COLLECTOR OF CUSTOMS Vs. KAMANI OIL INDUSTRIES

JUDGEMENT

(1.) REVENUE has preferred this appeal praying for enhancement in the redemption fine ordered by the Collector under the impugned order and also to impose deterrent penalty on the respondents under Section 112 of the Customs Act.

(2.) SHRI K. Srivastava, learned SDR, submitted that M/s. Kamani Oil Industries imported a quantity of 491.803 tonnes of Top White Tallow from Newzealand and sought their clearnaces against export house licence issued in the name of Nagesh Housing Export and transferred to Arvind Export Pvt. Ltd. A show cause notice dated 14 -6 -1983 was issued to the respondents as Beef Tallow was neither covered by the description of goods in import licence nor by the list attached to the licences, that the Collector Customs, Bombay under the impugned order held that two licences were not valid for import of Beef Tallow and accordingly the goods were held to be liable for confiscation under Section 111(d) of the Customs Act; that the Collector, however, allowed the redemption of the confiscated goods on payment of redemption fine of Rs. 7,66,000/ -. The learned D.R. further submitted that though the Collector had correctly held the imports to be unauthorised and had correctly confiscated the goods, the quantum of fine in lieu of confiscation amounts to approximately 30% of the CIF price of the goods, that this does not wipe out the entire margin of profit which is estimated to be more than 100% of the CIF price; that further though the respondents had imported Beef Tallow in huge quantity in fragrant violation of the Import (Control) Order warranting severe penal action; that deterrent penalty is, therefore, required to be imposed on the respondents which is commensurate with the gravity of offence under Section 112 of the Customs Act. The learned SDR finally submitted that Beef Tallow was placed under appendix 8 w.e.f. 5 -6 -1981 with the issuance of Import Trade (Control) Public Notice No. 29/81; that both the licences were issued in March, 1982 i.e. after the canalisation of Beef Tallow and as such imposition of penalty is warranted in this case.

(3.) ON the other hand, Shri V.S. Nankani, learned Advocate, submitted that determination of redemption fine in lieu of confiscation is a discretion which is vested with the adjudicating authority and unless and until it can be shown that the discretion by the adjudicating authority was exercised improperly and illegally, it cannot be interfered. He further submitted that no evidence has been adduced by the Revenue to show the margin of profit in Beef Tallow in India; that as per the Review order passed by the CBEC, the margin of profit is estimated to be more than 100% which goes to show that even Reviewing authority was not sure about the margin of profit in India. He relied upon the decision in the case of Fancy Dyeing and Printing Works v. Collector of Customs, Bombay, 1997 (96) E.L.T. 329 wherein it was held that for the purpose of determining the quantum of redemption fine, the market price is necessary; that neither side could indicate what the price during the relevant period was, in the absence of which the Tribunal refused to interfere with the order in dispute. The learned Advocate submitted that imposition of penalty under Section 112 of the Customs Act is also discretionary and unless and until the finding of the adjudicating authority are held to be perverse, penalty cannot be imposed. He finally submitted that the import of Beef Tallow was free up to 5 -6 -1981 and it became canalised item only w.e.f. 5 -6 -1981; that the respondents had not concealed anything from the Department and there was no deliberate defiance of the law and as such penalty is not imposible on them. He relied upon the decision of the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa, 1978 (2) E.L.T. J 159 (SC) wherein it was held that the authority competent to impose penalty will be justified in refusing to impose penalty when there is a technical or venial breach of provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed in the statute.