Accepted OGL imports barred personal penalties; redemption fine was reduced after a later policy interpretation change.

Imports made under an accepted OGL practice could not attract personal penalties when the adverse DGFT clarification and Revenue's contrary interpretation arose only after the consignments were imported. On those facts, deliberate contravention was not made out, so the personal penalties were set aside. Confiscation was left undisturbed, but the redemption fine was reduced because confiscability stemmed from a later change in policy interpretation and the original fine was considered excessive.

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Issues: (i) Whether personal penalties were sustainable where the goods had been imported under OGL and the DGFT clarification came after the imports; (ii) Whether the redemption fine imposed on confiscation required reduction in view of the change in the Revenue's interpretation.

Issue (i): Whether personal penalties were sustainable where the goods had been imported under OGL and the DGFT clarification came after the imports.

Analysis: The import had been made when similar consignments were earlier being cleared under OGL without objection. The doubt regarding the nature of the goods arose later, and the DGFT clarification was issued after the consignments in question had already been imported. In that situation, the import could not be treated as involving a deliberate contravention warranting penal action.

Conclusion: The personal penalties were not sustainable and were set aside in favour of the assessee.

Issue (ii): Whether the redemption fine imposed on confiscation required reduction in view of the change in the Revenue's interpretation.

Analysis: Confiscation and the option of redemption fine flowed from the Revenue's later view that the goods required a licence. Since the confiscability arose from a subsequent change in interpretation of the import policy, the fine was considered excessive on the facts of the case and required moderation.

Conclusion: The redemption fine was reduced to 50% of the amount imposed, partly in favour of the assessee.

Final Conclusion: The appeal succeeded to the extent of deletion of personal penalties and partial reduction of redemption fine, while confiscation itself was not interfered with.

Ratio Decidendi: Where imports were effected under a previously accepted OGL practice and the adverse interpretation arose only later, penal consequences are not justified and redemption fine may be moderated if confiscability results from a subsequent change in policy interpretation.

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