Import licence breach upheld for confiscation, but selective penalty on one signatory was set aside for inconsistency.

Confiscation of imported zip fasteners and penalty on the firm were upheld because the goods were brought in without a valid import licence, the bill of entry disclosed no licence number, and the defence of lack of consent was unsupported; the later request to produce a licence or re-export the goods was rejected because the import was clandestine and no valid licence existed when import was made. The penalty on the authorised signatory under Section 112 of the Customs Act was, however, set aside because the record showed several persons were equally involved, yet only one was penalised without a coherent basis. The result was partial relief: the firm's liability remained, but the individual penalty failed.

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Issues: (i) Whether the confiscation of the imported zip fasteners and the penalty on the firm were sustainable when the goods were imported without a valid import licence under the import-control regime. (ii) Whether the penalty imposed on the authorised signatory under Section 112 of the Customs Act, 1962 was sustainable.

Issue (i): Whether the confiscation of the imported zip fasteners and the penalty on the firm were sustainable when the goods were imported without a valid import licence under the import-control regime.

Analysis: The evidence showed that the shipment had been negotiated and finalised by the concerned persons, that freight and haulage charges had been paid, and that the bill of entry was filed without disclosing any licence number. The defence that the goods were sent without consent was rejected for want of supporting correspondence. The request to produce a licence later or to re-export was also rejected because the import was found to be clandestine and no valid licence existed at the relevant time. The assessable value accepted by the adjudicating authority matched the value declared in the bill of entry, so no further discount was warranted.

Conclusion: The confiscation and the penalty imposed on the firm were upheld, and that part of the appeal failed.

Issue (ii): Whether the penalty imposed on the authorised signatory under Section 112 of the Customs Act, 1962 was sustainable.

Analysis: The material on record showed that the authorised signatory was actively involved in the import transaction, had knowledge of the goods, and was doing the entire work of the firm. The provision governing penalty applied to any person whose act or omission rendered the goods liable to confiscation, but the majority found that the adjudicating authority had treated all the brothers as equally involved while penalising only one of them. In those circumstances, the selective imposition of penalty on the authorised signatory alone was not justified.

Conclusion: The penalty on the authorised signatory was set aside, and that part of the appeal succeeded.

Final Conclusion: The appeal of the firm did not succeed, but the appeal of the authorised signatory succeeded, resulting in partial relief to the appellants.

Ratio Decidendi: In a penalty proceeding under Section 112 of the Customs Act, 1962, liability depends on the person's act or omission rendering the goods liable to confiscation, but where the adjudicating authority finds several persons equally involved and penalises only one without a coherent basis, selective penalty may be unsustainable.

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