Mandatory MRP labelling breach can sustain confiscation, but penalties require proportionality and proof of culpable involvement.

Goods intercepted after customs clearance but before removal for home consumption were liable to confiscation where they lacked mandatory MRP labelling under the Legal Metrology regime, and the explanation that stickers were ready to be affixed was rejected. The redemption fine and importer's penalty were reduced because the breach was confined to the labelling lapse and the original monetary sanctions were excessive. Penalty on the customs house agent was set aside because there was no material showing wilful abetment, connivance, or any act or omission making the goods liable to confiscation; a licensing lapse alone was insufficient for Customs Act penalty.

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Issues: (i) Whether confiscation of 3950 cell phones for non-compliance with mandatory labelling requirements under the Legal Metrology regime was sustainable; (ii) whether the redemption fine and penalty imposed on the importer required reduction; (iii) whether penalty imposed on the customs house agent was sustainable.

Issue (i): Whether confiscation of 3950 cell phones for non-compliance with mandatory labelling requirements under the Legal Metrology regime was sustainable.

Analysis: The goods had been cleared by customs and were intercepted before removal for home consumption. On the facts, the goods would have been removed without the mandatory MRP labelling. The explanation that stickers were ready to be affixed after examination was rejected. The goods were therefore liable to confiscation for breach of the legal metrology requirements.

Conclusion: Confiscation of the 3950 cell phones was upheld.

Issue (ii): Whether the redemption fine and penalty imposed on the importer required reduction.

Analysis: Although confiscation was sustained, the principal infraction was limited to absence of MRP stickers. In the circumstances, the amount of redemption fine and the penalty on the importer were considered excessive and were scaled down to meet the ends of justice.

Conclusion: The redemption fine was reduced from Rs. 12,75,000/- to Rs. 6,00,000/- and the penalty on the importer was reduced from Rs. 7,00,000/- to Rs. 3,00,000/-.

Issue (iii): Whether penalty imposed on the customs house agent was sustainable.

Analysis: No material was shown to establish wilful abetment, connivance, or any act or omission by the customs house agent rendering the goods liable to confiscation. Any lapse relevant only to licensing discipline could not justify penalty under the Customs Act.

Conclusion: The penalty imposed on the customs house agent was set aside.

Final Conclusion: The confiscation was maintained, monetary liabilities were reduced for the importer, and the penalty on the customs house agent was annulled, resulting in a partial allowance of the appeals.

Ratio Decidendi: Goods intercepted after customs clearance but before removal for home consumption can still be confiscated for breach of mandatory import compliance requirements, while penalty under the Customs Act requires proof of culpable involvement.

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