Import policy breach for second-hand machines sustained only for identified goods; penalty failed for lack of culpable knowledge.

Imported second-hand machines were required under the prevailing import policy to be under seven years old and to have at least five years' residuary life. On the evidence, only one machine had conclusive proof of manufacture in 1969, so confiscation was sustainable only for that identified machine and was set aside for the remaining nine. As to penalty, the Department failed to prove that the appellants had the required knowledge, understanding, or reasonable belief that the goods were liable to confiscation, so no penalty could be imposed.

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Issues: (i) Whether the imported second-hand machines satisfied the Open General Licence conditions relating to age and residuary life, and to what extent confiscation was sustainable; (ii) Whether penalty was warranted on the facts proved.

Issue (i): Whether the imported second-hand machines satisfied the Open General Licence conditions relating to age and residuary life, and to what extent confiscation was sustainable.

Analysis: The import policy applicable at the time required such machines to be less than seven years old and to have a residuary life of not less than five years. On the evidence, only one machine had conclusive proof of manufacture in 1969, while the remaining nine machines lacked conclusive proof of their year of manufacture. The OGL condition was therefore established only in respect of the identified machine, and the material did not justify confiscation of the other nine machines.

Conclusion: Confiscation was upheld only for the machine bearing Sl. No. 2411731983, while confiscation of the remaining nine machines was set aside.

Issue (ii): Whether penalty was warranted on the facts proved.

Analysis: The Department did not discharge the burden of proving that the appellants had the requisite understanding, knowledge, or reasonable belief that the goods were liable to confiscation. In the absence of such proof, imposition of penalty was not justified.

Conclusion: The penalty was set aside in full.

Final Conclusion: The order of confiscation was sustained only in part, the redemption fine was reduced proportionately, and the penalty was wholly annulled.

Ratio Decidendi: Where import conditions are proved to be breached only for identified goods, confiscation can be sustained only to that extent, and penalty cannot be imposed unless the requisite culpable knowledge or belief is affirmatively established.

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