collector's order beside section 39 of the Act, required a guilty intention to be proved or not was not examined. The Hon'ble Supreme Court then itself examined all the relevant provisions in the Sea Customs Act, which are analogous to the provisions in the Customs Act, 1969 requiring considering by us in this appeal.

The Hon'ble Supreme Court thereafter, held as follows:--

"The interpretation, placed on section 39 of the Act in the Eastern Rice Syndicate case by this Court was that in order to attract this penal provision, it must be established that the person who is alleged to have made any statement in a document, submitted to the Customs Authorities must be false to the knowledge of the person concerned. It is obvious that such knowledge would depend upon the facts and circumstances of each case. It is not disputed that the statement made in the customs documents in the instant case regarding the nature and value of the-goods imported were in fact false. The High Court, in the present case seems to have thought that unless the Customs Collector had recorded an express finding that the persons concerned had guilty knowledge of the false declarations made in the relevant documents, no penal action could be taken against them. With respect, it may be pointed out, that the Collector need not have stated in so many words that the false statements were made in the relevant documents, consciously and deliberately, by the respondents. It is sufficient if the Collector recorded findings of fact, from which such an inference necessarily followed.

In the instant case, before the Customs Authorities, as well as in this Court, the importers on one side and the Indenting Agents on the other hand tried to pass on the blame for the wrong statements to each other. The importers were responsible, according to the Indenting Agents' position for all the statements, and the Indenting Agents were the real culprits, according to the stand of the importers. The relevant documents were all signed by the importers. The goods were cleared through the clearing agents of the Indenting Agents who also provided the insurance cover for them. The indents had been sent to the exporters by latter and they obtained the invoices. They were also the purchasers of the goods on forward contracts. After examining the record, we have reached the conclusion that this attempt on the part of the importers and the Indenting Agents, to exculpate themselves and to make out that the other party was the villain of the piece, was incompatible with the facts found by the Collector of Customs.

After examining the facts obtaining in the cited case, the Hon'ble Supreme Court observed that, "all this material was before the Customs Authorities and justified their conclusions implied in the penalties, that they regarded both the importers as well as the Intending Agents to be guilty of deliberate fraud. Section 39 of the Act, consequently was applicable with full force to both of them "

The Hon'ble Supreme Court further held that, on the basis of material available with the Customs Authorities, the offence, specified in section 167(9-B) (equivalent 'to section 156(1)(14) of the Customs Act, 1969) was brought home to the importers in whose name the false declarations were filed with the Customs Authorities and on the basis of material available it was clear that the importers were conscious that they were making false statements in those documents. The goods in question therefore, were liable to be confiscated and. every person concerned, was liable to a penalty. The penalties imposed under this provision were therefore, lawful. The Hon'ble Supreme Court thereafter examined the provisions contained in Item 37-B of section 167 of the Sea Customs Act, which pertained to the declaration of goods on a bill of entry of shipping bill and it was found that the goods not,s6 declared were concealed in or mixed with the goods so declared (equivalent to section 15641) (45) of the Customs Act, 1969). It was further held that the importer made mis declaration not only as to the nature of the goods imported but also about their value and therefore, the provision was directly applicable. The contention that mens rea was required to be proved before penal action could be taken against a person concerned was repelled. The Hon'ble Supreme Court held that, the language of section 167(37-B) suggested that this was a case of absolute statutory liability. It was further held that, the only condition of the attachment of liability was the fact of misdeclaration and there were no words in this item which may justify placing it on a par with section 39 of the Act which requires that an oral or written statement in a document should be "untrue" and not merely false. The Hon'ble Supreme Court further observed that the inference derivable from the language of Item 37-B that the legislature intended this to be a case of absolute liability for which no mental ingredients need be proved. With these findings and observations the Hon'ble Supreme Court set-aside the judgment of the High Court and, restored the confiscation of goods and penalty imposed.

Mr. Shaiq Osmani; learned counsel for the appellant has contended that, no evasion of customs-duty and taxes is involved and therefore, the Customs Authorities were not justified to levy penalty under section 32(1). In this' regard., he has placed reliance on the judgment by a Division Bench of this Court in the case of Kamran Industries v. Collector of Customs (Exports) PLD 1996 Karachi 68.

(29) As already underscored in the preceding paragraph No.26, allied to the objection raised by Mr. S. Tariq Ali decided above was the argument formulated by Mr. Farogh Naseem that the Customs Authorities were not justified to levy penalty under section 32(1) when admittedly there was no motive on part of the petitioner to evade tax due to the exemption in the field. He has cited copious case-law on the point which has already been referred. In order to examine the merits of this argument it is patient to scrutinize the provisions of section 32(1) which are reproduced as under:--

"(32) Statement error etc. ----(1)) If any person, in connection with any matter of customs---

(a)makes or signs or causes to be made or signed or delivers or causes to be delivered to an officer of Customs any declaration. notice, certificate or other document whatsoever, or 9

(b)makes any statement to answer to any question put to him by an officer of Customs which he is required by or under this act to answer, knowing or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section."

Assuming that the petitioner has undervalued and misdeclared as alleged by the respondents,, the issue to be decided is whether an action of imposing a monetary penalty can be taken when admittedly the petitioner is exempt from tax and its alleged action of under-declaration and misdescription shall be of no consequence to either side. It is settled in the case of Quetta Textile Mills (1990 ALD 582) (cited above) that section 32 of the Customs Act, 1969 is penal/criminal in nature. Like all other penal provisions we have to determine the requirements of the section. Broadly speaking, penal/criminal provisions are divided into the provisions prescribing the "actus reus" i.e. act in question and the `mens rea" i.e. the requisite mental element. It is not essential for a penal provision to contain both such ingredients as the provisions which omit the mens rea are called strict liability offences. There is little doubt that the words "untrue" and "knowledge and having reason to believe" appearing. in section 32 clearly point out that the same does not create a strict liability offence' Such has also been tile interpretation accorded to the comparable provision of section 39 of the Sea Customs Act, 1878 to section 32 of the present Act (see Pakistan v. Hardcastle Waud (Pakistan) Ltd. PLD 1967 SC 1). The mens rea provided for in the section 32(1) is the existence of "knowledge' or `reason to believe" on part of the accused that the declaration is false in a "material particular". The essential question is to determine as to whether in such a case there is to be a nexus between the mens rea under section 32(1) and tax evasion. The term "reason to believe' as appearing in section 32(1) has been defined under section 26 of the Pakistan Penal Code to mean "sufficient cause to believe. and not otherwise". According to Dr. Sir Hari Singh Gore's "Penal Law in India", 1987, Vol. 1, published by Law Publishers, Allahabad, at p.242 what would constitute a "sufficient cause' shall depend upon the facts and circumstances of the case, while "knowledge" is slightly on a higher plane than "reason to believe'. In the instant case the petitioner has categorically taken the stand before us which it had taken before the department that any misdeclaration or under-declaration was of no fiscal consequence. Such is also the admitted position which is not disputed by Mr. S. Tariq Ali. We are of the view that where a person submits a declaration in the context of customs clearance, and there can possibly be no fiscal consequence is either undeniable or regarding which the accused has demonstrated his knowledge or reason to believe that he thought that no tax was leviable, by no figment of imagination could it be said that the said person had any knowledge or reason to believe that his declaration/statement was false or untrue in any material particular. In this context the contention of Mr. Farogh Naseem that no penalty under section 32(1) is leviable for any alleged under-valuation and misdescription where there can be no motive to evade tax and where such declaration would carry no fiscal consequence is correct. Any other interpretation .would also give rise to an absurd situation where although no tax would be leviable on the main basic assessment but there could possibly be imposition of a penalty."

He has next placed reliance, in support of the above contention on another Division Bench Judgment of this Court, in the case of Al-Hamd Edible Oil v. Collector of Customs SBLR 2003 Sindh 477, wherein it has held as follows:--

"A bare reading of the section clearly indicates that it relates to a situation where a person makes any statement or files any document which is false in any material particular by reason of which any duty or charge is. not levied or is short-levied or is refunded. In such evens the Customs Authority is empowered to issue to the person concerned a notice to show cause why he should not pay the loss of revenue suffered by the Department and after giving him a hearing, beside any other action under law, order payment of the same, if a case is made out. The entire provision revolves around the central point of loss of revenue suffered by the Customs Department on account of the conduct of any person. Mr. Iqbal has riot urged that the Department has suffered any loss on account of the conduct of the appellants. The question of applicability of section 32 in the present circumstances apparently dots not arise:"

Mr. Shaiq Osmany, has further submitted that the imported oil is capable of being made fit for human consumption after due process. In support of this contention, he has placed reliance on two judgments of this Court in the case of Collector of Customs v. Batala Ghee Mills (Pvt.) Ltd., which has been upheld by the Hon'ble Supreme Court and has been reported as Battala Ghee Mills (Pvt.) Ltd. v. Collector of Customs 2003 SCMR 1040 and the judgment in the case of Messrs Al Hamd Edible Oil (supra) and upheld by the Hon'ble Supreme Court in Civil Petition for Leave to Appeal No.1201-K, 1226-K of 2001 vide order, dated 8-5-2003. However, the Hon'ble Supreme Court while refusing leave to appeal, observed that this case should not be cited as a precedent in any other case. Thus, the last point urged by Mr. Shaiq Osmani, is not required to be considered. Even otherwise, it is not germane to the issue under consideration by us which wholly pertains to the question of mens rea for the purpose of section 32 of the Customs Act, 1969 and imposition of penalty under section 156(1)(14) read with clause (9) of section 156(1) of the Customs Act, 1969.

On the other hand, Mr. Raja M. Iqbal, learned counsel for respondent No.2 has fully supported the impugned finding of the learned Tribunal. He has also placed reliance on the ratio of judgment of the Hon'ble Supreme Court in the case of Hardcastle (supra), oh which Mr. Shaiq Osmany, has placed. reliance. He has further submitted that applying the principles propounded by the Hon'ble Supreme Court in the above case guilty mind/mens rea on the part of appellant has been clearly spelt out on examination of facts available with the Customs Authorities. He has submitted that the appellant produced a manipulated test report obtained from Malaysia and thereafter managed to get an untrue and manipulated test report from the Customs Laboratory in collusion with personnel working in the Customs Labortory. He has further submitted that on the basis of false and manipulated test report, to the knowledge of appellant, 1000 M.Ts of Oil, not fit for human consumption, was got released sold in the market for human consumption. When the matter was highlighted in the national Press and further inquiry was held and fresh samples from the remaining quantity of 2000 M.Ts of Oil were sent to the PCSIR Lah. and HEJ Research Institute of Chemistry and adverse reports were received, the appellant found himself in a position where he was not able to defend himself. In order to avoid the liability he took a somersault and came with the plea that although he had filed the bill of entry but the imported oil available in storage tanker was not owned by him and it was owned by the supplier namely, Kulai Edible Oil. Mr. Raja M. Iqbla, has further contended that the Directors of Kulai Edible Oil supplier in Malaysia 'and Directors of the appellant's Company are common and therefore, both of the them in collusion with each other took a new plea. Kulai Edible Oil also filed appeal before the Tribunal and this Court, contending that the oil was owned by them and it should be treated as frustrated cargo, which may be allowed to be re exported. However, the contention was not accepted and it was held by the Collector as well as. Tribunal that the imported oil was owned by the present appellant Iram Ghee Mills. Kulai Edible Oil subsequently withdrew the appeal. He has submitted that the above admitted facts lead to the irresistible conclusion that the appellant never contested the case on merits but through out tried to wriggle out on technical and .flimsy grounds. He has taken us through the show-cause notice, dated August 30, 1999, issued by the Collector, which specifically contains that the appellant made a misdeclaration in respect of the contents of imported oil but in reply to show-cause notice the appellant never denied the factual position or his ignorance about the factual position but simply denied the ownership of the goods which contention was not accepted. Mr. Raja M. Iqbal, has vehemently argued that on the face of record, it is established that untrue statement was made by the appellant -in respect of description, quality and specification of the imported oil. He has further submitted that the appellant never disputed the fact that the Edible Oil was not fit for human consumption and was a prohibited item under section 3 of the Import and Export (Control) Act, 1950, although the show-cause notice specifically stated this fact. Mr. Raja M. Iqbal, has next contended that in view of the judgment of the Hon'ble Supreme Court in the case of Hardcastle (supra) this Court is required to examine if on the basis of material available with the Customs Authorities the mens rea can be imputed to the appellant, making out the commission of offence under section 32(1) of the Customs Act, 1969, and whether the other provisions in the Customs Act, 1969 are. also attracted which are of absolute statutory liability wherein no mens rea need to be proved and consequently, penalty imposed on the appellant is sustainable in fact and law.

We have considered the contentions raised by the learned Advocates for the parties and have perused the material available on record. We have been able to lay hand on two other judgments of this Court, (1) Messrs Sikandar and Brothers v. Government of Pakistan PLD 1986 Karachi 373 and (2) Finest Corporation v. The Collector of Customs PLD 1990 Karachi 338, dealing with the issue.

In the first judgment, a learned Division Bench, after referring and considering the ratio of judgments of the Hon'ble Supreme Court in the case of Eastern Rice Syndicate v. The Central Board of Revenue PLD 1959 SC 364 and Pakistan v. Hardcastle Waud (Pakistan) Ltd. PLD 1967 SC 1 and after examining the provisions contained in sections 32 and 156(1) clauses (9) and (14) and read with section 3 of the Import and Export (Control) Act, 1950 held as follows:--

"There is no dispute in the instant case that there was a bill of entry delivered by the petitioners but the seized goods (sewing machine parts) did not figure in the said bill of entry. There is also no dispute that the goods that were seized were prohibited goods, importation whereof without a valid licence is prohibited under section 16 read with section 3(1) of the Import and Export (Control) Act and that such goods are liable to confiscation under clauses (9) and (14) of section 156 of the Customs Act read with section 3(2) of the Import and Export (Control) Act.

In. there instant case, before the Customs Authorities as well as before this Court, the petitioners have tried to pass on the blame for the wrong statement to the exporters namely Messrs Takka Machinery Corporation Japan. The suggestion is that the exporters committed a mistake in sending case containing Sewing Machine Parts of higher value than generators. In this context reliance was placed on telexes and letters which the petitioners were able to obtain from the, foreign exporters and which they produced before Customs, Authorities showing that a mistake had been made in dispatching goods, owing to similar marking on the cases. This was a belated attempt to cover up the fraud. The long arm of accidental mistake would be strained to breaking point if it is to be imagined that out of consignment of 24 cases of .26 sets of portable generators gasoline model, the foreign exporters could have sent as many, as 21 cases of sewing machine parts, should have been included by sheer mistake. All this 'material was before the respondents and justified their conclusion implied in the confiscation of the goods and imposition of personal penalty and the respondents regarded the petitioners to he guilty of deliberate gross misdeclaration. Section 32 of the said Act consequently is applicable with full force to the petitioners.

We are of the view that in order to establish the contravention of section 32 of the said Act, mens rea need not be proved, the knowledge of the petitioners was in the context of section 32, being entirely irrelevant. What was relevant, according to us, was that the goods seized were imported into Pakistan without valid licence.

The scheme of section 156 supports- the contention of the Deputy Attorney-General that if section 32 is- read alongwith section 156(9) and (14) it would be clear that the Legislature intends, by necessary implication, the exclusion of mens rea; in dealing with the contravention of section 32, section 156(9) provides that if any goods, not being goods referred to in clause (8), are imported into or exported from Pakistan evading payment of leviable customs-duties or in violation of any, prohibition or restriction on the importation or exportation of such goods imposed by or under this Act or any other law such goods shall be liable to confiscation; and any person concerned in the offence shall also be liable to a. penalty not exceeding two times the value of the goods. Section 156(14) provides that if any person commits an offence under section 32, such person shall be liable to a penalty not exceeding twenty-five thousand rupees or three times the value of the goods in respect of which such offence is committed, whichever be greater; and such goods shall also be liable to confiscation and upon conviction by a Magistrate, he shall further be liable to imprisonment for a term not exceeding three year, or to fine or to both. It would be noticed that in column 1, section 156(9) and (14) reproduces the material words of section 16 and section 32 and does not add word "knowingly or having reason to believe". It is significant that the words "Knowingly" is sued in several other provisions contained in section 156. Thus, where the Legislature wanting. to introduce the knowledge of having reason to believe or intention actuated the commission of the offence as an. essential element of the offence, it has used appropriate words to indicate that intention. The failure to use similar words in section 156(9) and (14) cannot, therefore, be regarded as accidental but must be held to be deliberate, there is some force in this argument as well.

We are unable to hold that the Customs Authorities in the instant case had not proved or established that the declarations made in this case were false to the knowledge of the petitioners or that there was no evidence before the Customs Authorities that the petitioners were in league with the foreign exporters.

In the result, Constitution petition stands dismissed."

In the second case the petitioner imported a consignment. The bill of entry was filed and on examination it was found that there was a misdeclaiation. The petitioners were thus found guilty of offence under section 32 of the Customs Act, 1969 and confiscation of the goods. under clause (14) of section 156(1) of the Customs Act was directed with an option of redemption fine and penalty was also imposed. It was. contended on behalf of the petitioner; before this Court that there was mix-up of the goods in the packing house of the exporter and the goods were wrongly imported and were sought to be re-shipped. It was urged orf behalf of the petitioners that they had no knowledge whatsoever of the mix-up of the goods and that they did not contravene any of the provisions of section 32 of the Customs Act, 1969 which involves knowledge, as a necessary ingredient of the offence. The contention was not accepted by Saleem Akhtar and Wajihuddin Ahmed, JJ. (as their lordships- then were). It Was observed that what the learned counsel saysmay not be more their partly correct.. It was further held that section 32 of the - Customs .Act, contemplates either knowledge or "reason to believe" as regards any of the offending acts: While ,the Customs Authorities, at all levels, have fully applied their minds to the controversy involved, rendering speaking orders, even when the petitioners were not present. It was further held that the petitioners failed to explain as to how the goods were mixed-up. On appreciation of facts 9n record, it was observed that all the circumstances would tend to fix the petitioners with requisite knowledge, as contemplated in section 32 of the Customs Act, ultimately it was held as follows:-

(8) On a proper interpretation of section 32 of the Customs Act, 1969 we are, also, of the view that, generally, through direct evidential material, it would be, difficult to establish "Knowledge", which not unlike "intention" is related to a state of 'mind, in the context of wrongful acts, of commission or omission, referred to in that section and that, on principle, many a case, falling. under such provisions, shall have to be decided on circumstantial evidence and on the basis of likelihood of the offender having "reason to believe" that what he does or omits to do, is a violation, falling within the purview of the section. In the circumstances of this case, it is clear that the Tribunals under the Customs Act, 1969, did not fall into any error in coming to the conclusion that the petitioners misdescribed thedetained consignment and, thereby, contravened the requirements of section 32 /bid."

We have given our very anxious consideration to the judgments referred to above. We are of the opinion that for the purpose of making out an offence under section 32(1) of the Customs Act, 1969, it is required to show that the misdeclaration in connection with any matter Of customs has been made by a person knowing or having reason to believe that such document or statement is' false. However, for this purpose the Customs Authorities are not required to give arty specific finding on this point. If on the examination-and scrutiny of the material available with the Customs Authorities, it can be found that the misdeclaration was made with the knowledge or having reason to believe that it was untrue/ false, it fulfils the requirement of law.

Adhering to the above principle laid down by the Hon'ble Supreme Court of Pakistan and subsequently followed by this Court in the judgments referred to above, we find that there is sufficient material on record. to show that the appellant made a misdeclaration having knowledge that it was false. In fact that there is sufficient material to show that manipulated test reports were obtained from the Laboratory at Malaysia and from the Customs Laboratory in collusion with the staff of the said Laboratory. The two test reports forming basis of the declaration made by the appellant in the bill of entry were belied by the test reports furnished by PCSIR Laboratory and HEJ Research Institute of Chemistry. The later. reports were-so authentic, elaborate and specific that the appellant could not muster courage to defend his declaration and came with a new plea that remaining imported oil lying in the storage tank was not owned by them. This fact alone clearly indicates that the appellant had knowledge or at least had reason to believe that the declaration made by them in the bill of entry to the effect that the imported oil was. RBD Palm Oil fit for human consumption was false and in fact. it was RBD Palm stearin which is not fit. for human consumption. We are therefore; of the considered opinion that, commission of offence under section 32(1) of the Customs Act, 1969 has been brought home to the appellant and the contention of learned counsel for the appellant to the contrary is not tenable.

The next question which requires consideration is, as to what consequences follow from the bringing home of the guilt to the appellant in respect of the offence defined under section 32(1) of the. Customs Act, 1969. It would be appropriate to reproduce section 32 and section 156(1)(14) of the Customs Act, 1969, which read as follows:-

(32) Untrue statement, error, etc.---(1) if any person, in connection with any matter of customs:--

(a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of Customs any declaration, notice; certificate or other document whatsoever, or

(b) makes any statement in answer to any question put to him by an officer of Customs which he is required by or under this Act to answer.

Knowing or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section.

(2)Where, by reason of any such document or statement as aforesaid or by reason of slime collusion, any duty or charge has not been levied or has been short-levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within five years of the relevant date, requiring him to show cause why he should not pay the amount specified in the notice.

(3)Where, by reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short-levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice.

(3A)Notwithstanding anything contained in subsection (3), where any duty or charge has not been levied has been short-levied or has been erroneously refunded and this is discovered as a result of an audit or examination of an importer's accounts or any means other than an examination of the documents provided by the importer at the time the goods were imported, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant (late requiring him to show cause why he should not pay the amount specified in the notice.

(4)The appropriate officer, after considering the representation, if any, of such person as is referred to in subsection (2) or subsection (3) shall determine the amount of duty payable by him which shall in no case exceed the amount specified in the notice and such person shall pay the mount so determined.

(5).For the purposes of this section, the expression "relevant date" means:-

(a)in, any case where duty is not levied, the date on which an order for the clearance of goods is made;

(b)in case where duty is provisionally assessed under section 81, the date of adjustment of duty after its final assessment;

(c)in a case where duty has been erroneously refunded, the date of its refund;

(d)in any other, case, the date of payment of duty or charge."

Section 156(1) (14)

"14. if any person commits anSuch person shall he liable to penalty

offence under section 32.not exceeding twenty-five thousand

rupees or three tithes the value of the

goods in respect of which such offence

is committed; whichever be greater;

and such goods shall also be liable to

confiscation; and upon conviction' by a

Special Judge, he shall further be liable

to imprisonment for a term not

exceeding three years, or to fine, or to

both,'.

A perusal of section 32 shows that subsection (1) contains the definition of the offence constituted on account of making misdeclara tion or misstatement in connection with any matter of Customs. Subsection (2) of section 32 takes care of retrieving the! State revenue and provides. complete mechanism including the procedure and the period of limitation within which a duty or charge can be recovered which was not levied or was 'short-levied or was erroneously refunded: The language of subsection (2) is very clear to the effect that mere misdeclaration or misstatement or a collusion between the person making misdeclaration or misstatement and Customs official is sufficient per se for making goods the loss caused to the State revenue. No question of any guilty mind or mens rea is involved.

Subsection (2) of section 32 has although nexus- with subsec tion (1) but to the extent of misdeclaration/misstatement only and is not contingent upon commission of offence defined in subsection (1), because for the purpose of constituting offence, which by its very nature is quasi criminal or criminal, it is necessary that there should be material available with the Customs Authorities to the effect that the misdeclaration/misstatement was made with the knowledge or by having reason to believe that such document or statement is false. No such condition is attached for invoking the provisions contained in subsection (2) and as already observed mere misdeclaration or misstatement without commission of offence is sufficient.

So far, subsection. (3) is concerned, it solely deals with the retrieval of tax and thus takes care of loss of revenue suffered by the Customs Department not on account of any misdeclaration or misstatement but on account of inadvertence, error or misconstruction the part , of assessee or Customs officials. Thus, although subsection (3) is part of section 32 but it has no nexus with sub section (1) of section 32. It is totally independent provision and for invoking this provision no misdeclaration or misstatement is required to be shown.

Likewise subsection (3A) also has no nexus with the provisions contained in subsection (1) and caters entirely different situation. The invocation of subsection (3A), pre conceives the disrecovery of any short levy, non-levy or erroneous refund on account of or as a .result of audit or examination of any imports account or by any means other than examination of the documents provided by the importer at the time of import of the goods. Subsection (4) is merely procedural in nature which is meant for giving a right of hearing to a person to whom the show cause notice has been issued under subsection (2) or subsection (3) and further restricts the discretion of the appropriate officer that the duty payable shall not exceed specified in the notice.

Thus, it is clear that subsections (2)(3) (3A) and (4) revolve around loss of revenue. The proceedings envisaged under these subsections are purely civil in nature and deal with the fiscal consequences on account of the acts/omission specified in subsections themselves. The observations contained in the two earlier judgments of this Court in the case of Kamran Industries v. Collector of Customs and Messrs Al-Hamd Edible Oil. v. Collector of Customs should be read in the above context. Some misconception appears to be prevailing about the nature of provisions contained in section 32 and, therefore, the above clarification was required.

As already observed. subsection (1) of section 32 defines the offence of misdeclaration/misstatement in connection with the matter of customs and an offence is always quasi criminal/criminal in nature. For establishing an offence which is quasi criminal/criminal in nature, the presence of guilty intent/mens rea is required to be established until and unless there is a case of absolute statutory liability, where no mens rea is required to be proved. The quasi criminal /criminal liability consequent the commission of offence defined under subsection (1) of section 32 is not dealt with in other subsections of section 32 but has been provided in clause (14) of section 156(1) of the Customs Act, 1969. The relevant provision has been reproduced in the earlier part of this judgment. A perusal of columns Nos. 1 and 3 show that it pertains to the commission of offence under section 32. A perusal of column No.2 shows that the consequences provided are threefold. First, a person committing an offence under section 32(1) shall be liable to the penalty specified therein, secondly, the goods in respect of which the offence has been committed are liable to be confiscated and thirdly, there is a purely criminal liability to the effect that upon conviction by a Special Judge the person committing the, offence shall further be liable to imprisonment for a term not exceeding three years or ,fine or to both. The liability of imposition of penalty and confiscation of goods can be restarted to by an appropriate officer of the Customs under section 179 of the Customs Act, while the conviction and sentence for imprisonment and/or fine can be awarded by the Special Judge Customs appointed under section 185 of the Customs Act, 1969. The ratio of the judgment of Hon'ble Supreme Court in the case of Hardcastle is applicable to the imposition of penalty and, confiscation of, goods only as at the relevant time, the criminal liability was not provided in law.

Thus, the liabilities provided in clause (14) Of section 156(1) of the Customs Act, 1969 on commission of offence under section 32(1) are totally independent of the fiscal measures provided in subsections (2)(3) (3A) (4) and (5), of section 32.

To summarise the above discussion, it is concluded that subsection (1) of section 32 defines the offence committed on account of misdeclaration/misstatement in connection with any matter of the Customs. Subsection (Z) of section 32 is to be invoked in consequence of a misdeclaration/misstatement , only. This provision can be invoked without establishing the commission of offence on account of mis declaration/misstatement.

Subsection (3) (3A) have no nexus with: subsection (1) of section 32. Subsections (4) and (5) are procedural in nature and contain para meters within which the orders under subsection (2) and subsection (3) of section 322 can be made; The consequences of commis sion of penal offence are provided in clause (14) of section 156(1).

For the purpose of imposing penalty and confiscation of goods no specific finding by the appropriate officer of Customs on the point of mens rea is required. If it can be gathered from the material available with the Customs Authorities it shall fulfil the requirement of law. However, for the purpose of conviction by a Special Judge and thereby imposition of sentence of imprisonment and fine a specific finding on the point of mens rea is required to be given failing which the criminal liability or conviction and fine shall not be sustained. At this point it is also appropriate to point out that the officers of the Customs Department 'can confiscate the goods and levy the penalty while the Special, Judge can award the sentence and imprisonment and fine. The imposition of penalty is not a criminal liability and does not carry any stigma while the imposition of fine on conviction is purely criminal liability and carries a stigma with it. Thus, keeping in view the difference between the proceedings by Adjudicating Officer of the Customs Authorities under section 179 of the Customs, which is not purely criminal in nature and the proceedings before a Special Judge appointed under section 185 of the Customs Act, which is purely criminal in nature, the standard of the burden of .proof shall not be the same. The issue has already been discussed in detail and requires no further elaboration.

Now we come to the provisions contained in clause (9) of section 156(1) of the Customs Act, which reads as follows:--

"9.(i) If any goods, not being goods referred to in clause 8, are imported into or exported from Pakistan evading payment of leviable custom-duties or in violation of any prohibition or restriction the importation orexportation of such goods imposed by or under this Act or any other law; or

(ii) if any attempt be made so to import or export any such goods; or

(iii) if any such goods be found in any package produced before any officer of custom as containing not such goods; or

(iv) if any such goods be found eitherbefore or after landing or shipment to have been concealed in any manner on board any conveyance with the limits of any sea port, air-port, railway station or other place whereconveyances are ordinarily, loaded or unloaded; or

(v) if any such goods, the exportation of which is prohibited or restricted .as aforesaid be brought within a customs-area or to a wharf, with the intention of loading them on a conveyance for exportation in violation of such prohibition or restriction."

Such goods shall he liable to confiscation; and any person concerned in the offence shall also be liable to a penalty not exceeding two times the value of the goods.

15 and 16

A perusal of above provision shows that no mens rea is required to be proved for taking action provided in column No.2 and is not contingent on establishing the mens rea/guilty intent. The provision is of absolute statutory liability as held by the Hon'ble Supreme Court in the case of Hardcastle (Supra).

We are further fortified in the above views with the recent judgment of the Hon'ble Supreme Court in the case of Batala Ghee Mills (Pvt.) Ltd. v. Collector of Customs 2003 SCMR 1040. The Hon'ble Supreme Court up-held the confiscation of goods and release thereof on payment of redemption fine in lieu of confiscation of goods as provided under section 181 of the Customs Act, 1969 without any finding on the point of mens-rea.

Consequent to the above discussion, the question for consideration is decided in affirmative and the appeal stands dismissed.

S.A.K./I-93/KAppeal dismissed.