2003 (10) TMI 502 - AT - Customs

Appeal reduces fine on air-compressor importer, citing precedent judgment.

The appeal was lodged against the order of the Collector (Appeals) confirming the confiscation of imported air-compressors by the appellant under Section ... Confiscation of imported goods - redemption fine - discretionary reduction of fine - licence-based importability under Paragraph 176 of the Import Policy 1978-79 - effect of subsequent judicial decisions on prior transactions - doctrine of parity in administrative discretionConfiscation of imported goods - redemption fine - Confiscation affirmed but redemption permitted on payment of a reduced fine. - HELD THAT: - The appellate order confirms that the importation was unauthorised and that confiscation under the statute was proper, while recognising that redemption by payment of a fine is an available remedy. The Counsel for the appellant conceded unauthorised importation but sought reduction of the fine on the ground that the appellant had entered into an irrevocable commitment (letter of credit) relying on the then-prevailing view of the law and on licences issued under Paragraph 176 of the Import Policy 1978-79, and that subsequent judicial clarification altered the legal position. The Tribunal applied its discretionary power to modify the quantum of the redemption fine in view of the appellant's factual position and prior decisions of other Benches which, after considering the intervening Supreme Court decisions, had reduced fines in similar circumstances. The Tribunal found that while confiscation stands, the fine as imposed by the Collector (Appeals) required moderation.Confiscation upheld; redemption fine reduced to Rs. 80,000 in each appeal.Discretionary reduction of fine - effect of subsequent judicial decisions on prior transactions - doctrine of parity in administrative discretion - Exercise of discretion in fixing the redemption fine must be fair, reasonable and consistent with decisions in similar cases; parity requires like treatment of similarly placed appellants. - HELD THAT: - The Tribunal emphasised that although the quantum of the redemption fine is within departmental discretion, such discretion must be exercised fairly and reasonably. Given that other Benches of the Tribunal, after examining the relevant Supreme Court pronouncements, had reduced fines in comparable cases - including a reduction in the appellant's own related appeal - it would be inappropriate to treat the present appellant differently absent distinguishing facts. The Tribunal therefore invoked the principle of parity and consistent administrative exercise of discretion to justify reducing the fine to the level fixed by those earlier decisions.Discretion exercised to reduce the redemption fine to Rs. 80,000 in each case to accord parity and reasonable exercise of discretion.Final Conclusion: Confiscation of the imported air-compressors is confirmed, redemption remains available, and the redemption fine imposed by the Collector (Appeals) is reduced to Rs. 80,000 in each appeal in the exercise of fair and consistent administrative discretion. Issues:1. Appeal against order of Collector (Appeals) confirming confiscation of imported air-compressors under Section 111 of the Act.2. Contention for reduction of fine imposed on the appellant.3. Interpretation of Supreme Court judgments regarding importability of goods.4. Exercise of discretion in determining redemption fine.Analysis:1. The appeal was lodged against the order of the Collector (Appeals) affirming the confiscation of air-compressors imported by the appellant under Clause (d) of Section 111 of the Act. The Collector allowed redemption of the goods upon payment of fines amounting to Rs. 1.75 lakh and Rs. 1.80 lakh in separate appeals.2. The appellant's Counsel acknowledged the unauthorized importation but argued for a reduction in the fine imposed. The appellant had initiated the import process based on a firm commitment made on 20-2-1986, supported by a letter of credit. The appellant believed the goods were importable due to a previous Supreme Court judgment. However, subsequent clarifications by the Supreme Court altered this understanding. Previous decisions by other Benches of the Tribunal had reduced fines in similar cases, including the appellant's own case in appeal 767/88.3. The departmental representative contended that the Supreme Court's judgment in Raj Parkash Chemicals Ltd. & Another v. Union of India indicated that license holders were cautioned about the importability of restricted items. The representative argued that a different interpretation could have been adopted after October 19, 1985. Therefore, the department saw no justification for leniency in this case.4. While acknowledging the discretionary nature of determining redemption fines, it was emphasized that such discretion must be exercised fairly and reasonably. Given that previous Tribunal Benches had reduced fines after considering the Supreme Court's judgment, it was deemed inappropriate to treat the appellant differently from others in a similar position. Therefore, following the precedent set by earlier decisions, the fine imposed on the appellant was reduced to Rs. 80,000 in each case.