Bona fide personal import of a used diesel engine could not support penalty or redemption fine without mala fide conduct and market valuation.

Import of an old, used second-hand diesel engine received as a bona fide gift for personal use did not justify penalty or redemption fine. The record showed no commercial purpose or foreign exchange involvement, and the penal provisions were treated as requiring mala fide conduct, which was not established. Redemption fine was also unsustainable because the market price of the goods had not been determined, although that determination was necessary before imposing fine. On the facts accepted by the lower authority, the quantum of both fine and penalty was not supported, and both were set aside.

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Issues: Whether penalty and redemption fine were sustainable in respect of import of an old and used second-hand diesel engine received as a bona fide gift for personal use.

Analysis: The import was found to be for personal use, not for commercial purpose, and without foreign exchange involvement. In such facts, penal consequences under the Customs Act were held to arise only where the conduct bears the character of mala fide, and no such element was made out. For redemption fine, the record contained no determination of the market price of the goods, though such determination was necessary for imposing fine under the relevant provision. The circumstances accepted by the lower authority also did not justify the quantum of fine and penalty that had been sustained.

Conclusion: The penalty and redemption fine were not justified and were set aside.

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