Import classification acceptance bars fresh appellate plea; confiscation upheld for lack of licence, while penalty was reduced.

An importer who had accepted classification of a diesel generating set under Heading 85.02 could not raise a new classification plea for the first time in appeal. On that basis, confiscation for import without the required licence was sustained. The redemption fine was not treated as excessive in view of the substantial value of the goods. However, because the record showed the importer was an actual user and there was no misdeclaration of description, quantity or value, the penalty was reduced. The main challenge to confiscation and redemption fine therefore failed, but relief was granted to a limited extent on penalty.

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Issues: (i) whether the imported diesel generating set could be classified under Heading 85.02 and whether confiscation for want of a valid import licence was justified; (ii) whether the redemption fine and penalty required reduction.

Issue (i): whether the imported diesel generating set could be classified under Heading 85.02 and whether confiscation for want of a valid import licence was justified.

Analysis: The appellants had themselves classified the goods under sub-heading 8502.12 and had not challenged that classification before the lower authorities. A fresh plea for classification under a different heading could not be entertained at the appellate stage. Heading 85.02 covered electric generating sets, and the import policy required a valid licence for importing generating sets of the relevant type. In that background, confiscation of the goods could not be faulted.

Conclusion: The classification under Heading 85.02 was upheld and confiscation for want of a valid import licence was sustained, against the assessee.

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

Analysis: The value of the goods was substantial, so the redemption fine was not considered excessive. However, the adjudicating authority had found that the appellants were actual users and that there was no misdeclaration as to description, quantity or value. That finding justified interference only with the penalty, not with the redemption fine.

Conclusion: The redemption fine was maintained, while the penalty was reduced, partly in favour of the assessee.

Final Conclusion: The appeal failed on the main challenge to confiscation and redemption fine, but succeeded to a limited extent on the penalty.

Ratio Decidendi: Where the importer itself accepts the tariff classification before the lower authorities, a new classification plea cannot ordinarily be raised for the first time in appeal; confiscation for import without the required licence can be sustained, while penalty may be moderated if the record shows no misdeclaration.

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