Import policy breach through re-export of used moulds justified confiscation, while redemption fine was reduced and penalty deleted.

Imported old moulds were found to be disposed of and re-exported without prior permission, and the procedural restriction in para 2.3 of the Handbook of Procedure was applied without distinguishing between domestic sale and re-export. On that basis, the import policy breach justified confiscation. The monetary consequences were treated more leniently: the redemption fine was reduced as excessive, and the penalty was set aside because the facts did not warrant penal action.

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Issues: (i) Whether the import and subsequent re-export of old moulds, in the absence of prior permission, amounted to violation of the Import and Export Policy and Handbook of Procedure, justifying confiscation; (ii) whether redemption fine and penalty were warranted on the facts.

Issue (i): Whether the import and subsequent re-export of old moulds, in the absence of prior permission, amounted to violation of the Import and Export Policy and Handbook of Procedure, justifying confiscation.

Analysis: The imported moulds were admittedly sold and re-exported after a period of use or attempted use. The relevant procedural restriction in para 2.3 of the Handbook of Procedure was held to operate without drawing a distinction between sale within India and sale outside India. On that basis, the transaction was found to be in breach of the import policy framework.

Conclusion: The confiscation of the goods was upheld, against the assessee.

Issue (ii): Whether redemption fine and penalty were warranted on the facts.

Analysis: While confiscation was sustained, the circumstances were treated as mitigating for monetary consequences. The redemption fine was considered excessive and reduced, and the record did not justify penal action.

Conclusion: The redemption fine was reduced and the penalty was set aside, in favour of the assessee.

Final Conclusion: The decision sustained confiscation for breach of the import policy, but granted partial relief by reducing the redemption fine and deleting the penalty.

Ratio Decidendi: A procedural restriction in the Handbook of Procedure governing disposal of imported capital goods can apply to re-export as well as domestic sale, but monetary penalties may be moderated or declined where the facts justify leniency.

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