Stock lot imports treated as disposal goods sustained confiscation for import policy breach, with redemption fine reduced on facts.

Goods described in the invoice as stock lots were treated in trade parlance as disposal goods, and therefore not as new goods required under the import policy. On that basis, import in breach of the policy attracted confiscation under Section 111(d) of the Customs Act, and the policy-violation finding was sustained. The redemption fine was moderated on the facts, with the actual user of the goods taken into account, and reduced from Rs. 1 lakh to Rs. 80,000. The substantive confiscability finding remained intact while only the fine was reduced.

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Issues: (i) whether imported goods described as stock lots constituted disposal goods and, therefore, could not be treated as new goods for the purpose of the import policy, and whether confiscation under Section 111(d) of the Customs Act was sustainable; (ii) whether the redemption fine imposed required reduction.

Issue (i): whether imported goods described as stock lots constituted disposal goods and, therefore, could not be treated as new goods for the purpose of the import policy, and whether confiscation under Section 111(d) of the Customs Act was sustainable.

Analysis: The goods were described in the invoice as stock lots. Stock lots were treated as outdated, left-over or unsold goods and, in trade parlance, as disposal goods. The import policy contemplated that goods covered by the licence had to be new goods and that disposal goods would not be treated as new goods. On that basis, the finding that the import offended the policy and attracted confiscation was upheld.

Conclusion: The confiscation and the finding of policy violation were sustained against the appellant.

Issue (ii): whether the redemption fine imposed required reduction.

Analysis: Taking note of the actual user of the goods, the quantum of fine was found to merit moderation.

Conclusion: The redemption fine was reduced from Rs. 1 lakh to Rs. 80,000.

Final Conclusion: The appeal succeeded only to the limited extent of reduction in redemption fine, while the substantive finding of confiscability was maintained.

Ratio Decidendi: Goods described as stock lots and treated as disposal goods under the import policy may be regarded as non-new goods, supporting confiscation for breach of the policy, while the fine may be moderated on facts.

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