Redemption fine and penalty in customs imports must reflect market value, margin of profit, and factual assessment.

In customs matters, redemption fine and personal penalty must be fixed on a proper factual basis, including market value, margin of profit, and relevant charges such as demurrage or detention. Where the original adjudication makes no proper market verification and the quantum appears arbitrary, a reduced fine and penalty may be supported on appeal. The document notes that import of used tyres was treated as contrary to DGFT Notification No. 2(RE-2006) 2004-2009, but the appellate reduction was upheld because the record indicated only a nominal margin of profit and inadequate enquiry into the appropriate quantum.

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Issues: Whether the Commissioner (Appeals) was justified in reducing the redemption fine and personal penalty imposed on the import of used tyres in the absence of proper market verification and determination of margin of profit.

Analysis: The import was found to be in violation of DGFT Notification No. 2(RE-2006) 2004-2009 dated 07-04-2006, but the original adjudication had imposed redemption fine and penalty without proper enquiry into market value, margin of profit, or the effect of demurrage and detention charges. The documentary material produced indicated that the margin of profit was nominal, and the quantum of fine and penalty was found to have been fixed arbitrarily. Since the levy of redemption fine and penalty is discretionary and must be commensurate with the facts and circumstances, the reduction ordered in appeal was supported by the record.

Conclusion: The reduction of redemption fine and penalty by the Commissioner (Appeals) was upheld, and the revenue's challenge failed.

Final Conclusion: The appellate order affirming the reduced fine and penalty remained undisturbed, leaving the importer with the benefit of the reduced liabilities.

Ratio Decidendi: Redemption fine and penalty in customs matters are discretionary and must be based on proper factual assessment, including market value and margin of profit; where such assessment is lacking, interference with an excessive quantum is not warranted.

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