1. Import of machinery — illegal import of tapping machine under ITC policy — confiscation under Customs Act, 1962 — dispute over redemption fine quantum. (Para 2 )
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1996 Supreme(SC) 1671
SUPREME COURT OF INDIA
A.M Ahmadi, C.J.I., Sujata V.Manohar, J.
Collector Of Customs, Bombay
Versus
Super Fasteners, Marwana (Haryana)
Case No. : .
Date of Decision : 10/10/96
Important Points
The Tribunal possesses the discretion to reduce a redemption fine if it is found to be exorbitant and disproportionate to the value of the confiscated goods, and such discretionary findings are generally not subject to interference by appellate courts.
Subject
Customs Law - Confiscation and Redemption Fine
Act Referred
CUSTOMS ACT: S.111, S.125, S.129(b)
Headnote
(A) Customs Act, 1962 - Confiscation and Redemption Fine - Reduction of fine - Where the Tribunal finds a redemption fine to be exorbitant and disproportionate to the value of the confiscated goods, it has the discretion to reduce the same - Such a decision, based on the facts and circumstances of the case, does not warrant interference by the appellate court. (Para 2)
Facts of the case:
An importer imported a second-hand automatic multi-station nut-making machine. It was found that while the nut-making machine qualified for clearance under the Open General License, the accompanying tapping machine did not, rendering its import illegal. The tapping machine was confiscated under the Customs Act, 1962, and a redemption fine of Rs. 2 lakhs was imposed. The tribunal, while upholding the confiscation, reduced the redemption fine to Rs. 25,000, considering the estimated value of the tapping machine.
Findings of Court:
The court observed that the redemption fine of Rs. 2 lakhs was on the higher side given the total value of the tapping machine at the relevant date.
Issues: Whether the reduction of the redemption fine by the tribunal was justified and whether the appellate court should interfere with the tribunal's discretionary order.
Ratio Decidendi: The court held that if the tribunal, in its discretion, finds a redemption fine to be exorbitant and disproportionate and decides to reduce it, no exception can be taken to such a course of action in the given facts and circumstances.
Result: Appeal dismissed with no order as to costs.
Facts of the case:
An importer imported a second-hand automatic multi-station nut-making machine. It was found that while the nut-making machine qualified for clearance under the Open General License, the accompanying tapping machine did not, rendering its import illegal. The tapping machine was confiscated under the Customs Act, 1962, and a redemption fine of Rs. 2 lakhs was imposed. The tribunal, while upholding the confiscation, reduced the redemption fine to Rs. 25,000, considering the estimated value of the tapping machine.
Findings of Court:
The court observed that the redemption fine of Rs. 2 lakhs was on the higher side given the total value of the tapping machine at the relevant date.
Issues: Whether the reduction of the redemption fine by the tribunal was justified and whether the appellate court should interfere with the tribunal's discretionary order.
Ratio Decidendi: The court held that if the tribunal, in its discretion, finds a redemption fine to be exorbitant and disproportionate and decides to reduce it, no exception can be taken to such a course of action in the given facts and circumstances.
Result: Appeal dismissed with no order as to costs.
Legal Category Hierarchy
Table of Contents
2. Revenue challenged the tribunal's reduction of the redemption fine imposed on the illegally imported tapping machine. (Para 2 )
3. The original redemption fine was considered exorbitant and disproportionate relative to the estimated value of the confiscated tapping machine. (Para 2 )
4. Redemption fines should be proportionate to the value of the goods; tribunals have discretion to reduce fines found to be exorbitant. (Para 2 )
5. Appeal dismissed with no order as to costs. (Para 2 )
6. Can a tribunal reduce a redemption fine imposed for illegal imports?
Yes, a tribunal may exercise its discretion to reduce a redemption fine if it finds the amount to be exorbitant and disproportionate to the value of the confiscated goods. (Para 2 )
(1) TIME of payment of Rs. 300.00 is extended up to the end of this month. The counsel assures us that the payment will be made. On that assurance, we proceed with the hearing of the appeal.
(2) THE respondent imported a second-hand automatic multi-station nut- making machine under Invoice No. 1044 showing the price as 24,500 pounds. Later on, it was found that while the nut-making machine qualifies for clearance under OGL, the tapping machine did not so qualify and hence the import of the tapping machine was illegal. The appellant-Department, therefore, confiscated the tapping machine under the Customs Act, 1962 read with the relevant provisions of the ITC policy. In addition thereto, a redemption fine of Rs. 2 lakhs came to be imposed. The tribunal, while conceding that the import of the tapping machine was unauthorised and the confiscation of the machine was valid, thought that the redemption fine was very much on the higher side and reduced it to Rs. 25,000.00 only, having regard to the value of the tapping machine which was estimated to be 1200 pounds. It is on this limited question that this appeal has been filed and the Revenue desires that we interfere with the tribunals order reducing the redemption fine. We are not inclined to do so. We think that the redemption fine of Rs. 2 lakhs was on the higher side having regard to the total value of the tapping machine at the relevant date. If the tribunal in its discretion thought that the fine was exorbitant and disproportionate and decided to reduce it, we do not think that, in the facts and circumstances of the case, any exception can be taken to that course of action. We, therefore, dismiss this appeal with no order as to costs.
