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1. Contest on the quantum of fine and legality of levy of penalty in importation case. Analysis: The judgment by Appellate Tribunal CEGAT, Madras, involved appeals not contested on merits but focused on the quantum of fine and the legality of penalty imposition in importation cases. The appellants were accused of importing Cloves from Ceylon in violation of import regulations. The proceedings were initiated by the Additional Collector of Customs, Madurai, leading to impugned orders against the appellants. The value and quantity of the imported goods were consistent across the appeals. The appellants argued that they had placed orders when the goods were permissible for import, and the change in import policy occurred after the contracts were concluded. They contended that no penalty should be imposed based on similar precedents where no penal liability was attached in comparable situations. The Senior D.R. countered that while penalty might not be warranted due to the goods being permissible for import at the time of contracting, the quantum of fine should not be reduced. He cited a Full Bench ruling emphasizing that the fine should align with the profit margin to deter illegal gains from imports. The Tribunal noted that the goods were initially permissible for import under the Open General License (OGL) when the contracts were signed, and the subsequent canalization did not indicate mala fides on the part of the appellants. Therefore, the Tribunal deemed penalty imposition unwarranted, supported by previous rulings where no penalty was imposed in similar circumstances. Regarding the quantum of fine, the Tribunal highlighted the discretionary nature of imposing fines, emphasizing the need to consider profit margins and not adhere to a rigid formula. While variations in fine percentages were noted in different cases, the Tribunal upheld the fines imposed, stating that minor variations do not warrant modification based on a rigid formula. Ultimately, the penalty was set aside, and fines were confirmed for each appellant, with the appeals dismissed except for the mentioned modifications. The judgment underscored the importance of discretion in determining fines and the need to consider individual case circumstances rather than adhering strictly to set percentages.
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