1993 (11) TMI 131 - AT - Central Excise

Summary

Issues:
1. Tribunal's dismissal of appeals and reference application.
2. Confiscation of goods and imposition of penalty under the Customs Act, 1962.

Issue 1: Tribunal's dismissal of appeals and reference application
The case involved the dismissal of appeals by the Tribunal in Order No. 225/A/Cal/88-225, dated 14-7-1988, and the subsequent dismissal of the Reference Application filed by the applicants. The appellants then approached the High Court of Calcutta under Section 130(1) of the Customs Act, 1962, seeking a question of law to be referred for decision. The question raised was whether the Tribunal's finding upholding charges against the appellant and imposing a redemption fine or penalty was perverse, based on excluding relevant material, considering irrelevant material, or using irrelevant or extraneous considerations.

The applicants, a manufacturer of plastic materials, had imported a plastic extruder machine from a West German firm. The machine was detained at Piraeus Port in Greece due to arbitrary actions, leading to legal proceedings for its release. The machine, initially shipped in 1982, was re-shipped in 1984 after rectification of damages. Customs authorities alleged misdeclaration as the screw diameter was found to be 150 mm instead of the claimed 152.4 mm. A show-cause notice was issued, leading to confiscation of the machine by the Collector of Customs, with a redemption fine and personal penalty imposed. The Tribunal and the High Court examined the case, ultimately setting aside the confiscation and penalties, citing the importer's bona fide conduct and extenuating circumstances.

Issue 2: Confiscation of goods and imposition of penalty under the Customs Act, 1962
The High Court emphasized principles from previous decisions, stating that confiscation and redemption fines should consider an importer's bona fide conduct. It highlighted that imposing penalties on those not guilty goes against natural justice. The Court referred to the Hindustan Steel Ltd. case, emphasizing that penalties must be in line with the law. The High Court held that confiscation of the goods was unwarranted and that the imposition of penalties was not justified. Consequently, the Court set aside the confiscation and penalties, ruling in favor of the appellants based on the facts and circumstances of the case. The judgment emphasized the need to ensure that the law is applied fairly and that absurd outcomes unintended by the law are avoided, ultimately granting the appellants consequential relief.