Customs penalty discretion must be exercised evenly; penalty sustained in principle but reduced for unequal treatment.

Allowing third-party misuse of an import export code, rubber stamp and letterheads attracted liability under the Customs Act's confiscatory and penalty scheme, and the appellant could not avoid penalty in principle. However, the penalty discretion under Section 114 had to be exercised evenly and on sound lines; where similarly placed persons were fined less and no special malicious intent was attributable solely to the appellant, the higher amount was not justified. The penalty was therefore sustained but reduced to align with the comparable penalties imposed on others.

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Issues: Whether the penalty imposed on the appellant under the Customs Act, 1962 for allowing misuse of his import export code and related firm materials was justified in quantum.

Analysis: The goods attempted to be exported attracted the prohibition-based confiscatory scheme under Section 113(d) and the consequential penalty provision under Section 114 of the Customs Act, 1962. The Court accepted that the appellant had permitted third-party use of his IEC, rubber stamp and letterheads, and therefore the liability to penalty could not be avoided. However, the authorities had imposed a penalty of Rs. 1,00,000 on the appellant while similarly placed persons were penalised only Rs. 50,000. Since Section 114 vests discretion in the adjudicating authority, that discretion had to be exercised evenly and on sound lines. In the absence of any special malicious intent attributable solely to the appellant, the higher penalty was held to be unjustified.

Conclusion: The penalty was upheld in principle, but reduced from Rs. 1,00,000 to Rs. 50,000.

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