Purity threshold and proportionality govern confiscation, redemption fine, and penalty for imported gold dore bars.

Imported gold dore bars were assessed against a prescribed purity threshold under the import licence, and goods found outside that threshold were treated as liable to confiscation with re-export permitted. For Gold Dore Bar No. 1, confiscation and re-export were sustained, but the redemption fine was reduced as disproportionate to the limited valuation discrepancy. For Gold Dore Bar No. 2 and the tin package, the test reports did not establish breach of the purity condition, so confiscation under the package-confiscation rule was set aside. The penalty was also reduced to reflect the narrow extent of the proven infraction.

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Issues: (i) whether Gold Dore Bar No. 1, found to exceed the purity limit under the import licence, was liable to confiscation and whether the redemption fine for permitting re-export required reduction; and (ii) whether Gold Dore Bar No. 2 and the tin package were liable to confiscation under the package-confiscation rule and whether the penalty required reduction.

Issue (i): whether Gold Dore Bar No. 1, found to exceed the purity limit under the import licence, was liable to confiscation and whether the redemption fine for permitting re-export required reduction.

Analysis: The imported gold dore bars were eligible for the concessional notification only if the purity was below the prescribed limit. On the test reports, Bar No. 1 was treated as falling outside the licence condition, so confiscation and permission to re-export were sustained. However, the adjudged redemption fine was found to be disproportionate to the differential value involved. The valuation dispute did not justify a fine of the magnitude imposed when the alleged undervaluation was comparatively small.

Conclusion: Confiscation and re-export permission for Bar No. 1 were upheld, but the redemption fine was reduced to Rs. 50,000.

Issue (ii): whether Gold Dore Bar No. 2 and the tin package were liable to confiscation under the package-confiscation rule and whether the penalty required reduction.

Analysis: The available test reports did not establish that Bar No. 2 crossed the purity threshold, and the record did not justify treating it as a prohibited import. Since the confiscation of Bar No. 2 and the tin package rested on the package-confiscation provision, that confiscation was set aside. The penalty also had to be aligned with the limited valuation discrepancy, and the originally imposed amount was considered excessive.

Conclusion: Confiscation of Bar No. 2 and the tin package was set aside, and the penalty was reduced to Rs. 10,000.

Final Conclusion: The order of adjudication was sustained only to the extent of the confiscation and re-export arrangement for Bar No. 1, while the monetary consequences were substantially diluted and the confiscation of Bar No. 2 and the tin package was removed.

Ratio Decidendi: Where import eligibility turns on a prescribed purity threshold, confiscation may be sustained for goods found outside that threshold, but redemption fine and penalty must remain commensurate with the proven infraction and valuation discrepancy, and package confiscation cannot survive where the underlying substantive contravention is not established.

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