Redemption fine on re-exported confiscated goods is unsustainable; proportionate Customs penalty reduced.

Confiscated imported maize found non-compliant with food safety standards was ordered to be re-exported, and the redemption fine imposed solely to enable re-export was held unsustainable and deleted. The Tribunal also held that, although the adverse finding against the importer was maintained, the Customs Act penalty should be proportionate to the facts and circumstances, so the original penalty was reduced. The approach follows earlier orders treating redemption fine as not retainable where re-export is directed. The importer's challenge therefore succeeded in part, with the fine set aside and the penalty substantially scaled down.

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Issues: (i) Whether the redemption fine imposed on confiscated imported goods directed to be re-exported was sustainable; (ii) Whether the penalty imposed on the importer under the Customs Act required modification.

Issue (i): Whether the redemption fine imposed on confiscated imported goods directed to be re-exported was sustainable.

Analysis: The imported maize was found not to conform to the prescribed food safety standards and was ordered to be confiscated with an option of re-export on payment of redemption fine. Following the Tribunal's consistent view in similar matters, the fine imposed only for enabling re-export was held to be not sustainable. The earlier decisions relied upon had taken the view that where re-export is directed, redemption fine cannot be retained.

Conclusion: The redemption fine was set aside and deleted.

Issue (ii): Whether the penalty imposed on the importer under the Customs Act required modification.

Analysis: In the facts of the case, while upholding the adverse finding against the importer, the Tribunal considered the penalty to be capable of being scaled down on a proportionate basis. Applying the same approach as in earlier orders, the original penalty was reduced to a lesser amount.

Conclusion: The penalty was modified and reduced to Rs. 1,25,000/-.

Final Conclusion: The importer's challenge succeeded in part, with the redemption fine removed and the penalty substantially reduced.

Ratio Decidendi: When confiscated goods are permitted to be re-exported, redemption fine imposed solely for such re-export cannot be sustained, and any penalty must be proportionate to the facts and circumstances.

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