Import licence restriction on second-hand photocopiers justified enhanced redemption fine and penalty under Customs law.

Import of second-hand photocopiers after the Foreign Trade Policy amendment requiring a specific licence was treated as unauthorised, and a plea of bona fide belief was rejected because the restriction was express. In fixing redemption fine under the Customs Act, the Tribunal held that a market enquiry was not the relevant basis for second-hand machines; instead, a reasonable benchmark linked to the enhanced value could be applied. On that basis, the redemption fine and penalty were found to be below the comparable benchmark and were enhanced accordingly.

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Issues: Whether, in cases of import of second-hand photocopiers without the requisite licence, the redemption fine and penalty imposed under the Customs Act required enhancement.

Analysis: The imports were made after the amendment to para 2.17 of the Foreign Trade Policy (2004-09), under which second-hand photocopier machines were no longer freely importable and could be brought in only against a specific licence. The plea of bona fide belief was unavailable because the amended policy expressly prohibited such imports without licence. In determining the quantum of redemption fine under Section 125 of the Customs Act, the relevant consideration was not a market enquiry in the case of second-hand machines, but a reasonable approximation of the margin involved. The Tribunal followed the benchmark adopted in similar matters, fixing redemption fine at about 15% of the enhanced value and penalty at about 5% of the value, and held that the fines and penalties originally imposed were, in most cases, below that benchmark.

Conclusion: The redemption fine and penalty were required to be enhanced, and the orders of the Commissioner were modified accordingly, with the appeals allowed to that extent.

Final Conclusion: The decision upheld confiscability and liability to penalty for unauthorised import of second-hand photocopiers, while revising the monetary sanctions upward on a benchmark basis.

Ratio Decidendi: Where goods are imported in violation of an express licensing restriction under the foreign trade policy, bona fide belief is unavailable, and redemption fine and penalty may be fixed by adopting a reasonable benchmark linked to the enhanced value of the goods.

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