Undervaluation and misdeclaration in imports can justify higher redemption fine and a deterrent penalty.

Undervaluation and misdeclaration of imported goods justified enhancement of redemption fine and penalty where the importer had knowingly underdeclared the value of the catalyst and the record showed mala fides. The original amounts were considered disproportionate to the gravity of the lapse and the duty involved, so a higher redemption fine was treated as appropriate. The penalty was also required to serve a deterrent purpose. On that basis, the redemption fine and penalty were increased.

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Issues: Quantum of redemption fine and penalty for undervaluation and misdeclaration of imported goods.

Analysis: The importer had underdeclared the value of the catalyst and the order under challenge recorded knowing misdeclaration and mala fides. The original fine and penalty were found to be out of commensuration with the gravity of the lapse and the duty involved. A higher redemption fine was considered appropriate, and the penalty was required to have a deterrent effect.

Conclusion: The redemption fine and penalty were enhanced to Rs. 18 lakhs and Rs. 4 lakhs respectively.

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