Understanding Element of Mens Rea in Misdeclaration of Goods under Customs Act

“There can be no crime, large or small, without an evil mind,”- Bishop

Understanding Mens Rea

A fundamental principle of Criminal Law is that a crime consists of both a mental and a physical element. Mens rea, a person’s awareness of the fact that his or her conduct is criminal, is the mental element, and actus reus, i.e. the act itself, is the physical element.

Mens rea is a technical term, generally taken to mean some blameworthy mental condition, the absence of which on any particular occasion negatives the condition of crime. It is one of the essential ingredients of criminal liability. A criminal offence is committed only when an act, which is forbidden by law, is done voluntarily.

It is the combination of act and intent which makes a crime. In the case of Sweat v. Parsley, Lord Diplock said, “An act does not make a man guilty of a crime unless his mind be also guilty”. Salmond said that the responsibility in crimes must depend on the doing of a ‘willed’ or ‘voluntary’ act and a particular intent behind that act.

Motive is the reason for the crime, but the law is more concerned with the intention of the accused. Mens Rea can be different in various crimes for instance in murder the mens rea is the intention to incur a forbidden result that is to kill the other person whereas in assault cases it is to provide serious bodily harm.

The Theory of Strict Liability

There are some criminal laws that don’t require any mens rea. These strict liability laws apply to certain acts that deserve criminal punishment regardless of intent, usually those involving minors.
It is another class of crimes referred to as strict liability crimes. Strict liability crimes, also known as public welfare offenses, are crimes that do not require mens rea. The defendant could be found guilty merely because he committed the act.

The theory of strict liability can be characterised as acts or omissions that are judged accountable without the presence of mens rea (mental intent). It is a liability standard that may be applied in either a criminal or civil situation. Strict liability is a regulation that renders a person legally liable for the damage and loss caused by his or her actions and omissions, regardless of culpability, including criminal law blame.

Mis-declaration under Customs Act

The Customs Act, 1962 is the basic statute that governs and regulates the entry and exit of different categories of vessels, crafts, goods, passengers, etc, into or outside the country.

Custom Duty is an indirect tax, imposed under the Customs Act formulated in 1962. The power to enact the law is provided under the Constitution of India under Article 265, which states that “no tax shall be levied or collected except by authority of law”.

Entry No. 83 of List I to Schedule VII of the Constitution empowers the Union Government to legislate and collect duties on imports and exports.

Sections 46(4) and 50(2) of the Customs Act 1962, require an importer or exporter when they file the bill of entry or shipping bill required to subscribe to a declaration regarding the truth of the contents of the bill of entry or shipping bill as the case may be. If the details so declared to be true are found to be not true, it is a ‘mis-declaration’. Mis-declaration is an offense and is punishable under the provisions of the Customs Act 1962.

When misdeclaration is proved the goods are liable for confiscation under Section 111 of the Customs Act, 1962. A penalty under Section 112 and 114AA of the Customs Act, 1962 can be imposed for misdeclaration of goods.

• Misdeclaration of description, quantity or weight, etc. when there is misdeclaration for dutiable or prohibited goods imported contrary to any prohibition under the Customs Act, the same is liable for confiscation of such goods under these sections and also liable to a penalty under section 112(a) or 114AA of the Customs Act
• Misdeclaration of value when the value of goods is incorrectly declared in the bill of entry, and misdeclaration of value is proved, such goods are liable for confiscation under Section 111 (m) and a penalty is imposable under Section 112(a) or 114AA (in case of making a false statement and document). Under the Customs Act.
• Misdeclaration of Origin on misdeclaration of Origin to claim an ineligible preferential rate of duty, such goods are also liable to be confiscated either under sections 111(d) or 111 (m) or both and also impose a penalty under Sections 112(q) and 114AA of the Customs Act.

Element of Mens Rea

In taxation laws, a penalty is leviable irrespective of any intention. Further, the penalty is imposed on a person who violates rules. The strict liability doctrine of mens rea is applied here.

• The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that mens rea is not an ingredient of Section 114 Customs Act and imposed a penalty of Rs 50,000 on Custom House Agent (CHA) on aiding export of Red Sanders wood pillars and tops. A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi CS, Judicial Member held that “Mere contravention of the provisions of the Customs Act and the regulations thereunder justifies the imposition of penalty under Section 114 of the Customs Act.”
  Read More: Mens Rea not Ingredient of Section 114 Customs Act: CESTAT Imposes Penalty of Rs 50,000 on CHA on Aiding Export of Red Sanders Wood Pillars and Tops
• The division bench of Madras High Court in M/s. Sanco Trans Ltd vs The Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, held that any knowledge on the part of the custodian of the goods is not essential to impose penalty under section 114 of the Customs Act, 1962.
  Read More: Lack of Mensrea is not a bar to Impose Penalty on the Custodian of an Illicitely Exported Goods: Madras HC

The doctrine of strict liability provides a strong deterrent for people against committing certain offences. With the reversal of the burden of evidence, the rule of strict liability may have served well in previous ages, but with the modernization of society and increased industrialisation, a change in principle was required. The strict liability exceptions would become justifications for businesses to be reckless in exercising reasonable care.

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