Unauthorised import authorisation under a non-transferable licence sustained penalty, but the quantum was reduced for mitigating circumstances.

Liability under Section 112(a) of the Customs Act arose where importation was effected through an unauthorised authorisation against a non-transferable additional licence. Para 118(2) of the 1985-88 Import-Export Procedures barred an Export House from appointing an agent or issuing a letter of authority to operate such a licence or import goods without prior approval, so the authorisation used for the import was contrary to policy. The arrangement could not escape scrutiny merely because it was described as a power of attorney, since the executant remained involved in the unauthorised importation. The penalty was upheld, but the quantum was reduced in light of the circumstances.

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Issues: Whether the appellants were liable to penalty under Section 112(a) of the Customs Act, 1962 for importation made through an unauthorised authorisation against a non-transferable additional licence, and whether the penalty imposed required reduction.

Analysis: Section 112(a) fastens liability on any person concerned with importation who does or omits to do an act, or abets such act or omission, in relation to confiscable goods. Under Para 118(2) of the Hand Book of Import-Export Procedures, 1985-88, an Export House holding a non-transferable additional licence could not appoint an agent or issue a letter of authority for operating the licence or importing goods against it without prior permission of the competent authority. The authorisation given to the importer was therefore contrary to the import policy. The appellants could not avoid liability merely by describing the arrangement as a power of attorney, since the executant remained involved in the unauthorised importation. At the same time, the circumstances justified interference with the quantum of penalty.

Conclusion: The penalty under Section 112(a) was sustained, but the amount was reduced from Rs. 2 lakhs to Rs. 50,000, resulting in partial relief to the appellants.

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