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TMI Blog2008 (9) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-05-05. The consignment comprised 15 lots and was declared to be of 4A grade in the Bill of Entry. On test, two lots weighing 1216.67 kgs were found to be of grade 2A. After due process the original authority confiscated the two lots of 2A grade silk u/s 111 (m) of the Customs Act, 1962 (the Act). He ordered redemption of the above goods (Value Rs. 9,34,706/-) on payment of a fine of Rs. One lakh and imposed a penalty of Rs. 25,000/- on the appellants u/s 112(a) of the Act. The original authority also demanded Anti Dumping Duty (ADD) due of Rs. 2,66,658/- on the 1216.67 kgs of silk which was found to be of 2A grade. The appellants contested the fine and penalty on the ground that they had declared the description of the consignment importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e test results spoke volumes of CIQ certificates and the supplier. 3. I have studied the case records and submissions made by both sides. The importer had declared the description of the goods as appearing in the invoice covering the transaction. On test it was found that a small portion of the consignment was 2A grade whereby it attracted also ADD. In the facts of the case it cannot be held that the importer had deliberately misdeclared the description of the goods to avoid paying ADD found payable on a portion of the consignment. In the circumstances, the fine of Rs. One lakh ordered to redeem the offending goods which attract ADD of Rs. 2,66,658/- and penalty of Rs. 25,000/- are excessive. However, the fine and penalty have been impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdeclaration or any other lapse to the suppliers as the importer benefited by declaring the grade to be one which did not attract ADD. He also found that mens rea was not essential to impose fine and penalty. 3.2 I find that a penalty is called for only when there is a finding of dishonest or contumacious conduct by the assessee/importer. As there is no finding of mens rea, penalty of Rs. 25,000/- imposed under Section 112 is not justified though the statute provides for imposition of penalty. 3.3 As the offending goods are liable for confiscation, fine is justified in law. A fine for redemption of goods confiscated levies a monetary charge on the importer of the goods confiscated. Redemption fine also serves the same purpose as a pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 1987 (29) E.L.T. 904 wherein it has been held that in imposing penalty the requisite mens rea has to be established. It has also been observed in Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. (J159) (S.C.) = 1970 (1) SCR 753 - by this Court that :- The discretion to impose a penalty must be exercised judicially. A penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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