Penalty for clearing goods against a debit PLA balance was reduced where no mala fide intention was found.

Clearing goods against a debit balance in PLA was treated as a contravention attracting penalty, but the absence of any finding of mala fide intention justified mitigation of the quantum. The appellate authority had already reduced the penalty from Rs. 20 lakhs to Rs. 10 lakhs, and the Tribunal found that the amount was still excessive in light of the non-deliberate nature of the breach. The penalty was therefore further reduced to Rs. 2.5 lakhs, while the remainder of the order was upheld.

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Issues: Whether the penalty imposed for clearing goods against a debit balance in PLA required reduction in the absence of any finding of mala fide intention.

Analysis: The appellate authority had already found no mala fide intention and reduced the penalty from Rs. 20 lakhs to Rs. 10 lakhs. The Tribunal held that although the appellants had committed a contravention requiring penal consequences, the quantum fixed was excessive in the circumstances, particularly when the violation was not shown to be deliberate.

Conclusion: The penalty was further reduced to Rs. 2.5 lakhs, and the order was otherwise upheld.

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