ORDER
R. Jayaraman, Member (T)
1. This is an appeal directed against the order-in-original passed by the Additional Collector of Customs, bearing No. SG.Misc.5/81 A/S/10-69/83 L SIIB dated 30-7-1983, ordering confiscation of three containers of Diesel Engines Axle Assemblies and Crank Shafts valued at Rs. 1,94,956/- but allowing redemption, on payment of a fine of Rs. 7 lakhs. The appellants were also imposed a penalty of Rs. 70.000/-.
2. The undisputed factual position is that the goods were not covered by a valid import licence at the time of shipment as well as at the time of clearance of the goods. Hence Dr. Kantawala, the Id. Advocate, did not challenge the order of confiscation. All the same, he submitted that the fine is disproportionate to the value of the goods involved, as also in regard to the nature of the offence alleged and the condition of the goods. He particularly referred to the findings of the Addl. Collector wherein he has observed that the declared value of Rs. 4/- per kg. is the value of the metal scrap for import into India. Thus, he has considered the condition of the goods to be equivalent to scrap. Hence he could not have applied a margin of profit of 350% to 400% construing them to be new goods. Even for arriving at the marginal profit, no data is furnished by him. In view of this, the redemption fine is excessive, without any tangible basis. He also pleaded that the appellants have incurred a heavy loss in this import. Moreover, no penalty is called for in this case, because they had entered into a contract, only after getting the licence for second-hand items and also after getting the clarification from the Licensing Authority, but the licensing authority subsequently realised that it was a mistake and called for the licence, which they submitted. Thereafter the licence was amended deleting second-hand machinery. However, they could not stop this present import. Hence, no penalty is called for.
3. Shri Mondal, the Id. SDR on the other hand stated that the margin of profit, being more than 300%, the redemption fine is fixed at 7 lakhs. He also referred to the Addl. Collector’s finding to point out that they could have taken adequate steps to prevent the shipment of goods, since they did not have any firm commitment.
4. After hearing both the sides, since the order of confiscation is not challenged and the plea before us is only for reduction in the quantum of fine and for setting aside the order of penalty, we went into the issues relating only to this aspect. The Addl. Collector, in his findings has observed as below:
“The goods are declared to be ‘second-hand’ but the declared value is approximately Rs. 4/- per kg. I understand that this is the approximate GIF value of the metal scrap for import into India. This suggests the condition of the imported goods”.
From the aforesaid observations of the Addl. Collector, we are unable to appreciate as to how he could apply a margin of profit of 350% to 400%, when the condition of the goods could be construed to be only metal scrap. In view of this, the quantum of redemption fine calls for a substantial reduction. Accordingly, we reduce the redemption fine from Rs. 7 lakhs to Rs. 1,00,000/- (Rupees One lakh only) and grant consequential relief.
5. As regards the penalty, we find that the appellants had submitted the licence for amendment, as soon as the licensing authorities called for the same, on realising their mistake. It is also reported that they had sought for clarification from the Licensing Authority before entering into the contract. In view of the aforesaid circumstances, we deem it proper to extend leniency and remit the penalty. Appeal is disposed of in the above terms. Consequential relief to follow.