Technical breach in import compliance cannot justify penalty where transaction is bona fide and no real prejudice is shown.

A penalty for not furnishing the Exchange Control copy of the Bill of Entry was unsustainable where the import transaction was bona fide, the goods import and banking remittance were established, and the only lapse was failure to produce the original copy within the stipulated time. The omission was treated as a procedural irregularity, not a substantive contravention, and penalty was held to be discretionary and inappropriate for a technical or venial breach absent dishonest intent or real prejudice. The penalty was therefore set aside.

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Issues: Whether a penalty could be sustained for non-furnishing of the Exchange Control copy of the Bill of Entry where the import transaction was genuine and the lapse was only procedural.

Analysis: The transaction was found to be genuine, and the materials furnished established import of the goods and remittance through normal banking channels. The only default was failure to produce the original Exchange Control copy of the Bill of Entry within the stipulated time under paragraph 7A.20 of the Exchange Control Manual. In such circumstances, the omission was treated as a procedural irregularity rather than a substantive contravention. Penalty, even where legally permissible, is a matter of judicial discretion and is not to be imposed for a technical or venial breach, particularly where the breach is not shown to involve any dishonest intent or real prejudice.

Conclusion: The penalty was not justified and was set aside; the petition was allowed.

Ratio Decidendi: A penalty should not be imposed for a merely technical or venial breach when the transaction is bona fide and the default is only procedural.

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