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Department's appeal against impugned order of Addl. Collector of Customs regarding unauthorized import of goods and imposition of fine and penalty. Analysis: The Department filed three appeals against the Addl. Collector of Customs' order concerning the unauthorized import of goods by the respondents. The goods in question were 269 bales of Emona White Woodfree paper imported in June 1988. The Department alleged that the goods could only be imported by actual users for specific purposes, which the respondents, Jugraj and Devichand, were not. The impugned order imposed a fine of Rs. 10,000 with an option for redemption of goods by Indian Bank, the third respondent, and penalties of Rs. 1,000 each on the other two respondents under the Customs Act, 1962. The Department contended that Jugraj and Devichand imported the goods without the required machinery by providing false information and misrepresenting themselves as actual users to Indian Bank. The bank, as the L.C. opener, later claimed to be the importer and redeemed the goods. The Department argued that Indian Bank should also be penalized for not verifying the authenticity of the importers. The Department also sought an increase in the fine, considering the value of the imported goods and the profit margin. The penalty imposed on Jugraj and Devichand was deemed low by the Department, given their misrepresentation and lack of actual use of the goods. However, the respondents disowned the goods and focused on the penalty. Their counsel argued that since they disowned the goods due to inability to procure necessary machinery locally, the penalty was justified. The Tribunal emphasized that unauthorized imports are subject to confiscation, with the option for redemption by paying a fine based on the profit margin. The Tribunal noted the absence of discussion on profit margin in the impugned order and questioned Indian Bank's role in redeeming the goods without proper safeguards. Due to insufficient reasoning and lack of consideration for profit margin, the Tribunal set aside the impugned order and remanded the matter for reconsideration. Consequently, the penalties on Jugraj and Devichand were also set aside, and their appeals were remanded for reassessment of liability and penalty quantum. In conclusion, the Tribunal allowed the appeals by remanding the case to the adjudicating authority for a thorough review of the fine quantum, potential penalties on Indian Bank, and the liability of the respondents, ensuring proper consideration of all relevant factors and legal provisions.
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