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TMI Blog1987 (2) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... .2.1983 was issued to the Appellant requiring them to show cause against confiscation of the goods under Section 111(d) and a levy of penalty under Section 12 of the Customs Act, 1962. This notice was adjudicated by the Collector who by his aforesaid order held that the import licences produced by the appellant did not cover the imports and directed confiscation of the coconut oil in question, subject to redemption on payment of a fine of Rs. 85,00,000/-, for import thereof in violation of the provisions of the Import Policy AM-80-81, 81-82, and 82-83 and Section 3(1) of the Imports and Exports (Control) Act, 1947 as amended and read with Section 11 of the Customs Act, 1962. No penalty was, however, imposed; (d) The instant appeal was the sequel. 2. Before us, Shri Cooper, Learned Senior Counsel for the Appellant submitted straightaway that the judgments of the Tribunal in the Appeals preferred by M/s. Jayanth Oil Mills M/s. Allena Impex, [Order No-656/84-A in Appeal No. CD (SB)898/83-A and Order No-503/85-A in Appeal No. CD (SB) 1410/83-A] govern the facts of this case both on the issue of liability for confiscation as well as the quantum of redemption fine and, accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases of M/s.Jayanth and M/s. Allena, the assessable value as determined in adjudication had been reduced, thus, correspondingly, increasing the margin of profit. In any view, it is the increased margin of profit that has to be taken into account. Again, if the assessable value determined in adjudication is after all to maintain in this case - unlike the Jayanth and Allena cases - the ratio in the said cases cannot apply; (d) The decision of the High Court of Delhi in the case of M/s.Jain Exports [C. Ws. Nos.4037 and 4038 of 1982 - M/s. Jain Exports (P) Ltd. v. Union of India] laying down the guidelines for the determination of the quantification of the fine in lieu of confiscation had not been brought to the notice of the Bench of the Tribunal that decided the Allena case although it was available by then. Were it cited, it would, perhaps, have made for a difference in the judgment in the case; (e) Pursuant to the direction of the High Court of Delhi in the aforesaid case of Jain Exports, the question of determination of the quantum of fine is now pending consideration before a Bench of three Members of this Tribunal specially constituted on a difference between the Members of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like, e.g. penalty under Section 12 of the Customs Act, 1962, - one in relation to the offending goods rather than in relation to the person in any way concerned with them - nevertheless, it is no less penal in nature or quasi-criminal in character, even though such proceedings are under a fiscal enactment .[AIR 1974 S.C. 859 - Collector of Customs v. Boormal - Para 22 of the report where confiscation is referred to as a penalty]. The test to adjudge if an action is penal or quasi-criminal is not in the mens rea prescribed. If that were the true test, a proceeding for the levy of penalty is also not penal or quasi-criminal, seeing that no mens rea is prescribed at all in Section 112(a) although penalty is, indisputably, penal. On the contrary, confiscation as an act of appropriating private property for State or Soverign use was known since the Roman Empire and usually been the result of the doing by the owner of some prohibited Act ... It is also the penalty for trying to carry contraband ...... In criminal law, confiscation of smuggled property .... is part of the penalty for .certain offences [P.270 of David M. Walker s The Oxford Companion"]. The seizure and appropriation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interfered with. Here, there is no such indication. I, therefore, do not propose to interfere . (iv) The aforesaid issue was neither raised nor considered in appeal to the Supreme Court in AIR 1971 S.C. 293. It cannot be, therefore, said that the aforesaid observation was affirmed by the Hon ble Supreme Court; (v) Even so, the aforesaid observation is inapplicable in the facts and circumstances of this case. This is not a case where the inferior tribunal imposed one type of penalty rather than another which is less onerous. The learned adjudicating officer did indeed afford an option for redemption. The question is, if the fixation of the fine in lieu of confiscation could be in his absolute discretion unfettered by any principles or well established lines - according to the rules of reason and justice and not according to private opinion : Rookes case (5. Rep 100a); according to law and not humour. It is to be not arbitrary, vague, fanciful but legal and regular [passage extracted in Para 26 of the report in AIR 1966 Cal. 237, from the judgment of Lord Halsbury in Sharp v. Wakefield (1891 AC 173]; (vi) To expatiate a little - duty to act and the discretion as to the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of this decision, no contention of an absolute unfettered discretion - not to be interfered with in appeal by a superior forum and not merely by way of a writ - can be advanced. We, however, observe that in the instant case no extenuating circumstances exist as has been held in Tribunal s decision in Jayanth Oil Mills case and about which there is no dispute. Illegal importation with a view to making profit has been found in a similar case of M/s.Jain Exports by Delhi High Court (C.W.4037 and 4038/82 - copy of the judgment made available). (e) In fact, in enacting Section 25 of the Customs Act, 1962, in the place of Section 183 of the Sea Customs Act, 1878, the legislative intent is explicitly expressed, to (i) Categorise the classes of cases into those where an option for redemption in discretionary and where it is mandatory, and (ii) Provide a ceiling for the fine in lieu of confiscation that may be imposed, so that while the fine should be deterrent, the option should not be illusory. The new section, thus clarifies the considerations relevant in a computation of the fine in lieu of confiscation; (f) (i) This being so, the first step in fixing the quantum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling seller for the property in the goods and is evidenced by the price paid in a plurality of transactions of sales and purchaser occurring on that day or nearest to it and in that place in identical goods or goods of like kind or quality, or failing that similar goods at that place or at a time and place nearest to it. In the words of Lord Blanesburgh in Vacuum Oil case the wholesale cash price for which goods of a like kind or quality are sold or capable of being sold is that price current for staple articles the amount of which, if not a subject of daily publication the press, is easily ascertainable in appropriate trade circles . This is nothing but market price . The market price of the goods confiscated is, in the circumstances, no more and no less than the market price for goods of the like kind or quality or similar goods ascertained on the basis of the prices paid in the course of multiple transactions of sale and purchase; (v) Market price when and where? Obviously at the time and place of importation. The offending act which rendered the goods liable to confiscation was the import at a particular time and place. It is, therefore, the market price on the date of imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, on a breach by the buyer in a contract of sale of certain shares in consequence of a fall in the market, the seller demanded payment of damages on the basis of the difference between the contract rate and the market rate ruling on the date of breach. Subsequently, however, the seller happened to sell them in a rising market at some profit. This resulted in mitigation of his loss to a certain extent. The question that was considered was whether the measure of damages for breach of contract was the difference between the contract price and the market price at the date of breach or the measure of actual loss sustained after re-sale in a rising market. If the seller was bound to reduce the damages by subsequent sale at better prices and if the purchaser is entitled to the benefit of such sale, it must be that he must bear the loss also, if any, in consequence of such sale. Their Lordships categorically held that the latter is impossible and the former proposition is equally unsound. If the seller holds on to the shares after the breach, the speculation as to the way the market will subsequently act, is the speculation of the seller and not of the buyer. The seller cannot, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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