Clandestine importation can justify confiscation and penalty on probabilities, but manifest duties remain with the conveyance operator.

Polyester fibre imported in place of declared wool waste and viscose staple fibre was treated as liable to confiscation under the Customs Act for breach of import control restrictions, while the manifest omission could not be attributed to the importer because that duty rests on the person in charge of the conveyance. Penal liability was also upheld on a preponderance of probabilities from the surrounding circumstances, even without direct proof of collusion. The redemption fine and personal penalty were reduced because prolonged detention and demurrage made the original amounts excessive.

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Issues: (i) Whether the polyester fibre found in the consignments was liable to confiscation for having been imported contrary to the import control restrictions and without proper declaration in the import manifest. (ii) Whether the importers could be visited with penalty under the Customs Act for the alleged wrongful importation. (iii) Whether the redemption fine and personal penalty imposed by the adjudicating authority required reduction.

Issue (i): Whether the polyester fibre found in the consignments was liable to confiscation for having been imported contrary to the import control restrictions and without proper declaration in the import manifest.

Analysis: The importers had ordered wool waste and viscose staple fibre, but a substantial part of the consignments was found to be polyester fibre, which was not covered by the import arrangement applicable to the actual users. The Court accepted that the importation of polyester fibre was unauthorised and upheld confiscability under the prohibition-related provision. At the same time, it held that the omission in the import manifest could not be fastened on the importers under the provision governing the manifest, because that obligation rested on the person-in-charge of the conveyance and not on the importer.

Conclusion: The polyester fibre was liable to confiscation under Section 111(d) of the Customs Act, 1962, but not on the basis of Section 111(f) of the Customs Act, 1962 against the importer.

Issue (ii): Whether the importers could be visited with penalty under the Customs Act for the alleged wrongful importation.

Analysis: Although direct evidence of collusion was lacking, the surrounding circumstances, including the nature of the consignments, the correspondence not followed by effective legal action, and the improbability of identical mistakes by different suppliers, were treated as sufficient on a preponderance of probabilities. The Court applied the settled principle that in cases of clandestine importation the department is not required to prove its case with mathematical precision, and held that the importers' conduct attracted penal liability.

Conclusion: Penalty under Section 112 of the Customs Act, 1962 was leviable against the importers.

Issue (iii): Whether the redemption fine and personal penalty imposed by the adjudicating authority required reduction.

Analysis: The goods had remained under detention for a long period, causing substantial demurrage, and the Court considered that the quantum of fine and penalty originally imposed was excessive in the circumstances. While maintaining the confiscation and the existence of penal liability, it reduced both the redemption fine and the personal penalty to more moderate amounts.

Conclusion: The redemption fine and personal penalty were reduced.

Final Conclusion: The appeals succeeded only to the limited extent of reduction in fine and penalty, while the confiscation and the finding of culpability were maintained.

Ratio Decidendi: In cases of suspected clandestine importation, confiscation and penalty may be upheld on a preponderance of probabilities from surrounding circumstances, but the manifest obligation under the Customs law cannot be attributed to the importer; quantum of fine and penalty may be moderated where detention and demurrage make the original amounts excessive.

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