Subsequent compliance with import conditions justified waiver of redemption fine and reduction of customs penalty.

Subsequent compliance with the import requirement and later production of the necessary certificate led the tribunal to treat the original breach in the clearance of used capital goods as mitigated. As the certificate had been obtained and the initiating letter was said to have been superseded, and considering the continued availability of the consignment and demurrage hardship, the full redemption fine was not sustained. The contravention was nevertheless recognised, so the penal consequence was only moderated, with the redemption fine waived and the penalty under the Customs Act reduced.

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Issues: Whether, in view of subsequent compliance with the import requirement and production of the necessary certificate, the redemption fine and penalty imposed for import of used capital goods without the required relaxation or no objection certificate were liable to be waived or reduced.

Analysis: The imported goods were treated as being in breach of the foreign trade policy requirement governing clearance of used off-highway construction equipment. However, the required certificate was subsequently obtained and placed before the Department, and the letter on which the proceedings were initiated was stated to have been superseded. In these circumstances, and keeping in view the continued availability of the consignment and the hardship caused by demurrage, the basis for maintaining the full redemption fine was found no longer persuasive. At the same time, the contravention was not ignored altogether and only the penal consequence was moderated.

Conclusion: The redemption fine was waived and the penalty under Section 112(a) of the Customs Act, 1962 was reduced to Rs. 25,000/-.

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