1988 (3) TMI 269 - AT - Customs

Summary

Issues:
1. Imposition of penalty and quantum of fine on the appellants for importing Cloves contravening the law.
2. Whether the appellants had mala fide intention to evade the Import Control Order, 1955.
3. Comparison of quantum of fines imposed by different authorities and the Tribunal in similar cases.
4. Exercise of discretion by the Tribunal in determining the quantum of fine.

Detailed Analysis:
1. The judgment by the Appellate Tribunal CEGAT, Madras dealt with the issue of penalty and quantum of fine imposed on the appellants for importing Cloves in contravention of the law. The appeals were argued regarding the fine quantum and legality of penalty imposition. The Tribunal consolidated the appeals due to the similarity in issues and disposed of them through a common order.

2. The appellants imported Cloves from Cylon in November 1986, leading to proceedings initiated by the Additional Collector of Customs, Madurai. The contention was that the imports were in violation as Cloves were canalized for import at that time. The appellants argued that they had placed orders when the goods were permissible for import under the relevant policy, and the change to canalized status occurred after the contracts were concluded, indicating no mala fide intent to evade the law.

3. The value and quantity of the imported goods were consistent across the appeals. The appellants argued that penalties were not warranted based on past orders where no penal liability was imposed in similar circumstances. The Senior D.R. contended that fines should align with profit margins to prevent monetary gains from illegal imports, citing precedents and rulings.

4. The Tribunal, after considering the submissions, found no mala fides on the part of the appellants due to the timing of the contract concerning the change in import policy. It held that imposition of penalties was unwarranted based on past rulings and lack of intent to evade the law. The Tribunal also discussed the exercise of discretion in determining the quantum of fine, emphasizing that it should consider profit margins and relevant factors, with nominal variations being acceptable based on the case's circumstances. The Tribunal upheld the fines imposed, dismissing the appeals except for setting aside the penalties.