CIF-based import condition breach sustains confiscation and penalty, while redemption fine must be fixed on a rational factual basis

Importing marble below the stipulated CIF value threshold breached the applicable free-import condition, so confiscation and penalty were sustainable even though the importer offered to pay duty on a notional higher value. The quantum of redemption fine and penalty, however, had to rest on a rational basis tied to the facts of each appeal. One appeal retained the Tribunal's substantial relief because no further reduction was warranted, while the other required downward modification because the profit-element basis used to estimate the fine was not supported by the record.

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Issues: Whether import of marble below the stipulated CIF value threshold justified confiscation and penalty, and how the redemption fine and penalty were to be quantified.

Analysis: The import policy treated marble blocks or tiles as freely importable only where the CIF value was at least USD 50 per square meter. The assessee's declared value was below that threshold, and the offer to pay duty on the notional higher value did not alter the fact that the goods were imported in breach of the applicable import condition. Confiscation and penalty were therefore sustainable. At the same time, the quantum of redemption fine and penalty had to be judged on the actual facts of each appeal. In one appeal, the Tribunal had already granted substantial relief and no further reduction was warranted. In the other, the basis adopted for estimating profit element for redemption fine was not supported by the record, and a lower figure was appropriate by applying a similar yardstick with suitable modification to the import value.

Conclusion: Confiscation and imposition of penalty were upheld, but the redemption fine and penalty were modified in one appeal; the other appeal remained dismissed.

Final Conclusion: The decision sustained the finding that imports in breach of the CIF-based import condition attracted confiscation and penalty, while limiting discretionary relief to a reduced monetary burden only in the appeal where the original quantification was found excessive.

Ratio Decidendi: Import made contrary to a free-import condition tied to CIF value is liable to confiscation and penalty, but the quantum of redemption fine and penalty must be assessed on a rational and supportable basis with reference to the facts of the particular import.

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