1989 (10) TMI 170 - AT - Customs

Summary

Issues:
- Confiscation of impugned goods under Section 111(d) of the Customs Act, 1962
- Imposition of Redemption fine and personal penalty under Section 112 of the Act

Confiscation of Impugned Goods:
The appellants sought to set aside the order-in-original passed by the Collector of Customs, New Delhi, confiscating the impugned goods, Sufeed Sarah (Poppy Seeds - Khaskhas), under Section 111(d) of the Customs Act, 1962. The appellants claimed clearance of the goods under import under O.G.L. Appendix 6(1) of AM 85-88 Policy, while the Customs covered the goods under Entry No. 121 of Appendix 2 Part B of AM 85-88 Policy, requiring a specific license/CCP for clearance. The Collector relied on a letter clarifying that the import of Khaskhas is not allowed under the mentioned policy. The appellants argued they were actual users with a Drug license for Ayurvedic medicines, had obtained a no objection from the Ministry of Health, and had imported the same product previously without issue. However, the Collector rejected their plea, stating the goods fell within the prohibited category and were liable for confiscation and penalties.

Imposition of Redemption Fine and Personal Penalty:
The Collector imposed a redemption fine of Rs. 2.5 lakhs and a personal penalty of Rs. 10,000 under Section 112 of the Act. The appellants contended that the goods were not illicitly cultivated as they were exported through a government unit and were intended for use in manufacturing Ayurvedic drugs. They argued that the goods were not consumer items but crude drugs, eligible for clearance under O.G.L. Appendix 6. The Departmental Representative maintained that the goods required an import license as they were consumer goods of agricultural origin. The Tribunal considered whether the goods required an import license under the relevant policy and the justification for the imposed penalties.

Decision:
After careful consideration, the Tribunal held that the imported goods were consumer goods and required an import license, which the appellants did not possess. The Tribunal rejected the appellants' contention that the goods were crude drugs eligible for clearance under O.G.L. Appendix 6. Regarding the penalties imposed, the Tribunal noted discrepancies in the penalties imposed on similar cases and reduced the redemption fine to Rs. 15,000 and set aside the personal penalty of Rs. 10,000. The Tribunal emphasized the importance of uniformity in imposing fines and penalties to avoid discrimination and ordered the Revenue to refund any excess amount collected. The appeal was partly allowed to the extent of the revised penalties.