Deliberate misdeclaration must be proved before confiscation or penalty can stand on disputed import goods.

Confiscation and penalty for import misdeclaration require proof of deliberate or wilful conduct aimed at clearing wrong goods. The record did not show that the importers manipulated the transaction, had full knowledge of the polyester fibre shipment, or filed any deliberate misdeclaration, and they had informed Customs of the mix-up before clearance action. Mere suspicion or delay in the supplier's intimation was insufficient to establish the alleged contravention. On that basis, the confiscation and penalty were held unsustainable and were deleted.

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Issues: Whether the confiscation and penalty were sustainable when the importers had not filed a bill of entry and had asserted that the goods shipped were not as ordered.

Analysis: The material on record did not establish that the importers had manipulated the transaction or had full knowledge that polyester fibre had been shipped. The Department produced no document proving deliberate misdeclaration, and the record showed that the importers had informed the Customs authorities about the mix-up before any clearance action was taken. In these circumstances, the inference of an intentional attempt to import wrong goods could not be drawn merely from suspicion or delay in the supplier's intimation. The legal contravention alleged could arise only where there was wilful conduct aimed at unauthorised clearance, which was not proved here.

Conclusion: The confiscation and penalty were not sustainable and were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned adverse order was overturned in substance, resulting in deletion of the penalty and acceptance of the appellants' defence of lack of deliberate misdeclaration.

Ratio Decidendi: Where deliberate misdeclaration or wilful intent to import prohibited or wrong goods is not proved, confiscation and penalty cannot be sustained on mere suspicion.

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