Discretionary redemption fine and penalty under Customs law upheld where reductions were not shown to be arbitrary or perverse.

Where the Customs Act fixes only the maximum limit for redemption fine under Section 125 and penalty under Section 112(a), the Tribunal may lawfully reduce the quantified amounts within its discretion. The Madras HC held that interference is warranted only if the exercise of discretion is shown to be arbitrary, whimsical, perverse, or causing miscarriage of justice. As the Tribunal followed its earlier percentage-based approach and no material showed arbitrary reduction, the fine and penalty were upheld and no substantial question of law arose in favour of the Revenue.

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Issues: Whether the Tribunal was justified in reducing the redemption fine and penalty imposed on importers of restricted second-hand photocopiers under the Customs Act.

Analysis: The statutory scheme under Section 125 of the Customs Act, 1962 permits redemption fine up to the market price of the confiscated goods less duty, and therefore leaves discretion to impose a lower amount. Section 112(a) of the Customs Act, 1962 likewise prescribes only the ceiling for penalty. The Tribunal followed its own earlier decisions fixing redemption fine and penalty at percentages of the value of the goods, and no material was shown to establish that the reduction was arbitrary, whimsical, or caused miscarriage of justice. In such matters, appellate interference is warranted only where a substantial question of law arises from a demonstrably arbitrary exercise of discretion.

Conclusion: The reduction of redemption fine and penalty by the Tribunal was upheld, and no substantial question of law arose in favour of the Revenue.

Final Conclusion: The appeals failed because the quantum of redemption fine and penalty remained within the discretionary limits prescribed by the Customs Act and did not justify interference.

Ratio Decidendi: Where the statute fixes only the maximum limit of redemption fine or penalty, the appellate forum will not interfere with the quantified amount unless the exercise of discretion is shown to be arbitrary or perverse and giving rise to a substantial question of law.

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