Actual user condition breach bars local sale of imported machines and supports confiscation, fine, and penalty.

Imports made under an actual user condition cannot be transferred or sold in the local market in breach of the import declaration. Where the record shows that the importer controlled multiple name-lender firms and disposed of the machines contrary to the policy restriction, the contravention is established and the claim that sales were only to other actual users may be rejected for lack of evidence. Goods sold in breach of the condition, and even seized goods linked to the same disposal scheme, may be liable to confiscation; redemption fine and penalty are sustainable where the breach is deliberate and the fine is proportionate.

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Issues: (i) Whether the imported second-hand printing machines were sold in violation of the actual user condition under the EXIM Policy; (ii) whether the machines sold and the machines seized were liable to confiscation and whether redemption fine and penalty were sustainable.

Issue (i): Whether the imported second-hand printing machines were sold in violation of the actual user condition under the EXIM Policy.

Analysis: The import was made against declarations that the machines would be used by the importing firms themselves and would remain subject to the actual user condition. The record showed that the appellant floated multiple firms through relatives and friends as name-lenders, controlled the imports, and thereafter sold a large number of machines in the local market. The explanation that the sales were to other actual users was not supported by evidence and was rejected as inconsistent with the import declarations and the policy restriction against transfer or sale.

Conclusion: The actual user condition was violated and the finding of contravention was upheld against the assessee.

Issue (ii): Whether the machines sold and the machines seized were liable to confiscation and whether redemption fine and penalty were sustainable.

Analysis: The sold machines had become liable to confiscation under the customs provisions because they were cleared conditionally and then disposed of contrary to the policy. The seized machines were also held liable because the surrounding circumstances showed that they were not intended for installation at the declared premises and were part of the same scheme of disposal. The quantum of redemption fine was found to be reasonable, being a small fraction of the assessable value, and the penalty was also sustained in view of the deliberate nature of the breach.

Conclusion: Confiscation, redemption fine, and penalty were all upheld against the assessee.

Final Conclusion: The appeal failed in full, and the order confirming confiscation of the goods along with redemption fine and penalty was sustained.

Ratio Decidendi: Goods imported under an actual user condition cannot be lawfully transferred or sold in the local market, and where the surrounding circumstances show deliberate contravention, confiscation, redemption fine, and penalty are sustainable.

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