Provisional assessment and duty payment during pending classification approval do not justify penalty absent deliberate violation.

Penalty was unsustainable where the classification lists were still unapproved and the assessments therefore remained provisional. Duty paid during the pendency of approval, in compliance with the Department's insistence, did not amount to a deliberate breach or contumacious default. On those facts, penal consequences were not warranted, and the penalty was set aside.

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Issues: Whether penalty was sustainable when the classification lists had not yet been approved, the assessments were therefore provisional, and the duty had been paid during the pendency of approval at the Department's insistence.

Analysis: The classification lists remained unapproved, so the assessments were to be treated as provisional. Payment of duty made pending finalisation and in compliance with the Department's objection could not be treated as a deliberate breach of the rules. The conduct of the assessee showed obedience to departmental instructions rather than contumacious default, and no basis existed for invoking penal consequences.

Conclusion: The penalty was not justified and was set aside.

Ratio Decidendi: Where duty is paid pending approval of classification lists in a provisional assessment regime and there is no deliberate violation, penalty cannot be imposed merely because clearance occurred before final approval.

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