1. In this appeal the challenge has been made to the Commissioner's impugned Order-in-Original No. S8/205/98-SIIB dated 4.6.1998. The Commissioner of Customs had ordered the confiscation of the goods under Section 111(d) & (m) of the Customs Act, but given an option to the appellants for redemption of the same on payment of fine of Rs. 1,50,000 and also further imposed penalty of Rs. 50,000 under Section 112(d) of the Customs Act.
2. The facts are not much in dispute. The appellants filed Bill of Entry No. 13518 dated 12.3.98, through their CHA M/s. Reliance Forwarders, for the clearance of goods declared as Mechanical Pencil parts. But on verification, some of the goods were found to be complete parts of Child and Art pencils in CKD condition, which otherwise, were declared as Mechanical Pencil parts. On account of this mis-description, the proceedings were initiated against the appellants.
The Commissioner of Customs who adjudicated the matter, had opined that the imported goods were in CKD condition and as such license was required for importing the same. Since no license was taken by the appellants, the Commissioner had ordered confiscation of the goods.
However, he has given option to the appellants to get the goods redeem on payment of redemption fine of Rs. 1,50,000 but also further imposed a penalty of Rs. 50,000 on them.
3. Ld. Counsel without contesting the findings of the Commissioner about the CKD condition of the imported goods in question, has contended that no redemption fine or the penalty could be imposed as the appellants acted in a bona fide manner and there was no mens rea or any malafide intention on their part, to evade duty. The appellants acted under bona fide belief that no licence was required as they were importing only the parts and not the goods in CKD condition. Ld.
Counsel is support of his contention, has placed reliance on the ratio of law laid down in the Tribunal's judgment rendered in the case of Pragati Press v. Collector of Customs, New Delhi, 1994 (72) ELT 620 (T) and also the judgment rendered by the Hon'ble High Court at Calcutta, in the case of Indian Explosives Ltd. v. Collector of Customs, 1992 (60) ELT 111 (Cal.). On the other hand, Ld. JDR has reiterated the correctness of the impugned order of the Commissioner.
5. No doubt the interpretation of Rule 2(a) of the General Rules of Interpretation, of the Customs Tariff is involved in order to arrive at the conclusion as to whether the imported goods in question were in CKD condition or not, in the light of the Larger Bench decision in the case of Sony India Ltd. v. CC, ICD, New Delhi, 2002 (82) ECC 436 (Tri-LB).
But, since the counsel has fairly stated at the bar that this question need not be gone into as the appellants only pray for reduction/setting aside of the redemption fine and the penalty amounts, therefore, it has to be accepted for the disposal of the appeal that the goods imported were in CKD condition. The only question, which requires our consideration, is, whether the appellants could be burdened with the liability to pay the redemption fine and the penalty. The disputed goods had been confiscated, as the license was required to import the same. But, the plea of the appellants is that they had acted in a bona fide manneras part of the goods and not all, were found to be in CKD condition, for the import of which license was required. They had already paid the entire duty. We do not find any material on the record to doubt the bona fide of the appellants, as to hold that mis-description of goods was deliberately made by them to evade the payment of appropriate duty. The duty on the part as well as on the CKD condition goods, was the same at the relevant time. The ratio of the law laid down in the above referred cases that where the assessee had acted on a bona fide manner, no redemption fine or penalty or is to be imposed on them on the import of the goods, very aptly applies to the case of the appellants. Therefore, keeping in view of the above referred facts and circumstances, we set aside the penalty imposed on the appellants under Section 112(d) of the Customs Act and reduce the redemption fine to Rs. 25,000. Except for this modification, the impugned order of the Commissioner Customs is maintained. The appeal of the appellants stands disposed of accordingly, with consequential relief if any, as per law permissible to them.